How To Transition From Day Job To Full-Time Freelancing

If this is the year you finally say goodbye to your 9 to 5, you’re probably feeling a big mix of emotions. 

On the one hand, you’re so excited thinking about being your own boss, working from home in your leggings, and taking yoga classes in the middle of the day. The freedom! But on the other… you might be kinda freaking out about how you’re going to pull this off. 

You’re earning cash on the side, working with clients regularly and thinking about taking the leap to full-time, but you’re not quite there yet. 

If you’re not quite making your target income yet, it’s pretty hard to make the leap. You want to be sure you can cover all of your expenses adequately before you give the middle finger to the corporate world. 

But you might also feel like you can’t grow your freelance business if you don’t quit, because you don’t have enough time to take on more freelance projects.

You might be spending hours at your day job just dreaming about all the things you wish you were doing for your own business, only to come home at 6pm completely exhausted and suddenly fresh out of ideas and motivation. 

Whew! I get it. It’s a tricky – and overwhelming – space to be in. But there are several options to help ease this transition and make your leap to self-employment a successful one.

First up – finances. 

Before you make a decision to leave your job and transition to full-time freelancing, you’ve got to know your numbers. And let me start by saying, this is totally different for everyone! Your numbers depend on your situation and there’s no right or wrong answer here. You’ve got to decide on your own numbers based on what feels right to you. Here’s what to consider:

Savings

How much cushion do you want to have before you quit? For some people, covering 3 months of expenses feels good, for others it’s 6 or 12 months. How much you want in your bank account is going to depend on your situation, but having a little buffer is always a good idea.

The sooner you can start building up your savings account to quit, the better! Fun tip – give your savings account a name in your online banking like “F U money” and set up an automatic transfer of whatever you can afford every month.

Expenses

Self-employed folks have higher expenses, so you have to keep that in mind when you’re making the leap. All of your operating expenses – like internet, software, electricity, copious amounts of coffee, etc – are on you now. Luckily some of this can be written off in your taxes, but you still have to pay for it up front. 

There’s also the matter of paying your taxes. Do your research on what kind of taxes you can expect to pay in your region. In North America, you can spend anywhere from 30-50% of your income on taxes.

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Another thing to keep in mind is your office set up. Will you need to rent space, buy a new MacBook, cover software subscriptions that your employer is currently covering? If you’ve got any big set up expenses, make sure you have that money set aside before you make your leap.

And one last thing – retirement. This is going to be on you once you’re the boss, so factor this in as an expense now to make sure you don’t leave it until your 60’s.

Minimum Viable Income

Every entrepreneur has an income goal. More often than not it’s to reach 6-figures. But you don’t necessarily need to have a big number in order to leave your job in the beginning. 

This is where Minimum Viable Income comes in. Basically, your MVI is the minimum amount you need to make each month to cover your expenses. If you made your MVI and no more, you wouldn’t be homeless or hungry or behind on your debt payments. 

To figure out your MVI, do a good ol’ fashion budget. Calculate the costs of all of your expenses in a month and voila! (I would recommend adding a little cushion for safety here though.)

Your MVI is not meant to give you the glamorous and exciting lifestyle of a rich entrepreneur. It’s the minimum. Once you hit this number – and know you can do it again repeatedly – you can comfortably leave your job, knowing that your income is likely to grow once you can dedicate full time hours to your job.

Again, this number varies from person to person. Your minimum viable income might include a lot more spending money and savings cushion than your neighbour. That’s ok. Do you. 

Cool? Cool. 

Once you have your numbers figured out, take a look at the options below to figure out if one might be right for you.

Transition Options

#1 Go To Part-time

If you’re earning a bit from freelancing, but still need some of that sweet sweet paycheque, see if you can go part-time. Negotiate with your boss to reduce your hours to 2-4 days a week, or only working mornings. 

This is exactly how I made my transition to full time self-employment. I went down to 3 days/week so I would have more time to do client work and grow my business. I was making enough from freelancing that it would make up for the cut in my hours. And once I added more client work on those 2 days (plus nights and weekends), I was able to grow my freelancing business enough to comfortably leave my job in about 4 months.

Going part-time in your day job is a great way to give yourself more hours to focus on growing your business and serving your clients.

#2 Become A Consultant For Your Company

Instead of quitting and burning the bridge with your day job forever, why not try to make them a client?

Becoming a consultant or freelancer for your current company can be a win-win. This setup allows you to set your schedule, and can give you more freedom and control to build your business. It’s a win for your employer because you aren’t outright quitting and you already know the job, so they don’t have to train another employee to take your place.

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#3 Get A Remote Job 

A remote job isn’t exactly freelancing, but it could give you way more flexibility in terms of hours and where you work from. You can get a sense of self-employment (hello working from home in my PJs!) while continuing to earn a full-time income working with a team.

If you currently have a big commute, getting a remote job could save you hours each day. Cutting out the commute time means more time in the morning and evening to focus on your side hustle. 

You might even try negotiating going remote with your current job. Even working from home a couple times a week can give you back a few hours which can go a long way.

#4 Get A Less Intense Job 

If your current full time job is pretty intense and leaves you feeling exhausted at the end of the day, it might be difficult to dedicate any time and energy to growing your freelance business. If this is the case, consider looking for something a little less demanding. 

Erica, a stylist, photographer and personal friend of mine, took this route to becoming self employed. She was working at a fashion company, putting in long and intense hours. She felt generally exhausted and creatively drained outside of work, so building her own business was next to impossible. She made the hard decision to leave her job in fashion and find something less demanding. The change gave her a new burst of creativity, and she had more energy to work on her side hustle in the evenings and on weekends – all while still getting a paycheque.

Author Elizabeth Gilbert talks about the difference between a job and a career. Basically, a job makes you money, while a career is a job you’re passionate about and you love. If you have a ‘career’ that you hate and it takes up all of your time and energy, consider getting a regular, less demanding job so you can work on your own stuff on the side.

If you aren’t quite ready to take the leap into full-time freelancing, you can still find a way to make your transition. There are plenty of options to give you more time, energy and flexibility so you can focus on growing your business and serving your clients.

How are you planning to transition to full-time freelancing? Or if you already made the leap, what tips do you have for others looking to do the same?

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