2016-12-30 00:00:00 Self Employed English Learn how to say goodbye to your cubicle and become your own boss with the following tips for transitioning from full-time to freelance. https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/03/contractor-poses-a-question-about-his-role.jpg https://quickbooks.intuit.com/ca/resources/self-employed/making-the-transition-from-full-time-employee-to-full-time-contractor/ Making the Transition From Full-Time Employee to Full-Time Contractor

Making the Transition From Full-Time Employee to Full-Time Contractor

3 min read

Switching from being a full-time employee to a freelancer can be extremely liberating, but you may also need a little bit of confidence in making the leap. Though working for yourself gives you control over the work that you do, it also requires adjustments to your work habits and lifestyle. Knowing what to expect can help to alleviate challenges during your career transition.

Prepare Details in Advance

Taking care of the details of the transition ahead of time lets you jump in on day one as a work-at-home freelancer. Make sure your computer hardware and software work properly and can support the programs you need, and verify that your Wi-Fi reception is adequate for your needs. Stock up on office supplies or materials you may need to do your job; update your website, or build one if you currently don’t have an online portfolio. That online presence helps you reach more people to help you build your clientele quickly. It’s also a good idea to consult with any professionals you need, such as an attorney to draw up contracts or an accountant to help with bookkeeping. By consulting with professionals before you start your business full time, you know the key pieces are in place from the start.

Find Full-Time Contractor Work

One of the most important tasks to tackle before quitting your full-time job is finding clients. Landing clients can be challenging, and it can take some time to build up enough work to maintain a steady income. If you start to grow your client list before you quit your full-time job, you have a head start on your business income, which can make it easier to transition away from regular paycheques. Determine the type of projects that fall under your expertise. For example, if you’re a writer, you may write blog posts and articles but might not be as experienced with product descriptions. Once you’ve established these parameters, start working side gigs in the evenings and on weekends to grow your business. Avoid giving notice at your full-time job until you have enough freelance work to sustain your financial needs.

Financial Changes

The desire for flexibility and control over the type and amount of work you do are common reasons for giving freelancing a try. However, working for yourself requires a lot of discipline and a willingness to make some changes to your lifestyle. For example, having a savings of at least three months of living expenses gives you a backup, since that regular employee paycheque ends as soon as you quit. Some clients may pay late, and there can be times when business slows. Staying on top of your finances and preparing for lean times can mean the difference between making it and breaking it as a freelancer.

Understand the Details of Switching From Full-Time to Freelance

When you’re a full-time employee, you often enjoy lots of benefits, and the company handles many things for you. For example, your company automatically takes taxes out of your paycheque. As a freelancer, you have to make income tax payments on your own. Unemployment benefits are also often available when you lose your job through no fault of your own, but this is not the case when a freelance project ends. Canadian law does allow you to access special needs Employment Insurance in case you become ill or pregnant, or if a family member becomes sick and you’re their primary caretaker.

Knowing what you’re getting into and carefully planning the transition from employee to business owner can protect your financial well-being. Tools such as QuickBooks can help you monitor your situation to know when you’re ready for the switch. The QuickBooks Self-Employed app helps freelancers, contractors, and sole proprietors track and manage their business on the go. Download the app now.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

Related Articles

Passing the Torch: How to Transition Management Successfully

As a small business owner, you’ve likely thought about the time when…

Read more

Do Your Clients Have to Pay the Transition Tax?

The U.S. Tax Cuts and Jobs Act sets new tax rules for…

Read more

Excel Accounting: Formulas, Tips and Advice Accountants Need to Know

As an accountant, you most likely learned your craft using spreadsheets, namely…

Read more