How much cash should I have in my bank account before I can quit my high-paying full-time job and try freelancing? Anything I should remember before I quit?
To answer this question, the first step it to calculate his minimum survival expenses.
It is the minimum amount one needs to survive for a full month. Do your own calculation and come up with a number that is needed for you to survive for a full month. Keeping the expenses lower will always help but don’t miss the expenses that aren’t monthly in nature and are quarterly or yearly.
Once you have done the calculation, it is good to have a minimum survival expense of 6 to 8 months before you should quit the job. Having a 6 to 8 month of survival money can mean you can survive for one full year without earning the minimum survival expense.
Let us say your minimum survival income is ₹25k. If you have ₹200k in your bank account you can survive for 8 months.
In the first couple of months you may not make any money but from the third month onwards, even if you are making 10k per month which is close to $160, you are only using up 15k per month from the ₹150k survival money after a couple of months. it means you can use it to survive for 10 more months.
We assume, your income to be under $200 for a full year which often won’t be the case if you have done few projects and has built some regular clients.
Here are 5 mantras to be able to start freelancing without many hiccups.
1. Be Debt Free
If you have a loan, it can be a killer for you to be able to try freelancing. You have to get rid of it as soon as possible. If you are starting to be a freelancer, debt can kill your business even before it is started.
Freelancing can have money coming in but at a slower pace or at times that is different than when a bank needs them. Instead, if you have a loan, consider freelancing as part-time and start paying off your debt with the extra income.
2. Fail Swiftly and Fast
Failure is part and parcel of any business and freelancing is no difference. Failure is important but failure should be early, often and not very hard to make you quit freelancing.
Trying one niche freelancing but if it doesn’t work, you should be ready to be able to make a move to the next niche. There isn’t a movie being made on you and you have the right to switch or even quit.
Remember you aren’t Elon Musk and so each of your projects need not be super successful.
3. Manage Risk
When you are starting out, if you find freelancing risky, opt for a part-time job.
I prefer to be a part-time freelancer and though I don’t do a full-time job I do like to blog and dedicate time to investment researches and work few hours daily for my clients. Freelancing, blogging and investment provide me the needed diversification to manage risks.
Similarly, there is no harm in managing your risk of freelancing with a part-time job is a good choice to make a move towards being a freelancer.
4. Avoid An Investor
Freelancers don’t need an Investor. You can start freelancing from your personal computer at home and can start interacting with clients from home with a decent Internet connection.
You don’t need a tech-savvy office and over the top expensive gadgets when you are just starting out.
If you are planning to hire people and start a company, it is altogether a different ball game but before doing that, you should be able to have few regular clients.
5. Build Regular Clients
People often consider getting clients is the toughest part but with so much demand for freelancers, it is the other way round.
So many clients are being ripped off by freelancers every day but it means new freelancers are provided with opportunities. It isn’t tough to get new clients but the tough part is to be able to convert them into regular clients.
Look to convert your existing clients into regular clients because finding first few clients is as simple as going through your contact list and making few cold calls.
Freelancing means do what you love and in the process make enough money to be able to pay the bills and enjoy your life.
I often see many consider freelancing and the reason being they are fed up with the job. If your job is painful, you should get a new job and not consider freelancing. Freelancing is by choice not out of compulsion.
Further Reading …