Do You Want To Be a Freelancer?
Being a Solopreneur in Project Management
Hey, fellow Leader 🚀,
I am Artur, and welcome to my weekly newsletter. I am focusing on topics like Project Management, Innovation, Leadership, and a bit of Entrepreneurship. I am always open to suggestions for new topics. Feel free to reach out to me and share my newsletter if it helps you in any way.
Some weeks back, I had the pleasure of discussing a collaboration between newsletters with
. My goal was to write an article about the world of freelancing in leadership positions. An interesting aspect of collaborations is the need to adapt to the medium for which we are writing. has a different format from the SoW. However, it is packed with value in a shorter format. This article is to revisit the same topic with an extended version of the one available below.
Disclaimer: I am not a solopreneur myself, but I have worked extensively with freelancers and consultants on my various projects, and this article will encompass some of my conversations and findings. As in all good stories, one such conversation happened on a sunny terrace with a beer and a work colleague who is a successful freelancer (one of the best I have ever worked with). During our conversation, I argued that it is very challenging for a PM to become a freelancer because we are in the business of building trust with all stakeholders: both developer teams and C-level executives. While C-level executives are the ones who hire high-profile PM freelancers (so some trust will inherently be there), these PMs need to build a new bridge of trust with the development teams, and this can be tricky. So, let’s go through some important arguments for and against a Project Manager becoming a freelancer.
I also invite you to add your perspectives in the comments below so we can have a conversation about this topic. I would be very interested to hear what you have to say and to exchange notes.
Building 360-Degree Trust
As I stated above, for me, the first issue with freelance work in any leadership position is the trust-building aspect. When launching a new project, if the PM has the ability to create the project team, the trust and authority will come naturally (unless the PM makes crude communication mistakes) and prove the worth to the other company stakeholders. However, when the PM arrives at an established team, he or she needs to prove worth for the entirety of the project ecosystem.
Building trust requires direct and quick problem understanding and orchestrating a strategy with key stakeholders. Ok, this is corporate talk for questioning the goals of the project, what it entails, what the margins for success are, and trying some ideas with key decision-makers and the people who will work hands-on with the deliverables. Communication and taking the initiative are paramount for showing the PM is grasping the problem at hand and is working actively with the rest of the company to address the project objectives.
However, Development Teams might not be impressed by an outsider and even feel threatened. A change in the leadership structure creates waves across the layers below, and the new PM should create a bridge of trust: one-on-one introductory calls to share visions and ideas about the coming months, having a collaborative mindset for finding solutions together with the team, etc. This is where the in-house PM takes the advantage because there is no better trust than the one built from trials of fire from previous projects. The freelance PM will be there for one project, potentially two projects, and leave for another challenge.
Trust is built through actions more than words. Writing about trust alone would require a dedicated article. I will just leave some high-level tips for improving trust through actions:
Preparation: Not all meetings need a PowerPoint presentation, but if you prepare them in the first few months, you will build an image of diligence and preparedness. Then, the PM will have a portfolio of decks for any situation being discussed. It’s also a great way to work on understanding each project's challenges.
Punctuality: If the meeting is on-premises, it’s common to feel lost and be unable to find the meeting room. The PM should leave their desk 5 minutes earlier and follow someone who is familiar with the premises and meeting room locations. For online meetings, being 2 minutes late can feel like an eternity, so it’s better to arrive 2 minutes before the meeting starts.
Informal Gatherings: Going out for lunch, for drinks after work, or engaging in other activities that allow informal conversations with project stakeholders (team included) can be beneficial. Be mindful that there are people who actively avoid team or social gatherings unless paid for by the company. In these less collaborative cases, we shouldn’t judge but rather try to find ways to have informal conversations about the project and potential issues, making sure people feel heard.
Financial Independence With a Cost
One of the biggest advantages of becoming a freelancer in a leadership position is the rate cards for the services rendered. Of course, these rate cards change depending on the geography, but overall, the difference is astonishing when compared with in-house positions. However, once the project is completed, or near completion, the PM could see the contract terminated. It’s expected for freelancers to have moments where there is no allocation on projects, however, the rate cards are high to sponsor for the non-activity periods.
Another alternative is to be allocated to multiple projects with different sizes or contribution types. Let’s imagine a PM is allocated to an 8-month project from initiation to delivery while being allocated to other smaller projects (1 or 2 months) with some contribution or follow-up. In these cases, the hours of work per week can be significantly higher than an in-house PM who only focuses on in-house projects. Sometimes, I find PM complaining about working 10-12h per day, where in these cases, it is preferable to become a freelancer and be paid higher rates.
If someone is working the typical 9-5 schedule and wants to become a freelancer, I typically remind this small characteristic of having multiple ongoing projects, and the working hours start to go through the roof.
Work-life balance is an issue. I am not very familiar with the reality of the US, but in Europe, it is easy to get an international project, and with it, the travels! I am so fed up with Paris! I have travelled for work to Paris too many times, I got fed up with the Eiffel Tower. French cuisine is not that great, sorry, I am Portuguese. Another colleague told me he is one of the top 5% flyers in one specific airline. Every time I have a call with him, he is in a different city in Europe. The more successful you become, the more travel and work hours you will need to endure. This comes with a cost of personal life: Gym hours (or lack of), seeing your kids during the week, the ability to schedule a drink with someone since work might cancel plans on short notice, so much stuff.
Once, I met this guy at the beginning of my professional life. He was successful, with a good paycheck, but his personal life was boring as hell: Mid-40s and single, almost no friends, going home and drinking whisky alone. He had no conversation beyond work topics, no hobbies, and a very sad life. Of course, I am giving an extreme example, but striking a balance between professional and personal life is one of the most challenging aspects if you become a successful freelancer.
The Art of Self-Promotion and Networking
This is by far the characteristic that pops up from my freelancer colleagues. They are in a constant mode of self-promotion. In a conversation with a freelancer, I mistook him to be an internal employee (some companies provide corporate email addresses to freelancers even for small timed projects), and when I touched on the topic of his expertise, the conversation shifted immediately for him to take over some parts of the project. When a freelancer sees an opportunity to charge more hours of work, they go at it without apologizing and no small talk. I would argue that even internal employees should have this mindset of creating value in an active and hands-on approach.
Another interesting characteristic of a successful freelancer is the network of contacts from different companies. Word-of-mouth is a very powerful promotion tactic that can make wonders in a freelance world. Once in a while, the project needs a very specific set of skills (no, it’s not a spy or Tom Cruise blasting things up), so it’s very common to ask around and get in touch with a new consultant (freelancer) for a specific task. Eventually, that task opened new avenues for collaboration in other similar projects, and we noticed we had a consultant working for us for a certain number of days per month in a row. Then, in a random conversation with someone, that consultant pops up in the conversation, and contacts are shared.
However, success can be very hard to achieve. I have witnessed freelancers who never managed to transpire more than a few big projects here and there and got stuck with the same clients for a limited number of hours. It is easy to talk about success stories, but there are cases where freelancers start to ask for more permanent positions inside the company. When this happens, compensation and remote or hybrid work arrangements are the top priorities for negotiation. Most companies accept total remote positions for freelancers, but once they become internal staff, the conditions may change drastically. Some people have a hard time accepting this transition.
What’s On The “Project” Menu?
The only point for me (besides compensation) that is really interesting about a freelance position is the variety and the ability to choose projects. Let’s face it, as in-house PMs, we are often stuck with the projects the company is currently executing. I consider myself very lucky to have been part of some amazing projects over the years, but I understand I might have been an exception for an in-house PM.
My freelance colleagues are constantly working on interesting projects that require a special skill set (again, this is not an article about espionage!). Also, as an in-house PM, I have had to work on some very boring projects that had little criticality to management. This means the objectives linked to those projects are rarely aligned with other teams’ or stakeholders’ priorities. When a company assigns a freelance PM to a project, that project is special in some shape or form. Otherwise, an in-house PM would likely take it. These projects tend to have very close management attention, so there are fewer concerns about mismatched priorities within the organization.
As I said before, I was lucky to be part of very interesting projects, and some of them needed special skill sets for procurement (both time & material or fixed-price contracts), or special software requirements not commonly found in the industry. These kinds of projects are the ones that generally appear in company-wide presentations as strategic and high-priority, and freelance contracts tend to gravitate towards these kinds of projects.
Setting Up a Freelance Gig
Let’s start by separating “fake” freelancers from true freelancers. I consider “fake” freelancers to be those who, unfortunately, have a full-time position in a company but, due to internal policies favoring low-quality labor contracts, the company forces employees into more flexible work contracts.
A true freelancer is someone who works on a bank of hours and has multiple clients or projects. So, a common question is how to set up a freelance gig, and there are two main starting points:
Those who naturally were hustling since university because they wanted to be freelancers;
And those who, after decades of experience, built a set of contacts which made working in a freelance style a possibility.
The commonality is that networking and word-of-mouth seem to be the number one source for successful freelancers.
What about freelancing job platforms?
Those are like having a profile on Tinder (from a straight man’s experience). There is a sea of professionals on those platforms offering their services. Differentiating yourself from the pack is immensely difficult and is a skill in itself. This means that getting a match can be extremely difficult, and honestly, you might become more successful using other methods to invite someone for a glass of wine and talk business.
How much should I charge?
People who have managed freelancers have a distinct advantage in addressing this question because they handle rates from different professionals across multiple geographic locations. They get to know the market value for a certain type of skill set very easily since they inherently have access to benchmark values. For someone who is starting without this visibility, I would recommend going to LinkedIn and checking job postings with rates on them to get an idea of how much you would be comfortable selling your skill sets for. Note that proposing high values without any sort of referral will be a tough sell.
Legalities and Taxes
If you live in a large country (US, Australia, India, etc.), you primarily need to be aware of the different tax models available for freelance work in your location, which typically comes down to creating a company (e.g., a Limited Liability Company - LLC).
Because this varies from country to country, I would strongly recommend talking with a friend who is an accountant. They often appreciate good food or good coffee, so invite them to an interesting event and start asking questions about how to set up an LLC in your country.
The same applies to European countries, however, with a twist. Each country has a different set of tax laws, and some countries are by far more competitive (e.g., Netherlands, Ireland) than others (e.g., Spain, Portugal, France). However, setting up an LLC in a country outside where you typically live could create problems with Social Security laws. So, please ask an accountant friend first, try to consult with other freelancers about how they set up their company to get a better grasp of your situation, and then check with a professional accountant regarding these specific situations. If you live in Europe and create an LLC, it can be beneficial regarding certain types of VATs. So, I would strongly recommend you check with a professional accountant on how to navigate these waters.
That’s it. If you find this post useful, please share it with your friends or colleagues who might be interested in this topic. If you would like to see a different angle, suggest it in the comments or send me a message.
Cheers,
Artur