8 Tips to Effectively Transition from Corporate to Freelance Job

1.   Secure your first set of clients

If you can secure a few clients before quitting your corporate job, then you’re starting in a strong position. You must make sure you have a definite source of income before handing in that resignation letter. Diving straight into full-time freelancing is not a practical idea, as it can pose unpleasant financial consequences in the long run.

So, how do you find your first clients? Talk to your family and friends and let them know you’re engaging in freelance projects. You’ll never know who might need your services within your immediate circle.

Also, if you have a good working relationship with your employer, there might be an opportunity to work as a freelancer for the company. You might have developed a unique skill set that might be useful to the organization. By leveraging your skills, you can get your employer to hire you as a freelancer.

2.   Determine the services you wish to offer

Think about your skills and expertise. What specific services do you intend to offer to your target clients? More importantly, what certain tasks would your potential customers need from you? 

Consider reaching out to a few prospects and testing your ideas on them. Let them know you’re interested in learning what they do. See if their needs require the services you plan to offer. This will help identify if there will be demand for your services.

3.   Price your services properly

Pricing is one of the hardest things to figure out if you’re starting to freelance. A good rule of thumb is to work out your rate from your desired salary. If you had a full-time job doing what you do as a freelancer, how much annual salary would you require? 

Tip: Take a look at the rates of comparative jobs in your area. Suppose you find a job that pays P500,000 annually, which sounds fair for your level of expertise. From there, convert it into your day rate. There are online calculators you can use, but the basic formula is to divide the salary by the number of days worked.

So, divide 500,000 by 250, as there are roughly 250 working days in a year. That puts your day rate at P2,000. But since you don’t get all the perks of a full-time job when you’re freelancing, you’ll need to add a certain percentage to cover costs for health care, allowance, vacation time, and other related expenditures.

Most people will add 20%, but that’s often not enough, so play it safe by increasing it to 50%. This brings your day rate to P3,000, which will be your basis in pricing your services. 

4.   Create a detailed freelancer budget plan

A budget plan allows you to track your spending. The general rule is that your income should be higher than your expenses.

If you’re in a situation where your expenditures are bigger than your salary, find areas where you can cut costs. For instance, you can cancel inactive subscriptions or trim your expenses on take-outs. Adjust the categories so you can increase your income and balance your budget. This way, you’ll have an improved cash flow that can sustain your freelancing project in the long term.

5.   Consider looking at different health coverage plans

Health insurance will help cover medical costs you might incur in the future. Some insurance plans even provide compensation during hospitalization. Others offer cash benefits in case of emergencies like accidents.    

There are various available health insurance plans you can choose from, and they provide coverage of up to 90% on medical costs. Some providers have also integrated health insurance into life insurance, offering a comprehensive package that features lifetime protection.

6.   Set up a workstation

As a full-time freelancer, you need a dedicated space where you can work. It’s much like reporting to the office – the only difference is that you’re a freelancer.

Your workstation doesn’t need to be fancy. Check out retail stores for affordable desks and lamps. Get yourself a good chair, too. If you don’t have a place to sit down and work, you may find it hard to focus and get something done.

7.   Create your website

Having your website can help boost your credibility while increasing your chances of getting more clients. According to a survey, 86% of website visitors want to see information about the company’s products or services. Another survey showed that in 2020, 51% of small business owners had increased online interactions with their clients through their websites.

Some platforms let you pick customizable templates and get the site up and running in minutes with no coding required. Some even include a website builder that allows you to create a website for free. Maximizing these perks can increase your online visibility, helping you reach more potential customers.

8.   Join an online community

Being part of an online community allows you to interact with other freelancers who have already gone through the things you’re about to experience. You can ask them about how to handle a certain situation or what to say to a new client. Being part of a group can help you navigate the tricky path of career transition.

Final Message

While transitioning from a corporate job to freelancing may sound tricky, preparing for it can make it easier for you to deal with the risks that come with the process. With proper financial management, you can be certain your venture into freelancing is off to a good start. And since freelancers tend to face more financial challenges than traditional employees, following the tips above can help you secure a better future.

If you’re looking for freelancer-friendly savings and health insurance plans in the Philippines that provide comprehensive coverage, BPI AIA offers various insurance packages. Get in touch with one of our Bancassurance Sales Executives today to learn more about our insurance policies!