Pros and cons of working as a freelancer?

Hey everybody!

I get a lot of questions from people who are thinking about quitting their day job to become a freelancer. And one of the things they often ask about is the pros and cons of working as a freelancer in the e-learning sector.

Since I've never worked as a freelancer, it's hard for me to give them any practical advice. 

So I thought I'd reach out to you fine people to see what you like and don't like about freelancing.

Looking forward to hearing from you! :)

22 Replies
Philippe Siwinski

Hey Allison, great question !

Since I've never worked as an employee, I share my experience as a freelance e-learning consultant. Some points could be also be true for employees. I believe both situations are compatible.

Pros

  • sector with high demand (a lot of opportunities)
  • variety of topics, contexts, people, work cultures (makes it interesting everyday)
  • freedom to accept/decline an opportunity or negotiate the terms
  • chance to contribute to highly funded projects
  • freedom to manage work organization, productivity and time (work asynchronously)
  • possibility to work remotely
  • vast areas of expertise to discover or to specialize in
  • no hierarchy
  • developing a reputation / personal brand

Cons

  • risk of feeling isolated (coworking helps)
  • sometimes too many intermediates
  • sometimes too much work
  • sometimes poor project management on the client side
  • sometimes late payments

 

I think freelancing is not easy but very rewarding.
Meetups, online communities (such as E-learning Heroes), events make it even more fun and social. 

Looking forward to hear from other freelance heroes :)

Ray Cole

I've gone back and forth in my career so far: a few years as an employee, a few years as a freelancer, rinse and repeat, back and forth several times. My personal preference is to be an employee, and I guess my pros and cons list reflect that bias:

Pros:

  • See how training departments operate in a variety of different companies
  • Greater ability to reject lousy projects
  • Less busy-work (e.g., no need to attend company "all hands" meetings, complete performance management "self evaluations", etc.)
  • If working from home, no commute
  • You are often treated with more respect as an outsider than you are doing the exact same work as an insider
  • Generally work with people who are higher up in the org chart than you would as an internal ID

Cons:

  • Typical net-30 or net-45 payment terms mean you will work for 30-75 days before getting paid. That is a long time to go without a paycheck.
  • No income tax withholding, so tax-time means you will owe.
  • Quarterly, rather than yearly, income tax filing
  • Income (and work hours) can be extremely bursty--feast or famine, with plenty of famine. Feast times often come during holidays. I was always busy over the Christmas/New Year/Winter "break" as a freelancer.
  • May be difficult to qualify for loans until you've been freelancing successfully for a few years
  • Extra burden of maintaining books, keeping receipts, itemizing everything tax deductible, etc. I hated this when I was freelancing.
  • No paid vacation.
  • No paid sick leave.
  • No employer 401k match.
  • No pension or 401k.
  • No employee stock purchase plan
  • No stock options
  • You pay the employer and employee parts of many taxes, effectively doubling the amount you pay (e.g., in the US: social security, medicare, etc.).
  • No employer to offer tuition reimbursement
  • No employer to pay for you to attend conferences (or for your travel, lodging, or meals at those conferences)
  • You have to pay for liability insurance
  • You have to pay for and deal with the paperwork for a business license
  • You have to pay for and deal with the paperwork for a fictitious business name/DBA, plus set up a bank account to that name
  • If you incorporate, you'll have to pay fees for that.
  • Working legally from your home may require additional licensing or city zoning approvals
  • No IT department to figure out why your laptop is crashing, your network is failing, or your software isn't working.

As I said, I prefer to be an employee, all else being equal. But I have made it work as a freelancer, and you can too. It's not as glamorous as you might imagine before you try it, though.

Cheers!

    -Ray

 

David Tait

For me the pros are:

  • Having the ability to manage my own time (great when you have young kids).
  • I personally no longer have to travel in to the city, saving me around 2 hour per day.
  • Technically you have no boss so you can do things your way, although this isn't always the case as every client is your boss - he who pays the piper calls his tune.
  • Having more flexibility to work across time zones without being stuck in an office. If I'm working on a project for a customer in another country I can mould my hours around this with minimal impact on my home life.
  • If you're fortunate enough to have lots of work and a good reputation you can pick and choose your projects/clients.

My cons are:

  • Difficult to plan and take vacations
  • Difficult to switch off from work. I used to be able to come home on Friday night and not give work a second thought until Monday morning. Now work occupies my thoughts the majority of the time.
  • If permanently working from home you lose space in your house for your office and your bills will increase. In the UK the allowance one can take before tax for working from home is pathetic and definitely does not reflect the impact on your living space/costs incurred. In my opinion it costs me more to work from home than I am allowed to claim back. That said, if you rent the home you live in and work from you're entitled to a lot more than someone who owns/mortgages their home.
Russ Sawchuk

Hi,

I have run my own one-person business for nearly 30 years. I agree with the pros and cons already mentioned.

What made it possible for me to last that long is having a spouse with a well-paying public sector job along with a exceptional health plan and pension. This is something anyone planning on going it alone should take into account.

Russ 

Bruce Graham

I've done both, from 1986 until 2008 as an employee, and from 2008 until now as a freelancer.

All the above points are valid, and there are another few that I can add.

1. You need to have enough savings for 6 months fallow period before you start. Start working as a "paid hobby" for a year beforehand, to see if the reality REALLY matches your dream!

2. Be prepared to do ANYTHING to survive. It is a HUGELY crowded market at the moment, and if you do not have a USP, and skills in selling yourself, you will/(may) fail. You need to be a salesperson, as well as all the other things in a usual business.

3. It can be HUGELY isolated. I am, in fact, returning to the "paid employee" sector as we speak, not because my business failed, but because working from a home which also used to contain a wife and child, and no longer does, is something that I now find terribly lonely. I'm lucky in that the (dream) job is local, I have the flexibility to work at home **should I choose to**, but I have missed people more than I thought I did. Freelancing can be emotionally draining - you need to be strong.

That's my 2p worth. It's provided me with a VERY good lifestyle and living for more than 10 years, however, all of the things mentioned above WILL happen, both the good and the bad. Being a "freelancer" means being a **business-person**. Are you good enough, and strong enough?

Regards.

Ashley Chiasson

Ou - Great question!

I waffle between freelancing, because I can't resist a good term or permanent gig when they come up, but for the past 5 years I've been doing both.

Pros: 

  • There is a ton of variety with regard to the clients and content you work with
  • LOCATION INDEPENDENCE! 
  • Make your own rules - For the most part, I define my own terms and set my own schedule; this includes allowing time for vacation (I just provide my clients with plenty of notice when I won't be available)
  • Charge what you're worth - This one can be tricky for a lot of folks, but you really do need to charge what you're worth (and account for taxes) versus just accepting a wage based on a year salary

Cons:

  • No paid benefits/vacation/pension - You have to pay yourself those things (factor it in to your rate!)
  • You sometimes have to break up with clients (especially when you're first getting your feet wet and learning things)

My husband often cites 'isolation' as a concern whenever I jump into full-time freelancing, but to that I say "I have the freedom to work from a cafe, the park, wherever (that has an internet connection) if I need human interaction," and it really is true. I'm an introvert, and so I find that I do my best work when I can do so on my own time in my own space.

Matthew Bibby

The main points have been covered above, but I would like to add a few others:

  • As a single parent, with three school aged kids who I look after all of the time, the flexibility that freelancing affords is invaluable. I don't know how I'd manage if I had to be in the office every day. 
  • Freelancing has allowed me to grow a lot more as a person. There are many challenges, frustrations, joys and surprises. I deal with stuff on a regular basis that would never come up as an employee and this has afforded me the opportunity to become a better person. I've always been interested in philosophy and now have more opportunities to put into practice what I've been learning about. For example, I received an email from one of my clients a couple of weeks ago that really upset me. Due to the abrupt tone used and the contents of the email, I started imagining that the situation was a lot worse than it actually was... started worrying, stressing, thinking through how I'd solve all of these problems  etc. Then I remembered that "we suffer more in imagination than in reality" (Seneca) which pretty much means that we do more damage to ourselves by worrying than we do just dealing with stuff as it comes up. So I picked up the phone, called the client, and everything was resolved in 5 minutes (after stressing about it for almost 24 hours!). 
  • There will often be delays around payments. Projects take longer than expected, they drag when waiting for SME's to review stuff, deadlines are often missed (e.g. information being provided late, videos needing to be redone etc.) and unless you are getting paid 100% upfront, these things will likely impact when you get your money. Be prepared for this. Ideally you should have at least 3 months living expenses in the bank. Preferably 6 or more months worth. That will help minimise the stress around money and make the whole experience more pleasant for both you and your client. But even if you aren't freelancing... you should have at least a couple of months living expenses up your sleeve.
  • Work/life balance is a weird concept (because to me, work is part of life). I often go for a three hour bike ride in the middle of the day because the weather is nice and I'm sick of looking at a computer, other times I'll work all weekend and into the early hours of the morning. I'm okay with this. I take time away from work when I need it, spend plenty of time with my kids and am willing to sit down and get stuff done when it's required. So don't stress about trying to balance work and life, just figure out your own rules around this and then stick to them. Downtime is important. Apparently sleep is as well.
  • Running a business takes time. You'll have invoicing, contracts, tax stuff, sales calls, scheduling, website development and discovery meetings that all need to happen.... but you likely won't be paid to do them! This is why you need to charge more. Seriously, whatever you are thinking of charging, it probably isn't enough. I charge five times more now than I did when I first started freelancing a few years ago. 
  • I love the isolation that comes with being a freelancer. There is still lots of interaction with people (via basecamp, phone, video meetings etc.) but it's a lot easier to get into the flow without the constant interruptions that come from working in an office. As a result, I can often get done in 4 hours what would take me all day in an office. And when I do feel lonely, I just call a friend!
  • As Ashley said above... you get to make your own rules. That's a good thing. I have one rule in business. I don't work with assholes. If people don't treat me with the same respect I give them, then I fire them and refund their money. Life is too short for that nonsense.
  • One thing I do miss about being an employee is having someone else who will deal with problems. Sometimes I'd like to go to my boss with a problem and have her resolve it. That isn't an option when freelancing because I am my boss! At times it'd be handy having an IT dept.
  • I get to buy a lot of books and write them off as a business expense :)
Bruce Graham

"we suffer more in imagination than in reality" (Seneca) which pretty much means that we do more damage to ourselves by worrying than we do just dealing with stuff as it comes up."

Very similar to an old German/Black Forest proverb which I adore:

"Fear of the wolf makes the wolf seem bigger"  :)

John Nixdorf

I've done regular employee, contract (when you're an employee of a contracting company that "leases" or "pimps you out" to a business and it's like being a regular employee but no benefits and the contracting company bills about 150% of what they pay you and pockets the rest), and freelance. I much prefer regular employee. Unless you have very specific reasons for wanting to freelance, keep your regular day job.

If you get kicked to the curb from your regular job, you'll probably end up doing contracting because course development is moving to a contractor model. Or maybe you'll try freelancing. But large companies (i.e. "where the money is") often have a procedure for hiring freelancers and unless you have a highly desirable skill set or a "hook" with someone on the inside you may find it difficult to get on the vendor list.

If you just can't help it, and are determined to freelance, read the following article:

https://evolt.org/top-10-lies-told-by-clients

It's really aimed at freelance artists, but it totally applies to any freelance gig.

Follow this format:

1. Meet with the client to discuss needs

2. Write a proposal to confirm the needs, list precisely what you're going to do (unless you can get time and materials, and good luck with that, most companies will want a fixed price, so you will want to be sure to have very carefully fixed and understood deliverables).

3. Ask for a small sum (say $500) to take it to the next step, a "detailed proposal." Basically this weeds out the people who are wasting your time from the people who are interested. If whoever you're talking to doesn't have the authority to spend $500, you're wasting your time.

4. Have clearly identified points where you can bill progress payments, don't deliver the work without having been paid at least 75%, maybe 90% of the value of the contract. At least that way if they stiff you on the final payment, you aren't ruined. If they stop making progress payments, stop working.

Other random thoughts:

1. Make the client responsible for resolving disagreements between SMEs and telling you what the right answer is.

2. Get and follow the client's "style manual." If they don't have one, get them to agree to yours.

3. When someone tells you "A professional is someone who does whatever it takes to get the job done" reply by paraphrasing Abraham Lincoln:  "A professional is a person whose time is their stock in trade, if you want more time, you're going to have to pay for it."

Finally:  Don't quit your day job. If the grass looks greener, it's only because it's over the septic tank.

James Finder

I've been a freelancer for the past 3 years. I've built my business primarily around Storyline content development but am now moving more towards a performance consultant/organizational problem solver who takes a scoop of Cathy Moore's Action Mapping, a sliver of Jake Knapp's Sprint, a dash of Ash Maurya, and a sprinkle of Stanford's d.School.

Pros:

  • Helping internal teams get stuff done! Often times internal IDs get stuck in meetings and other responsibilities and just can't create what the organization needs to create. As a consultant, you support that internal team, make them look good to their supervisors and bonusm get well compensated for performance, not just "putting in the time."
  • Be on the cutting edge. Being a freelancer has allowed me to participate in things like xAPI cohort, become Slack Certified, and play with all kinds of neat tools.
  • Limited to no commute. With my shift to design thinking and performance consulting, I believe this will change.
  • Because you're a consultant, you're respected as an consultant even though you are doing the exact same work as an inside resource.
  • Tax Deductions up the wazoo! However with the new standard deduction, this may change.

Cons:

  • Typical net-30 or net-45 payment terms mean you will work for 30-75 days before getting paid. That is a long time to go without a paycheck.
  • No income tax withholding. Typically I'm socking away 30% of my income on my 1099 earnings to cover taxes. I use Ally Savings to store my tax cash (Get that sweet 1.75% interest!)
  • Feast or famine, with plenty of famine. Need to learn how to get through the lean without getting down on yourself. This is where it really tests you.
  • No paid vacation. No paid sick leave. No employer 401k match.No employee stock purchase plan No stock options, no nada! Need to create your own SEP or Roth IRA to save for retirement. I max my Roth IRA contribution as often as I can.
  • You pay the employer and employee parts of many taxes, effectively doubling the amount you pay (e.g., in the US: social security, medicare, etc). Again the standard deduction change means a lot may be changing.

At the end of the day... I love working for myself but those famine times are rough. The power of positive imagery and belief in one's self is critical to success.

Holly MacDonald

After 11 years of running my own business, I cannot imagine going back to being an employee. The biggest pro for me is not having to play office politics. I chose to go this route, so had time to plan and prepare. It's not for the feint of heart. The stage of life and career experience also plays a role into whether or not this is a fit. I also treated it like a business from the get-go, rather than just considering myself a freelancer. Starting a business is a much more deliberate choice.

I would add to the list  (pro or con is up to you), that you spend A LOT more time doing business development and selling than you think, unless you work as a contractor to someone else who has the client relationship. So, you need to be prepared to spend time networking, prospecting, marketing, estimating, persuading and other sales related activities if you are going to have the client relationship. It does ebb and flow, but I bet that many others would agree that you don't spend all your time doing the fun stuff.

Time spent:

  • Doing actual course development: 25%
  • Admin: 20%
  • Marketing and Selling: 30%
  • Customer Service: 20%
  • IT/Troubleshooting 5%

I haven't actually tracked it to this degree, but it's probably pretty close. 

My 2 bits...

Matthew Thompson

I'm happy I found this thread. I'm also considering going the freelance route, but don't dare take the plunge. I'd rather try it part-time while working my day job, if that's even possible. Does anyone have experience with doing part-time freelance work on the side in addition to your day job? If so, how do you locate those gigs and what are your tips for success? How would someone get started? 

Kris Seguette

I typically work as a contractor on projects at the client's site - usually but not always, traveling to their site out of state every week. I am not strictly an eLearning designer, but an instructional designer for, usually, SAP and other system implementations. The biggest pros for me are:

Making double what I would as an employee
Change of scenery, people, places, projects
The ability to travel and see parts of the country I otherwise wouldn't on someone else's dime
No matter how bad a project is, you know it's only temporary

Cons:

Constantly dealing with recruiters/agencies (most of the companies I work for won't go direct) - sometimes the agencies go three levels deep
Extensive background checks/on-boarding procedures
Having to start all over again every few months
Not knowing what you're getting into
Getting low-balled on rates - my current project pays 50% less than my last one
"All-inclusive" rates