Five Things I Wish I Had Known When I Started Working for Myself

Being your own boss is great! Being your own boss is also hell sometimes! After going from a (cushy) work-from-home salaried employee job to fending for myself as a freelancer, this is what I wish I had known when I started.

Often, people want to freelance or start their own business because they're lured by the freedom of working from home. If that's what you care most about, you're probably better off trying to convince your boss to let you telecommute and learning about the downsides of working from home rather than leaving your employer to work for yourself. Freelancing or owning your own business can have the same benefits (and challenges) of working from home, but there's a whole lot more to consider. Here are the five biggest things I think you should know.

1. You Might Be the Worst Boss Ever

It's true when you're an independent contractor or business owner your clients are your collective boss, but that's not really the same as being beholden to one company holding the purse strings. When you're a company of one, it's much easier to let your weaknesses (e.g., procrastination or poor time management) get the better of you. Even if you thought you were productive as an employee, you might be nowhere near as productive when you're working on your own.

For example, when I was telecommuting, if friends who had the day off asked if I wanted to go out to (a usually 3-hour) lunch, I'd turn it down. Working from home for a company is a privilege I was very protective of, I knew my boss (a check-in-often type) wouldn't approve of me being out of pocket for half the day, and I felt guilty using my work time for personal things.

As my own boss, however, the temptations are, well, more tempting. The lenient boss in me says, "Go ahead and have lunch, you can work later!" and then nothing gets done that day. As Brazen Careerist writes:

When you finally make the commitment to attack your side hustle for real, you will suddenly find yourself deeply compelled to attend to all sorts of random things instead of your side hustle. This is the result of several factors: fear at failing if you begin, passive-aggressive resentment of all the work ahead of you, procrastinating because you're not sure where to start.

What you can do about it: You'll need a strong work ethic to begin with, but perhaps even more important is to schedule your work hours and consider them set in stone. E.g., between 8 AM and 2 PM only emergencies can pull you away (this helps when working from home with family around as well). If you find it really hard to motivate yourself, you might need to get a personal assistant to keep you on track or reconsider working for yourself. You need to be both a good worker and a good manager to pull this off.

2. You Are the CEO, Sales Department, Product Department, IT and Customer Support Team, Operations Team, and Janitor

Everyone knows you'll have more than one hat to wear if you go it alone, but there are two things about this that might throw you off:

  1. You under-/overestimate how good you are in a particular role. You might think you're great at customer support but actually hate it when you're doing it for a product you're producing. Similarly, I've always dreaded marketing and sales, but given something I'm passionate about, I'm not (completely) horrible. The point is, don't be afraid to go into business for yourself if one of these areas is a weak spot. You can develop these skills or outsource them if needed.
  2. You have to do all of these tasks regularly. That said, plan on marketing/selling yourself more often than you might be comfortable with and dealing with the grittier side of owning your own business (more paperwork! tax headaches!) than you might have expected. If you neglect any sides of the business for too long, you'll run into problems.

What you can do about it: It's definitely a juggling act. Know which roles you're not great at and either work on them or outsource them so you can focus on your strengths. For getting more comfortable in roles you might not be used to, check out a few home-based business books/guides from the library to give you the advice you need to at least make sure your bases are covered. For creative types, I like The Business Side of Creativity and for general self-employment, Small Time Operator.

There are only so many hours in the day, so you'll need to carve out your time diligently. (More on that in a bit.)

3. You Might Not Remember What "Free Time" Is Anymore

The nice thing about being an employee, at least in many fields, is when you finally pack up and go home, you're on your own time. As a freelancer/business owner, when you have everything—not just money, but time and emotions—invested in your endeavor, there's no real "going home."

Part of this is there's just so much more to take care of (see the point above), and the other part is you might always be thinking about your work. Working on your business is both a pastime and a responsibility that can eat into your entire day or take over your life if you're not careful.

(I sometimes joke that Lifehacker is both the most and least productive site for me. It's easy to get drawn into something you enjoy—especially if it helps pay the bills—and also become less productive in other areas of your life.)

What you can do about it: As much as I hate a rigid schedule, the fix, again, is to schedule your day, and also to be mindful of whether what you're doing is really productive /for work or for entertainment. I'm learning to be much more protective of my personal time and not let seemingly work-related activities (goofing off with co-workers...sorry Whitson & co!) look like work.

4. The "Feast or Famine" Cycle Is a Vicious Rollercoaster

One nice thing about being a salaried employee (or W2er) is predictability: Every paycheck is the same. Your taxes are paid. Your benefits are set. Your vacations and holidays are assured.

When you get a 1099 (as a contractor or freelancer) or own your own business, your earnings—and how much work you get—are largely unpredictable. Count on it: There will be times you'll have more work when you can barely handle it, and little to no work at others.

For my part, the first year I started freelancing, writing jobs came and went. At first, I had to learn to hustle, pitching as many opportunities as I could. Then, after a time, I was so overworked and frazzled, my biggest issue wasn't making money or finding work, it was staying sane. When you're on your own, you're more likely to burn out after taking on any and all work that comes your way. (You're like a wolf or other wild animal that doesn't feel confident about the next meal, so you take on every job. You feast, if you can.) Turns out I made much more than I was setting aside for taxes and that bit me hard the next year.

What you can do about it: To get off that rollercoaster, you have to plan your time so you're always working on all areas of your business. Brent Weaver on Speckyboy says you should create time to do all of the following:

Market -Getting in front of qualified prospects

Sell – Interacting with a qualified prospect

Produce – Creating whatever it is you sold

Support – Maintaining projects you've already built

Operations – Billing, systems, and overhead

What I wouldn't suggest is to start carving into sales, marketing, and ops time in order to get projects done. This will only lead to future pain when you finish your project and you enter your famine cycle.

He recommends allocating your time like this:

So you know that you need to carve out 50% of your forty hour work week to production. Which leaves the other 50% for the other activities I mentioned. Since support should be production and a profitable part of it, you need to fit marketing, sales, and operations into the other 50% of your activities.

My recommendation would be to do 20% sales, 10% marketing, and 10% operations. That should add up to 90% of your week. The remaining 10% should be allocated to personal time.


To deal with your irregular income: Set a baseline budget—what you can expect (at least with some certainty) to earn from your regular clients. This is your "bread and butter" budget. Everything else is gravy, and you should send that "extra" directly to your savings account. This will help pay for additional taxes and all the other expenses you didn't think about (there may be lots!). This is really hard the first few years you start out, because you might have no idea how much you might make. It helps to have a good accountant early, so you can update your estimated tax contributions as necessary.

Make sure you're charging enough: In addition to covering your taxes, what you charge your clients should also account for other benefits employees enjoy: vacations and other days off, retirement savings, and health insurance. For ballpark figures, go to and look up average benefits for your occupation. Charge what you're worth and don't undersell yourself!

Don't take on too much work: Also, learn to say no and when it's time to quit a project—it's as important to plan for success or growth as it to have a plan B for failure. (One of the top reasons small businesses fail is out-of-control growth.)

Finally, try not to stress too much when work gets slow. Keep looking for opportunities, keep in touch with former clients, and work on the business areas mentioned in point 2 above.

5. You Might Envy Your Salaried Colleagues

There was a point in my life when I had to decide between becoming an employee or staying a freelancer. In general, I think made the right decision for me, but I still wonder sometimes, especially when I read articles that say things like this:

If you're the worker, you may be tempted to say "1099," figuring you'll get a bigger check that way. You will in the short run, but you'll actually owe higher taxes. As an independent contractor, you not only owe income tax, but self-employment tax too. On the first $113,700 of income, that's a whopping 15.3% rate. Beyond $113,700, the rate drops to 2.9%.

Similar "am I doing the right thing" times include when I dread taking a vacation or sick day, hear colleagues talking about benefits (retirement matching, gym membership reimbursement, paid sabbaticals!), and, of course, tax season.

What you can do about it: Doubt is fine and normal. Remind yourself that if you were an employee, you might be wondering "What if?" as well ("the grass is always greener…"). And then remind yourself of all the benefits of working for yourself, including: greater/more diverse work opportunities, more flexibility, and more job security—and why you got into this in the first place.