Want to Transition to Freelance Product Design? Here’s How.

If you’re anything like me, you’ve got strong ideas, opinions, and preferences on the types of projects you like to work on. But when you’re employed by someone else, they call all the shots. That can be frustrating. Also frustrating? The limited earning potential (odds are, you’re worth more than what your company’s payroll department says you are). All understandable reasons to consider the leap to full-time freelance. For me, though, the most difficult part was trading a well-paying job where my income and workload was steady, for the uncertainty of striking out on my own. If you’re already employed and looking to make the leap to full-time freelance product designer, here’s my step-by-step advice.

First, plan for a smooth exit.

Resigning full-stop might feel satisfying in the moment, but a smart exit strategy will pay off down the road. Rather than making a beeline for the door, make sure your route includes a smooth financial transition to full-time freelance. Make the jump in a way that keeps your professional relationships intact. And make sure you know the expenses you’ll encounter up front. Here are a few pointers:

Add some cash to your cache: Start generating passive income

Calling all night owls, this tip is for you! Instead of simply jumping ship, I used passive income as a bridge. In the evenings and on weekends, work to create a variety of different types of passive income streams. Try to mix it up, finding out what works for you. I experimented with everything…affiliate marketing, website templates and stock illustration. Mixing it up also has the upside of diversifying your income streams. That way, when — not if — one begins to fizzle out, you can put energy toward other streams to absorb the decrease. As the passive income you generate starts to outgrow your monthly expenses, bam! That’s when you know it’s safe to step out and make the leap to full time freelance product design, without worrying about having to take on projects that aren’t the right fit for your skills or preferences.

Some ideas to get your passive income flowing:

• Create design assets: Create assets to sell via download on sites like CreativeMarket, GumRoad, ThemeForest. Think web themes, templates, stock illustration, photography, 3D assets and much more.
• Create a video course: Video superstardom awaits. Create a YouTube channel and monetize it with ads. Do you have great skills with a particular industry software? Show them off in a series of videos on Udemy or SkillShare. Think about the frequency with which new product design software comes to market. Are you kidding me? There’s a never-ending need for new tool tutorials!
• Become an affiliate: Sign up for a design product or service’s affiliate program. You’ll get a little kick-back every time someone makes a purchase. To make this work, you’ll need to promote your affiliate link in creative ways, like through a niche blog you run, or through a social media platform you have a following on. Try Webflow’s affiliate program. Full disclosure, I get a little kick-back if you sign up with that link. 8)

A matter of time: should you prioritize passive income?

It should go without saying, your current employer would likely frown upon your doing side work on their clock. And after a while, the night owl life, working during nights and weekends to build passive income streams, will get old. Now it’s decision time. It may be time to reduce the number of days per week that you work, because even working one day less per week can create the extra time you need. Additionally, you’ll have time to try and pick up small client projects. Before you make this leap, check your contract or make sure it’s ok with your employer to take on outside work.

That passive income stream will come in handy once you make your move to being a full-time freelance product designer. Because once you’re the boss, all those perks and necessities you enjoy compliments of an employer are on you. Next, we’ll take a look at a few of the costs you’ll want to figure in.

Funding the fun: costs and considerations

Insurance

You’ll need health, vision, and dental insurance for starters. One popular way to explore health insurance options is healthcare.gov. It’s a marketplace operated by the government. You can research and compare plans and enroll in them on the spot.

Some clients, like the government, will require you to carry business liability insurance. One good resource for this is nextinsurance.com. Their professional liability coverage can protect you in instances of a business disagreement or where a client sues, accusing you of making an error, not completing a job or missing a deadline.

Software licenses

Figma…Sketch…Zeplin…Photoshop…it all adds up! If you haven’t already you’ll need to license your own software now. And that doesn’t include things like continued education and events — think Adobe Max, Google I/O etc. Make sure to get a feel for what it’ll cost to maintain the workstyle you want. Adobe Creative Cloud is one place to start researching plans and costs.

Co-working space

Will you work from home? If so, great. These days you’re probably already doing it, at least a little. But if you’re not, you’ll need a quiet space to concentrate on design thinking. Wherever you work, your space should be presentable for video conferencing. If you’re at home, take a look at your background. Get rid of clutter — anything that your camera shows should show you off as the pro that you are. If working from home isn’t an option, consider snagging a coworking spot along with other dedicated independent professionals. WeWork is a good starting point to research locations and costs.

So, now you’ve got a handle on your expenses. You’ve built a passive income stream or two. Maybe you’ve even made contact with a potential client. Only one thing left to do — make your move to the freedom of freelancing.

Are you in, or are you out?

The passive income bridge isn’t the only bridge you want to have intact. Make sure you don’t burn any bridges with your current employer as you make your exit. Two weeks’ notice is standard, but if you’re in the middle of a project, consider giving even longer notice to make sure you see it through. (I gave five weeks’ notice when leaving my full-time gig.) There are also some instances when employers will ask you to leave right away when you give your notice, and that’s o.k. Just be sure you’ve done right by them. After all, it’s a small world, and your reputation is your brand. Your previous employer could end up becoming a client down the road.

Make your grand entrance!

You did it! Give yourself a round of applause. You’ve made the leap, and you’re now a full-time freelance product designer. From here on out, every impression you make is a reflection on your personal brand, so you’ll want to be sure you’re putting your best foot…and face…forward, every time. Naturally, you’ve updated your social profiles and website. Your next step is having a ready answer for one of the first questions every client will ask: How do you bill? Deciding how you want to bill for the UX and UI design work you do is an early perk of calling the shots. It’s important to have a solid plan, so that others aren’t calling those shots for you. I’ve explored many methods over my 10 years as a freelancer, and below I’ve listed some of the prototypical methods to help you decide. But don’t worry, you can keep experimenting to see what works best for you.

• By the project: This is also called “Fixed-cost billing.” The plus: you can determine the scope of a project and know exactly how much you’ll earn for completing it. The downside: If the project takes longer than you thought it would, even if it’s because of client changes, you can’t charge more. Pro tip: If you bill by the project, be as clear as you can in documenting what your quote includes, i.e., the scope of the project, number of iterations, etc. While most clients tend to be fair if the scope grows, or if rounds of changes become excessive, it’s good to know your bid, in writing, has details that have you covered in case a project grows out of control.
• By the hour, day, or week: People sometimes call this Time-and-Materials billing. This is essentially your “rate.” Decide what you’re worth and bill for your time. The plus? As the scope grows and changes, you’re sure to get compensated for your time. The downside? If you’re highly efficient and productive, you’ll end up doing more work and earning less. The plus side of that, though, is you can justify a higher rate, and you’ll have happy clients that will choose you over less productive competitors.

Remember, Uncle Sam will always join the party.

That first paycheck you get as a full-time freelancer is going to look amazing. But before you turn up, stop and check yourself. Because when you work for yourself, there’s a very important difference in the payments you get vs. the ones you got as an employee of someone else’s company. One word: taxes. So if that check looks substantial, it’s because nothing’s coming out of it anymore. You’re looking at your gross earnings. And come tax time, instead of getting a refund, you’ll owe money.

Record scratch.

I know right?! What’s left after you’ve paid your taxes is what you get to keep and spend — a.k.a. net earnings. So, every time a client pays you, get into the habit of setting aside a percentage that you don’t spend. Check your pay stub to see how much you’re paying in taxes right now. That’ll give you some idea about what to expect in the future. Cool? Ok, let’s keep the party going.

It’s your party. Do what you do best.
And for the business tasks, invite a pro.

Now that you’re responsible for your own financial future you’ll need to know when to delegate tasks that make more sense for someone else to do. Those taxes we talked about…and 401ks? Ew! As product designers we want to focus on creating quality user experiences for people. While you iterate on your craft, an accountant can handle drab tasks for you. Experienced accountants may charge as little as $100 per hour or as much as $400+ on the high end, but their utility pays for itself in spades. Here are just three of the ways an accountant can make your life easier.

1. Your accountant can help you understand tax forms. Do you know what a W-9 is? Chances are, every new client will ask you to complete one of these, so they can determine how or if taxes are withheld from the money they pay you. Your accountant can help you make sure you make the best choices for your situation and fill in the gaps when you have questions.
2. Your accountant can handle tax preparation. You’ll likely handle day-to-day considerations like invoicing. But when it comes to end of year accounting, and tax write-offs (that’s money you get back for business expenses) it can be helpful to have someone guide you so you don’t make any mistakes, at least while you learn the ropes.
3. Your accountant can teach you about financial tools. You’re probably used to having a human resources department handle contributions to an employer-sponsored 401K. But now that you’ve made the leap, your new human resources department is you. You’ll need to figure out what kinds of investments you’re comfortable with to secure your financial future. IRAs? Stocks? Cryptocurrency? There are many financial tools available, and your accountant can help you understand which ones are the best fit for you.

Look as good on paper as you do in person.

You may feel like a boss, and you may act like a boss. But the truth of being a full-time freelance product designer is, you’ve traded one boss for many. Not that that’s a bad thing. You’ve now got flexibility, autonomy, more money (if you do it right), and the list goes on. But as you march to the beat of your own drum, it’s also incumbent on you to step up. Clients expect craftsmanship at every touchpoint; here’s how to look put together the whole way through.

Be available. You may be a night owl, but clients like designers that keep a predictable schedule. They want to know that you’re available during normal business hours. Work or party all night if you want to, but make sure you respond to that 9 a.m. phone call or email and that you’re available for that 10:30 meeting.

Use a proposal. This is your official sales pitch — your way of communicating that you understand a project’s requirements. In addition, you’ll include information about you, your product design process, philosophies, and more. (Keep these latter items as a boilerplate part of your proposal template that you can easily carry from one proposal to the next). Crafting a thorough proposal can take time. But here’s a power tip…in lieu of drafting up a full proposal off the bat, you can send a brief email first to make sure everyone’s on the same page. Then tackle that killer proposal. Here are a couple resources that can help you create proposals like the pro you are:

• AIGA: The resources page has links to free proposal and contract templates.
• LegalZoom: Check out the document generation tool.

Have a contract. Your proposal wins! The next step is a contract. It’s less salesy and more factual than your proposal. The word “contract” sounds like a bit of a buzzkill. It’s not. A thoughtful contract includes not only the logistics of payment (we can all agree this will be pretty important to you), it also outlines what you will provide, what the client will get, and what happens when things don’t go as planned. It’s good for you and for the client, so an honest and business-minded client won’t think twice about signing on the dotted line. Here are a couple platforms I use to collect signatures.

• HelloSign: There’s a free plan, but paid ones start at $15.
• DocuSign: Try the free trial. After that plans start at $10.

Send an invoice. It’s a bit embarrassing to think about the invoices I sent when I first started freelancing. I did them by hand in something like Notepad. Cringe. Now I know better. So let me give you a tip: use a program dedicated to invoicing and billing, like the ones below. And after you submit your invoice expect to wait 30–90 days to receive payment.

• Freshbooks: Plans start at about $100/yr.
• Billings: Plans start at $5 per month.

Well, looks like all your paperwork’s in order. Now it’s time to really put yourself out there and make a splash on the full-time freelance product design scene.

Go ahead, mingle a little.

When you’re new to full-time freelance product design, projects and clients may only trickle in. But the reputation of outperformance you build — that’s your icebreaker. Once word gets around, your network of personal and professional connections will funnel a steady stream of referrals your way. Of course, before you can strike up a conversation, you need to find your clique. Here are a few of the places you’ll want to hit:

Job boards

There are endless job boards and lists to find work through. Apart from the ones you already know, like Dribbble and Behance, here are a few trendy places to find work.

• Who Is Hiring: Dedicated exclusively to tech-minded people, this site lets you search and apply for hundreds of thousands of tech jobs worldwide.
• We the Makers: Scroll through hundreds of freelance and full-time design positions worldwide, and sign up for email alerts.
• Smashing Magazine: There’s a job board exclusively for designers and developers, and you can also keep up on the latest issues, tips, news and thought leaders in the product design world. After all, what fun is a party without a little gossip?

Headhunters

Headhunting firms handle client procurement and can provide a vetted flow of work. They pair companies with designers, and working with them is generally free for you. Headhunting firms make money by tacking on a fee to your rate which they pass along to the hiring company. You’re in charge of the day-to-day discussion about each project you work on, but payment comes through the headhunting firm.

• Vitamin-T: Specializing in digital creative talent, this agency is a go-to for many companies seeking freelance designers. Their free salary guide is a good resource too.
• Robert Half: Local staffing experts and an app that instantly alerts you to opportunities make this agency a great resource for finding remote or on-site work.

Slack groups

Heads of product, hiring managers, and product designers are frequenting groups dedicated to UX and UI. Metropolitan areas usually have a tight-knit local group you can join. If not, there are also larger national groups with members in the thousands, and they’re free. So get out there and find your people.

• Slofie. Here’s the largest Slack group aggregator you’ll come across. Trust me, you’ll find your people.
• Designer Hangout: They’ve got over 20,000 members, and yes, a job board.

Take a party favor or two!

Here’s the takeaway: even though you’ve made the leap and are flying solo, you’re never really alone. You’ll be mingling with fellow designers and clients, hopefully you’ll find a trusted accountant — and of course, you’ve always got Yours Truly. Next up, we’ll talk about how to make that portfolio of yours the best it can be. Until then… cheers!

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