From Gene Marks on the Huffington Post – “There was once a time when it was just me. I was providing computer services. I was working a lot of hours. But I wasn’t making any money at it. If I stayed on that path I’d fail. Today, I’m making money. Why? Because I’m supervising 10 people who are providing computer services for me. I’m making money off of them.
Want to quit your job and be a freelancer? Be a one-person shop? I have bad news for you and you need to hear it now, before it’s too late. You won’t be able to make a lot of money if you’re running a one person business. Maybe, just maybe you might make a living. But that is all. Why?
First, let’s do the math. There are only so many hours in a week. If you’re a one-man (or woman, of course) freelancer or business owner and let’s say you charge even as much as $100/hour for the work you might think… wow… in a 50 hour week I can make $5,000! Which means $20,000 per month or $240,000 per year. Ka-Ching! But this is not reality.
For starters, there’s no way you’ll be chargeable for 50 hours per week. Because you are alone you will need to spend time doing paperwork, administrative tasks and, most importantly, looking for more work when the current job runs out (and they always run out). You will easily spend half of your time doing that. Which means that, you may be able to make about $120,000 per year, which isn’t bad. Except you’ll have expenses, like rent and car and repairs and supplies and computers and whatever else. Your expenses will probably run a few thousand a month so let’s assume after expenses you’re netting about $80,000. Then there’s taxes, and not just Federal. There will be state, local, real estate, schools, tolls, export, import, duties and those hard to understand fees on your cable bill. So lop about 30 percent off that $80K and you’re down to a net living of $56,000. Those are the hard, hard numbers. Still want to do this?
Well, if you do, then you can’t do it alone. You will need people….”
Read the full story at The Myth of Being a Successful Freelancer