July 23rd, 2007
Elizabeth Cockle writes: Have you encountered any former cube dwellers who left the 9-to-5 world because they could earn more on their own? Making the leap definitely requires guerrilla measures in budgeting and taking second-choice projects to pay the bills, but what about down the line? More women would be inspired to flee the cube with proof that they can be just as financially successful, if not more so, working on their own.
Excellent question, EC! The short answer is, yes, of course you can make more green working solo, and yes, I’ve met many freelancers and entrepreneurs over the years who’ve made as much as or more than their former 9-to-5 selves, in all industries too. But all this depends on your business structure, how far along in your business you are, and what you did in your former 9-to-5 life. For example, last time I was in the cube as a full-timer (back in ’92) I was making under $20K at a book publishing company. Since I already wasn’t earning enough to live on in the greater Manhattan area (yeah, even back then) there was only one way for my income to go and that was up.
I think it’s important to be realistic about the fact that depending on what type of solo venture you’re embarking on, you may not draw much of a salary the first two or three years (despite customer checks pouring in), which experts at organizations like SCORE will tell you is normal for brick-and-mortar businesses with hefty operational overhead and merchandise to make, buy, and sell. But if you’re shifting to a sole proprietorship with minimal business expenses, say as a freelance editor, you should start seeing some green in your personal checking account right away, unless of course you’re undercharging.
Since every industry, solo job, and entrepreneur’s own career path and level of experience varies, it’s impossible for me to say (or even guarantee) that you’ll make X percent more than you did before — and at what point that will start to happen. It’s also up to the freelancer or business owner to negotiate prices and rates wisely (competitive yet commensurate with her experience) so that she doesn’t shortchange herself. And this negotiation should an ongoing process — otherwise, how else are you supposed to get a raise?
It’s also important to realize that just because you make, say, $80 an hour as a freelance copywriter this year and you made $40 an hour last year as a corporate copy monkey doesn’t mean you’re making 50 percent more money than before. This should be fairly obvious, but in case it’s not, allow me to explain: You’re now paying your own benefits; the higher rate should account for that and then some. You’re also not getting paid to invoice clients, market your business, or negotiate contracts; again, the higher rate should account for the fact that you’re working more hours than you’re billing for.
With all that in mind, I think it’s key for cubicle expats to define what “making more money” looks like to them. (You also need a business plan, but that’s a whole other blog post.) How much more do you want to take home? Do you consider it “making more money” if your take-home pay is the same as it was when you were a corporate drone but your billable + unpaid solo working hours now amount to less than 40 a week? (I do!) And how do flexibility, autonomy, and creative control rate? For me and many others, this trio is as critical if not more important than commerce.
Feel free to chime in if you’re making more (or less, or the same amount of) money now that you’re a solo artist or small business owner. What have been the high points? The rough spots? What have you learned? As always, inquiring minds want to know…