November 17, 2021

Freelancing Vs Full Time job - Which Should You Choose?

I don't want to talk about the obvious things you already know. We're not going to talk about location, freedom, being in full control of your income. These things are all pretty obvious. So I thought I would cover some of the things you maybe didn't think of when it comes to choosing freelancing & full-time.

I'm a bit biased because I left full-time for freelancing a couple years ago. But I will really try to be as balanced as possible here and after kind of going over the pros and cons we will talk about a couple frameworks for maybe choosing which one is right for you and a few different creative ways you can actually weave the two together for your career.

Pros of freelancing

Let's get into the pros of freelancing. Why is that maybe something you'd want to do over full time?

So the first thing is it's not just that you can make more freelancing it's that by definition you must make less in a full-time role.

Let me explain that. So so you are only profitable as an employee if you're costing the company less than you're either making it or saving it money. So the employer is kind of like the middleman taking their cut between you and the market. Except that cut is usually going to be in the case of healthy margins. It's going to be more than half because they have all these fixed expenses and other things so you're likely only one expense of many.

However, if you're freelancing margins can be up to 90% or above meaning, you have very little expenses.

So you're able to capture all that value and it's going directly to you.  Just a quick example if you work for a development agency and the company gets a job for $5000 then you're gonna be lucky. If you're getting a cut of that $5000 at all more likely you're gonna be on a salary going to be considerably less than the value of all the deals that the company creates the next pro freelancing.

If you develop all these lateral skills like communication, sales, and marketing and these are super valuable even if you want to apply for something like a full-time job. Because that is you know something you need to market yourself for.

You just create more opportunities for yourself in life when you understand these skills. So, I don't think it's any secret that knowing these skills is extremely valuable you get a chance to develop them and in fact you have to develop them to be a successful freelancer. But that's not actually a pro for everyone.

The next benefit is actually not just that you can get and work with the clients you want but it's you can actually fire the clients you don't like.

Of course, you don't want to be going around. But there are ways you can fire your clients indirectly like saying your rate is going up.  And that could be legitimately true. If they're not into it? Then great, you don't have to work with them. And if they are then you just doubled your rate or whatever you decide to do

So having to control the people you interact with on a daily basis that's just never a choice you have as an employee.

In fact, freelancing is a business from day one. But you can really scale it directly by hiring additional employees and subcontractors, offering a wider array of services, or taking the skills you learned and building a lateral business based on the problems you discovered by freelancing with your target clients.

This also means from the day when you can deduct your expenses so if you buy something like a laptop you can subtract that as a line item and actually not pay taxes on that because it's a pre-tax expense.

Full-time Job

A full-time job is a decent choice if you have a certain set of priorities.

The first plus of full time is you can focus narrowly just on the technical skills for your job.

If you're in more of a technical role that means you don't have to do sales marketing or interact with people as much as you can. Just get that really narrow focus. Even if you're doing this narrow focus for a limited period of time and you're just going all-in on the technical skills that can allow you to acquire skills really fast. Faster than you would.  Otherwise now I think this let's say the technical focus is great but you just want to make sure you're not making this choice based on limiting beliefs you have. So you could think you're not you know a natural fit for sales and marketing.

But I think it is something most people can learn or at least get better at over time so you just want to make sure you're making this decision for the right reason so that narrow focus is particularly powerful when you couple it with the next point which is you're actually getting paid for professional training or learning when you're on a full-time job.

I always use the software developer examples because I am one myself. I mean if you just go into a company for six months as a junior developer if you can be fortunate enough to land one of those roles. Then you're basically going to have people you can ask questions at any time of the day in person they're going to be ramping you up and you're all going to be getting paid for that.

They're going to be getting paid to train you you're going to be getting paid to learn.

So there's no question that you're going to become a better developer by having in-person mentors that you can kind of ask questions at any time of the day while concurrently working on these real company projects.

Next, when you have a full-time job you can be 100 off. When you're off that means when the workday ends you don't have to keep thinking about work. In a lot of cases, I know this isn't universally true. Our brain keeps thinking about our job when we go home. But at least, in theory, this is true.

When you're a freelancer you know money never really sleeps and if you don’t have kind of the self-control or I guess your mindfulness game on the point where you're meditating and you're not able to kind of control your mood and your thought patterns then it can be a bit stressful actually.

As a freelancer that you don't have to worry about when you can be off the clock and the final pro. I mean the obvious one is stability like stable income. If you have financial obligations and so. But people don't often think about is the benefits I mean especially if you have a family in the U.S. you have to pay for health insurance. This is a huge monthly expense that you're gonna have to pay on your own if you don't have an employer so that is just one thing to be cognizant of and it's a pretty big overhead. You don't have to worry about it again if you have full time.

A framework for choosing maybe you're weighing your options between the two.

You want to learn a new skill but you're not sure if you want to go the full-time or the freelance route.

We’ll just run through a set of questions one of which of these might sound like your personal situation.

Question 1 "Would you like to be an entrepreneur or self-employed?"

If so the answer is pretty clear. That freelancing is going to help you!

If it doesn't lead directly into you. Having a business with that natural transition we talked about scaling with additional people as soon as you have the bandwidth to do that.  Even if you don't go on a freelance and your niche those meta-skills the marketing, sales, customer service, delivery, and kind of realising that working directly with people isn't some magical thing. It's not as hard as you think you know. These things are all going to benefit you in your future self-employed career.

Question 2 "Are you deathly afraid of putting yourself out there or you're really sure you don't like interacting with people especially not with clients?"

If you got disillusioned with a terrible customer service job in the past or you think you're too introverted. To freelance you know that's kind of a different thing than genuinely knowing. You just want to focus on code. I know people are going to say you still need communication skills to work on a team and that's true. But, team communication skills are way different than you know.

The level you need to go to freelance is like sending follow-ups communicating fast enough to delight customers and convincing people to work with you in the first place.

Question 3 "Do you have financial obligations?"

Student loans, insurance, cost of living. What do those look like for you?

If it's a prohibitive level you might want to look at starting to freelance on the side while you still have another job of course.

It's going to take longer but you can't really do anything about it.

Or if you have the ability you can do what I did -  which is to move to a lower cost of living country. Personally, I moved to eastern Europe. There’s plenty of places you can go. A lot of people go to Thailand. I don’t think I could be so productive there. A lot of people go to South America, Mexico, Colombia, these types of places. I personally went to eastern Europe because for me that had the best trade-off between quality of life and cost initially.

Last Question "Are you sure you want to do full time?"

Are you sure you want to do full-time but not sure how to break into a full-time role especially if you’re doing something more technical where you can teach yourself? How do you actually get that first job?
Kind of weave these things creatively together and one actually way to do that and kind of cleverly weaving these together is you can start freelancing which sounds counterintuitive but you can work on the simplest jobs. You can find they're simpler more beginner ones than you probably think until you look.

Once you do that you can kind of build up a resume of real-world projects, build up some references, you can send to your employer and you're effectively separating yourself from the crowd of people with legitimately no experience as someone who is actually a developer, who's worked with real clients and probably you know created some value for businesses which is what prospective employers want to see. This is kind of the model we do teach in Freemote freelance developer bootcamp.

You can check out the link below if you do want to become a freelance developer. Actually in a surprising amount of time as many of our students have done it.

So with that said I hope this helped you kind of clarify your thoughts clarify your thinking with these questions and pros and cons between freelancing and full-time.