Financial Planning to Start Freelancing (Patreon)

Unrolled from a Twitter thread. Apologies for any typos.

~

So you want to quit your job and freelance fulltime. Nice! Let's talk about what you should expect and how you should plan financially.

Saving up beforehand

Expect to not land a contract for at least 4 months. Have enough savings that you can float along for at least that long. I started freelancing in march and didn't say yes to a contract until late July last year, and I considered myself lucky to find something that quickly. There's a lot you can do to bring in a few hundred bucks each month to elongate those savings. I did mentorships and a few commissions. Not $20 commissions, mind you- I don't really do commissions for less than ~$150.

This is also when I started my Patreon! it helped a lot by bringing in ~$500/month. Small patreons are awesome and every penny helps, but if you want to rely on your Patreon income a bit, the reality is that you need a large audience in order to make that possible.

This is a good period to have a chill day job. Working at a coffee shop even for like, 10 hours/week can bring in enough to keep your bank account from dropping to zero. Pleeeeease consider doing that.

Commissions, for 99.9% of artists, are not sustainable. I personally could not make it work. The numbers just don't come out in the green. More here:

the reality is that commissions, except for .01% of artists, are absolutely unsustainable. folks doing full illustrations for $200 when custom illustrations should be like, $1300 minimum + rights/royalties.

 — becca hallstedt | they/them (@beccahallstedt) https://twitter.com/beccahallstedt/status/1153702619023577088?ref_src=twsrc%5Etfw July 23, 2019 

So when i say "freelancing", I mean working contracts for companies/small studios that are paying you a living wage.

If you are having issues finding work, it is almost always either an issue of hard or soft skills.
Hard skills = art quality
Soft skills = network/professionalism

(There is always obviously luck + privilege involved. I will never deny that...but when people complain to me about not being able to find work, 80% of the time, I look at their portfolio and it is a skill level issue.)  

After you sign a contract

OKAY so you got through the waiting period and landed a contract!! Congrats! 🎉

A few things to expect financially: first of all, most freelance contracts are part-time. Most of my gigs have been a commitment of 10-15 hours/week, not 40 hours/week. Budget appropriately.

This is part of why i usually work at least 2 contracts simultaneously at all times. I also like to work multiple contracts to mitigate risk. You baaaasically always want to assume that your pay with either be late or never come in at all. That's just part of freelancing. more on that later.

Anyways... plan with this assumed schedule in mind:

Let's say you start working the contract on January 1. you will invoice the company on Jan 31st. They will then have either 2 weeks or 30 days to actually pay you. That means even after you land that contract, you probably wont be paid for at least 6-8 weeks later.

That's another 2 months of savings you need to float by on...if you get paid at all.

Spreading out your sources of income is essential cuz there's a chance that clients will ghost you. It occurs at one point or another to everyone. You should also just assume you will always been paid 2 weeks late. It just happens.

So how much should you save up? enough for:

-rent
-out-of-pocket health insurance
-emergency savings
-food, utilities, pet/dependent expenses
-commute/car stuff
-loan payments
-etc

For minimum 7-9 months.

"So i don't need to save up this much if I do commissions, right?"

Wrong. Almost nobody is making enough off small private commissions to float by. Please do not expect to make a living off of them.

"So how do you know when you can quit your day job?"

Good question!

1. You have a strong network.

I felt like i could "take the leap" because I had over 8k followers on Twitter (where all my work comes from), over 9k followers on Artstation (I was already getting small contract offers thru there), and I was deeply engaged with other pro devs. You cannot expect to freelance without a network of other professionals. You should be getting freelance offers before you even quit. 

I don't have to look for work. Ever since i started freelancing, it has come to me. That was the validating sign that i began at the right time.

2. You have enough savings to cover your costs of living in YOUR area. 

I had about $15,000 saved up, partially from selling my car. This was for MIDWEST living expenses, NOT for California cost of living. I would have needed to save much more to live there while freelancing.

3. You have an UPDATED portfolio. 

I was working at my in-house job during the day and making art for 3-5 hours/night in order to have fresh work. When I quit, I kept continuing to create personal art for about 2 months, ~6-10 hours/day until i landed my 1st contracts.

4. You are HABITUALLY SELF-DISCIPLINED.

You cannot freelance without being able to hold yourself accountable for getting work done.

Freelancing is not for everyone. I know a lot of really badass artists that don't freelance because they know they would struggle with this. 

There are a lot of people out there that romanticize freelancing, but I hope this provides a glimpse into the realities of the financial side of it. If you really want to make a living this way, please take it very seriously, and don't take the leap until you're really ready.