You are a small business. Freelancers may only work out of their bedrooms, but they’re still small business owners. As a freelancer, the time will come where you have to decide whether you want to expand your business or stay as you are.
Now, you might think it would be madness to not expand and grow bigger. In some situations, it can be beneficial to stay small and play it safe. Expansion is a risky strategy that has destroyed many a flourishing small business. In fact, 8 out of 10 small businesses fail in the first 18 months.
Here are some of the tough decisions all freelancers have to consider.
Are You Willing to Dedicate the Time?
Expansion requires most of your waking hours to complete. It will get better as you establish yourself, but in the beginning it’s long hours of toil and struggle.
The first big decision a freelancer will have to make is whether they move from doing it part-time to doing it full-time. Are you willing to pack your job in in favor of working for yourself?
Assess your life circumstances and any dependents you have. Work out whether you can fit their needs in with yours, and whether you’re even willing to take on this type of lifestyle.
What about the Money?
Business is always about money. Expansion is expensive. It may be about taking on employees or trying to branch out into a new line of services. Work can dry up quickly and it’s rarely consistent in the beginning.
Do you have the money to sustain yourself during periods of famine?
Before you expand, you need to understand how much money you need in reserve depends on who you are and your current lifestyle.
Single people can get away with having six months of expenses put away. Those with families will want to aim for at least 12 to 18 months. You don’t want to put them in a difficult position, as well, should things go wrong.
What are the Potential Returns?
Millennials, who make up much of the freelancing world, are a generation committed to making a difference through their line of work. We could write them off as idealists, but with the freedoms in the workplace afforded today, this isn’t possible any longer.
According to an article by Forbes, 72% of students want to make a difference and 53% of workers want to make a difference through their jobs. These are the main returns a lot of people want. Will expanding your freelancing business bring you closer to these goals?
There are also the money issues to take into account. If you’re taking a big risk for a few extra dollars a month, it’s probably worth staying small and looking for a further opportunity in the future.
Do You Want To?
This is the biggest consideration of all. You shouldn’t feel like you have to take on large projects like business expansion. Many people prefer a steady stream of work at a lower rate. They don’t want the stress and the hassle of dealing with the pickier clients, even if it does mean more money.
There’s nothing wrong with this. All that matters is your decision conforms to your expectations. Ask yourself whether you want a big house or whether you’d rather have more freedom and less stress.
You’re the only person who can answer this question. Either way, this is a decision you should never take lightly. Spend a few weeks, or even months, mulling your decision over and make sure your final answer is an informed one and not one you’ll regret later on.
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