5 Resources You’ll Need to Launch a Freelance Business

“When is the right time to start my own business?”

The problem with this question is that the answer is different for everyone. No exact formula exists. No matter what you’re doing or when you start doing it, there will always be an element of risk.

Leaving a job with regular pay and benefits to start your own freelance business is scary.

Some people, like my friend Adam Knorr, do it cold turkey. They just take the leap and go for it.

Others, like me, start it as a side gig and then make the leap when we can replace our income.

No matter what you do, though, there are several resources you’ll need to account for before you make the leap.

Resource 1: Healthcare

Let’s just get the big one right out of the way. One of the great perks of working for a company is most of them provide healthcare plans. When you’re working for yourself, you’re on your own.

If you’re in the US, Heathcare.gov is an obvious option, especially when you’re first starting out. With some of the subsidies and tax breaks available, it could very well be your most affordable option.

You can also go the private insurance route, though it’s pricey. I looked into this myself and even talked to a couple of consultants (aka, salespeople) about it. Being married with 2 kids made it out of our price range though. For single people, it might be more bearable.

Eventually, I went with a health co-operative, which is different than health insurance but has some similar benefits. It’s about 1/3 of the cost what I would’ve been paying for a more traditional plan and I even get some discounts on dental care, which is pretty cool. There are typically some stipulations for these in that they aren’t open to anybody and everybody. The one I use, Medi-Share, is only for people who identify as following the Christian faith. Obviously someone could lie about this if they wanted to, but you’d likely feel rotten about it.

No matter what you decide, you’ve got to consider this expense when deciding if it’s time to make the leap from full-time employee to full-time freelance.

Resource 2: Savings

I’ve always been rotten at saving money. I was the kid who never needed a piggy bank because I spent most of my allowance before it hit my pocket. Not a good habit, and we’re teaching our kids to be better at saving. (My parents tried, y’all, but I’m hard-headed.)

When you’ve got a job, you probably have some retirement account options, maybe even stock options depending on the company. That goes away when you leave. You’re going to need to transfer your IRA into another account, whether you set it up with a bank or alternative savings service.

Around 2020, I discovered Acorns. It was super-easy to set up and it lets me automate my saving. At first, I only had an investment account on there but when I went full-time freelance, I created a retirement account as well as savings accounts for both of my kids. What I love most about it is that I literally don’t think about it at all. It takes a pre-set amount of money from my bank account so I never miss it and then divvies it up so it can grow.

Plus, I can dip into it if needed. A couple years ago, our washer broke down just after I’d gone full-time. We weren’t expecting that expense on top of some medical bills we had, so I pulled out what we needed and got a new washer. Voila. Nice little lifeline.

(Not an ad, but if you use my referral link and sign up, you’ll get a $5 thank you gift from Acorns and so will I.)

Resource 3: Website & Email

If I could go back and change one thing before I went full-time, it’s that I wish I’d put more time and effort into my website AND that I’d set up a separate email domain for myself. The first year I had to toggle back-and-forth between two emails because of working with clients who only knew my old email. I still keep my original, cheap gmail account as a place for business emails, but owning my own website domain and email domain has made a huge difference in presenting myself as a professional.

It boggles my mind that some people think you can get by with just social media. You can’t. I learned from my client Elton Mayfield that your website has to be the hub of all your marketing. I’ve taken the advice to heart and put a lot more time in getting my website where it should be.

As a rule, I like to DIY as much as possible because it’s how I pick up new skills. After having Wordpress for several years, I switched to Squarespace because I like how many features they have and it’s been far more user-friendly…for me, at least. But if you don’t have the time or skill to set up your own site, then you should plan to hire a professional and budget for maintenance fees so you can have your website updated regularly. It’s not a one-and-done sort of thing, so make sure you’re budgeting time and money to keep up with the site.

Resource 4: LLC & Business Account

I’m putting these two together because they really go hand-in-hand. In many states, you can’t set up a business bank account unless you have set up an LLC or S-Corp.

Believe me when I say it gets much easier to do your taxes and make business purchases when you have a separate account to do so. For years, I just tried to keep up with receipts and it was a headache. I’m sure I’ve missed hundreds of dollars of deductions, if not thousands…and I’m pretty good at taxes.

I didn’t set up my LLC until just a few months before I left my full-time company job. What it came down to was the amount I was making, I realized I needed the legal protection of doing business under an LLC vs. my own name. And since I had been using the same business name since 2017, it wasn’t that difficult for me to set everything up.

It still took me about a month into full-time freelancing before I set up the separate bank account, but again, it makes everything more professional and helps me keep better track of what money is coming in and out. Keep in mind, this is just my experience…not tax advice. You should talk to a tax and banking advisor to make sure you’re setting up the right kind of entity and the right kind of business account.

Resource 5: Dedicated Workspace

I struggle a bit with what would be my #5 must-have. In this day and age, it’s easy to think “you can work from anywhere.” And while that’s technically true, it’s a best practice to have a designated workspace set aside. Especially if you have a family or roommates, they need to know your work hours and when you’ll be in your workspace so you can focus on your work.

That’s not to say it has to be in your home. I know other people who rent a co-working space they use a couple days a week when they need to limit the distractions that happen in their home office. I know others (including myself) who have regular coffee shops they haunt.

The point is that before you go full-time, you need to know where you are most productive. I’ve got 2 primary workspaces I use—my home office and then my favorite coffee shop. And that’s it. Moving around to new places all the time is counter-productive for most.

If nothing else, consider this a solid checklist on the road to full-time freelancing. If your freelance income matches what you’re making at your 9-to-5 and you’ve taken all these pieces into consideration, you might just be ready to go full-time. Without the 9-to-5, you’ll then be able to take on additional clients or brainstorm ways to scale your business, develop new partnerships, and spend more time networking.

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