May 14, 2020

Taking the Leap: The Freelance Strategy Consulting Playbook

Taking the Leap: The Freelance Strategy Consulting Playbook

In 2012, I was first exposed to the world of freelance strategy  consultants while working for a-connect. I encountered a number of  people who had opted out of traditional paths and for many different  reasons (autonomy, flexibility, excitement) decided to work on their  own.

At the time, I had a hunch this was a path I wanted to explore. I’ve  always been someone with shifting interests and love pushing myself into  new domains. By the nature of our current job market, we cling to  traditional beliefs around job loyalty, time in role and grey-haired  experience. I wanted to optimize for skills, learning and challenge. To  many, doing the same thing over and over was “putting in your time,” but  to me was the goal to avoid.

After having a couple more jobs which I continued to learn, develop  confidence in my skills and gain more clarity over the type of work I  wanted to do, I decided it was time to make the leap. Over the past  year, I’ve learned a number of things and hope to offer a sort of  playbook to help others make the same leap:

Part 1: Mentally Shift to a Freelance Mindset

1. Test your Commitment: In my career, I’ve often  tested out next steps in my career by telling people what that next step  might be and then judging both my reaction and theirs. For example,  early in my career, I would tell people “I am trying to break into  consulting.” As I said it, it felt like something I really wanted to do  and others acted with support. Test out “I’m making the leap to become a  freelance consultant.” If it doesn’t feel right, you may want to  re-think your move. You also want to challenge yourself to become  comfortable with uncertainty.

The question of “what if I can’t find a project” is inevitable and  you will likely face this over and over as a consultant. If that  lingering fear is going to overwhelm your ability to take action, this  may not be the path for you.

2. Start building momentum: For me this meant  reaching out to a number of friends and other connections that were  currently freelance consultants. I had a number of great conversations  and I asked them accounting, business and life questions. Some of the  best advice I got is included here. You also want to start thinking  about your network and identifying the supporters you have through  family, colleagues and past jobs. People tend to dramatically  underestimate the number of people that are rooting for them, so its  good to start a list.

3. Learn about the freelance talent marketplace: I wrote a more detailed piece on the talent marketplaces,  but you should start checking out and signing up for accounts on the  different platforms. You can join platforms like Catalant, TalMix, PwC,  and UpWork before you become a full-time freelancer. Others like  a-connect, Umbrex, BTG, and Genioo require you to be on your own before  joining. You may also want to see if you can win a small project on one  of those platforms before you take the leap just to build additional  momentum.

4. Assess Your “Future Of Work” Mindset: Jumping  into the gig economy is not a straightforward transition.  During this  transition, many people develop a completely different mindset and  perspective on work, income, money and how they live life.  I’ve  developed a future of work mindset assessment that looks at some of the  different things you may not have expected (such as unplanned breaks,  new definitions of success, how you think about creativity) that will  help you get a baseline on where you are and the areas you need to  reflect and be aware of during your transition.

5. Tame your fears: One of the biggest challenges in  becoming a freelancer is the lack of structure relative to being  employed full-time. When you are employed full-time, much more of your  schedule is fixed and there is almost absolute certainty around income  and costs.  One exercise I have all people go through who are thinking  about taking the leap is the fear setting exercise, which forces you to write down some of your worst fears in relation to finances and other fears of failure.

6. What if you run out of money?: Part of the fear  setting exercise is to write down an income you would be comfortable  with.  For many people, this is the first time they think about income  as something you need to continually earn instead of something that is  fixed and comes in at a regular pace.

You can use the Boundless freelance target income calculator to determine what kind of income you need to make to support your lifestyle.  When I went through this exercise, I  became more aware of the link between my spending and the amount of  income I needed to make in a way that enabled me to cut spending on  things I didn’t value.

7. Set a timeline: For me, I set out as a freelancer  to make this a minimum one-year commitment. I made a number of changes  in my finances, including lowering my rent and changing some of my  spending habits. Mentally I committed to a full-year no matter if I  actually landed any work or not. I looked at the year as a real-world  grad school. If I didn’t have things to work on, I would focus on  building new skills and pushing myself personally. My initial due  diligence convinced me I would land some work, but in my head, my “worst  case scenario” was a year off of work to learn, reflect and grow.

In my experience three months is too short, six months is the bare  minimum and at least 12 months is about right in order to align your  behavior and committment with making it work.

Phase 2: Setup Your Business Platform

1. Come up with a name: I did a few things to come  up with a name —crowd-sourced ideas from friends, forced myself into a  two-hour brainstorming session while flying and tested some names with  trusted friends who I knew would challenge me if they weren’t right.  There are a few options with names. I wanted something that signaled a  firm and also allowed me some flexibility in the type of work I did (I  landed on Vivo Strategies). Others feature their names (Smith  Consulting, Miller Advisors etc…) and some are more specific (Lean  Transformation Advisors).

Update: As you can see I changed the name after six months to Boundless.  I still have my Vivo Strategies LLC name that I use as a  freelance consulting firm name, but I also set up a DBA (doing business  as) form in Massachusetts enabling me to do business under this name as  well.

2. Get a Business Credit Card: My accountant’s  advice was to either use an existing personal card solely for business  expenses or to apply for a new one. I decided to use a no-fee chase  credit card I already had and only use it for business expenses. This is  linked directly to my Spark Business Bank (see step 4), but is good to  set up before paying fees to incorporate your company so that you can  expense it easily.

Update: I am now using the Chase Ink Bold business card,  which you can get if you have an LLC.  This is a great card for  international travel (no foreign exchange fees) and 3x rewards on  travel, not to mention the 80,000 points for spending $5,000 in the  first three months.  All with only a $95 annual fee.  Grab the card here (not an affiliate link).

3. Incorporate Your Company: I used LinkedIn Profinder (or  UpWork is great) to connect with local lawyers and accountants to get  initial advice on business structure and finances. The consensus was  that an LLC is an ideal setup for working as a freelance consultant. You  can also set-up as a corporation, which is better if you plan to grow  or offer other services but is more time consuming annually as you have  to file shareholder minutes. You can use services like legalzoom.com to  incorporate, but beware as some states have extra requirements (such as  in New York, there is a publishing requirement that LegalZoom will not  cover). You typically need to file an Articles of Incorporation and an  Operating Agreement.

4. Get Your EIN & Apply for a Business Banking Account: You can quickly get an EIN for your business through this government site. Once you have this, you can set up a corporate bank account. I looked extensively and Capital One’s Spark Digital Business Banking was clearly the best option for avoiding most fees. It offers free  banking as long as you are comfortable banking digitally. I could not  find another comparable option and be happy to use them as I have been a  satisfied Capital One 360 customer for years.

Update: I’ve also discovered Azlo which is a great business bank as well.  Referral code here (I’m pretty sure I don’t get any benefits for this).

5. Understand the Tax Situation: As a freelancer,  the tax situation is much different than working full time. I highly  recommend finding a good accountant to guide you. For starters, you are  responsible for both sides of the payroll tax. In a full-time job, you  only have to pay 7.65%, but as a freelancer, you are responsible for the  full 15.3% (however, you can deduct the additional 7.65% from your  income). This is in addition to federal and state income taxes. You also  pay your taxes differently, on a quarterly basis (more here and here) directly to the IRS. I am using Quickbooks self-employed bundle. (discount/affiliate link or non-affiliate link)

6. Setup a website and an e-mail: Setting up a  website is optional, but an e-mail is definitely required. I bought my  domain on godaddy.com and then set up a free e-mail account with Zoho and linked it through my Gmail. I set up a website using Wix pre-paying an annual plan.

Update: I’ve since moved to this WordPress site as I got a  bit frustrated by the limited flexibility of Wix and how they try to  monetize add-on features.  WordPress has better compatibility with  external services like Stripe, forms and mailchimp that places like  Squarespace or Wix.

7. Get Healthcare: Ah yes! The only country where healthcare is still attached to employment. I suggest going through StrideHealth as a way to make sense of all the healthcare options in your area on  the exchange, but the options and usability of the exchanges vary by  state. I’ve had good luck with Oscar Health so far.

Phase 3: Take the Leap

1. Do it!: It’s hard to set up an independent gig  before you leave your full-time job so there is definitely uncertainty  in taking the leap. If possible, you can consider trying to turn your  current employer into your first client, but if not possible, you have  to expect to not have a clear path forward. I celebrated my leap by  spending four weeks in Europe. The trip had two benefits — it helped me  re-energize after a previously stressful job and also start to reflect  deeper on what some of my goals are in my freelance work and start  identifying the type of people I wanted to work with.

2. Define Your Focus: Part of why I wanted to take  the leap to become an independent consultant was because I wanted to  work on a variety of things and I expected those to shift over time.  Thus, at the beginning of this journey, I was not 100% sure of my focus.  This flies in the face of a lot of advice I have seen, but the  uncertainty and excitement of freelancing is why I decided to take this  leap in the first place. The trick is to have some external confidence  about the type of work you want to do while still balancing an internal  uncertainty and openness.

3. Test, refine and continuously adapt your call to action:  Building on the last point, you will need to communicate what you are  looking for to generate opportunities. I encourage people in all aspects  of their career to develop a call to action to help signal what they  are trying to do. For me, I have been telling people “I want to make the  working world a better place” for years. I’m currently experimenting  with the line “I work with mission-driven leaders to build great  organizations” but am continually assessing how people respond to it and  tweaking it to make it more specific. The trick is to have something  that is broad enough to elicit a lot of responses, but specific enough  to communicate that you are really excited about one thing.

4. Share Broadly: Remember that list of supporters  you put together? You now want to send them an update and let them know  what you are up to! Sending individual e-mails is best, but if you want  to send a mass update that’s fine too! At the beginning of my journey, I  sent about 25–30 e-mails to strong connections telling them what I was  up to and thanking them for their support over the years. Don’t paralyze  action here by thinking people are not interested in your journey.  People love stories. Just think about when people would write exit  e-mails in consulting, you always wanted to see where people were  headed, right?

Phase 4: Embrace the Freelance Life

As you make begin this new chapter in your career, you will  undoubtedly make many mistakes and have to shift your focus, your  efforts and re-assess how you plan to live your life. Some of the best  advice I’ve received or put into place in my own life is below:

Follow Your Excitement and Look For Opportunities Everywhere: One of the unexpected benefits I’ve xperienced from taking the leap to  become a freelancer is that work is no longer a zero-sum game. Instead  of being locked-in to full-time employment, there are many more models  including working remotely, working part-time and one-time teaching,  speaking or facilitating gigs. I see some of my free time as an  opportunity to work on fun projects, learn new skills, focus on  volunteering or giving back through mentoring or as a way to reach out  to others and offer my support. When I see someone doing something that  inspires me, I now think about how I can reach out to them and  potentially start a dialogue towards working together.

Continuously Engage With Your Network & Add Value:  I’ve always enjoyed connecting with different people and learning from  them. I’ve also always had fun helping others out with their careers, so  reaching out to my network is not something that was unnatural to me.  Different things I’ve done over the years are to share interesting  articles, ask people to connect over coffee, reach out to friends who  are doing interesting things with genuine curiosity or reach out to old  colleagues to ask how their life is.

Find Niche Consulting Firms: There are hundreds of  small consulting firms who can not commit to hiring large numbers of  people every year like the big consulting firms. Working with  freelancers is often a win-win situation for them to work with  highly-skilled consultants without having to risk committing long-term  to a salaried position. I reached out to a number of small firms doing  work in the space I am excited about and try to stay on their radar  about potential collaboration opportunities.

Write: Writing is something that every freelancer should be doing.It’sts a  great way to put your perspectives and passions into the world and for  people to start seeing you as a go-to person within a specific space. I  enjoy writing because I love the process of getting better at something  (always room for improvement in writing!) and it helps me make sense of  the world. I do a lot of writing on Medium and Quora and tend to post  more deeply thought out content on LinkedIn. I’ve made some great  connections over the years from people that shared my interests and  reached out after I wrote an article.

Hack: To get started, try the Most Dangerous Writing App, where your writing disappears if you stop typing!

Get Ready to Explain Yourself: Since you are going  off the traditional path, expect many people to ask questions about what  you are doing. I’ve noticed that even if you explain the freelance  world to them, a lot of people still look at setting up your own company  through a startup lens. People ask me how many people I plan to hire,  how big I plan to be and what my business plan is. For me, the answers  to these have more to do with the type of life I am designing rather  than becoming richer, bigger or more powerful. Given that this is a bit  different, I’ve found that some people get a bit defensive, so I try to  make it clear that this is what works for me!

Be Ready to Say Yes!: You need to be ready to move quick and  jump on opportunities. In the freelance world, things can move a lot  faster than getting a traditional job. One of my first gigs got started  about 10 days after an initial conversation. You often may receive  e-mails from staffing organizations seeing if you are available within  the same week. You need to create enough flexibility in your life such  that when the opportunities can arise, you are ready to say yes!

Say No: This was one piece of advice I got from  several freelancers — think about the projects you do not want to do.  From my first month of trying to find work, I definitely felt myself  feeling a bit insecure about not finding work yet, but remained  committed to not accepting work just for the sake of it. In our culture,  it is hard to avoid the draw to remain “productive” and work for the  sake of work, but I think there is something powerful in saying no to  something okay to create the space to say yes to something awesome.