Many people are reluctant to become freelancers or consultants because the risk seems too high. You have flexibility to set your work schedule and take the kinds of projects you want, but you trade that for the security of a full-time job.
I’m not convinced that working independently is necessarily much riskier than a full-time job though. In fact, sometimes it can be safer.
The Risks of Full-Time Employment
Having multiple clients and income streams can actually be more secure than having a single full-time income.
Think of it this way: you would never invest everything in your IRA in the stocks of a single company. That would be ridiculously risky to trust your entire future retirement income to the success of a single enterprise.
But full time employees trust their entire present income to a single company. If they lose their job, they lose 100% of their income. They usually have to ramp up from nothing to find a new one.
Reducing Risks, Increasing Security
Multiple Clients Reduce Risk
I usually have at least two active clients at all times, plus sometimes smaller side projects and more in my pipeline. If one of my two current big clients suddenly cancels their project, it will hurt my income–but not nearly as much as losing a full-time job hurts. I’ll still have income coming in from my other active client.
Nurturing Leads and Your Network Increase Security
I also have the security of having additional leads so I can ramp up quickly on other work. I have a network of colleagues. I refer work to others when I’m busy, and they return the favor. I know I can reach out to my network if I need more work.
Being Able to Find the Next Project
Yes, my income is variable, and I have had both good and bad years overall. However, I don’t see freelancing as being as being that much less secure overall than having a full-time job. The security comes from being able to find the next project, not from having a guarantee that the current project is a sure thing.
After all, if you have a full-time job and it ends suddenly, your security is really a measure of how fast you can find a new job. Freelancers and consultants are generally better prepared for finding that next thing.
I think many of us consultants and freelancers probably have more security than we realize, and many people in full-time jobs don’t realize how little security they truly have.
More Freelancing Tips
Kai Davis shared some ideas on the balance of flexibility and security in his daily email newsletter for freelancers. This is based on my response to his email. If you’re interested in learning more about other ways to improve your security (and improve your processes as a freelancer in general), I recommend his newsletter.