Pros and Cons of Changing From Employee to Freelance

[Dave Perry]

Hello everyone. I have worked for the same production company for the last 9 years. I've grown quite a bit from being an assistant editor and P.A. to my current positions of senior editor and A.C. I love the job but want to establish my own presence. I've been doing a little bit of outside work and recently have had some success with a short film.

My boss is aware of it and I don't work "behind his back" so to speak. However, I'm starting to consider the idea of changing my terms of employment. I know many editors and cinematographers that work together under the same roof but are also freelancers rather than employees of the group.

What are the pros and cons of continuing working for the same outfit in a similar role but as a contractor instead of employee? How should I prepare for the shift and what should I look out for? My employer and I spoke about this the other day but no decision or plans were made. I have no benefits at this job currently so losing them is not an issue.

Thanks.

[Allan Black]

Dave, sorry to be blunt but I'd be surprised if your employer isn't considering replacing you.

But that's how I got started, resigning as a studio manager then working for the same company on contract for an hourly rate.
You certainly work longer hours and harder, but you'll never have a chance of making real money fully employed by some else.

And that's how you measure your hard work, and you build everything on that. But look around for a clever accountant before you do anything.
I had one, here you can (or could) buy a bankrupt shelf company and pick up their tax losses.

So check very carefully before you jump. I've sold my company now and am semi retired doing consultancy work,
but looking around my compatriots, competition, adversaries and the industry, eventually you'll regret it if you don't. Good luck :)

Cheers.

[Dave Perry]

Originally Posted by Allan Black

Dave, sorry to be blunt but I'd be surprised if your employer isn't considering replacing you.

Bluntness appreciated Allan.

[Don Bloom]

Back in the 70s working as a still photographer, I worked at several studios but I was never a W2 employee. I was even then a 1099 independent contractor working under contract. I spent 2 years at 1 studio doing catalouge work and had all of the flexiblity I could want as long as I got the work done on time. Of course I also had NONE of the benefits. No health insurance, no real protection of the employment laws (remember back then, an IC or 1099'er were few and far between) BUT for me the pay WAS better than being an employee and I had more control of my hours. I could and did work for 2 studios at once. One wa the big box catalouge stuff and the other was the small wedding, portrait place plus I could still do my freelance news, sports and PR stuff.
There is a certain mindset needed to freelance like that, working for a company you currently are employed by as there may be some resentment from other employees and possible even the boss regardless of how open he may be to the situation right now. another thing to consider is the money. As a freelancer you would think you'd make more per hour but not have any benefits so if you need to have insurance then stick with what you got. If you don't then you need to work out the numbers with the boss and everything must be in writing. IOW get a contract from the boss because as a freelance worker, you're a temp and could get booted at any time.
Just a few things to think about.

[David W. Jones]

Bottom line... Do you have freelance clients and jobs lined up which exceeds the steady pay you get now?

[Dave Perry]

Originally Posted by Don Bloom

...you're a temp and could get booted at any time.
Just a few things to think about.

Thanks for the insight Don. I certainly am not under the impression that I'm indispensable, but here's a little background on my situation.

On a day-to-day basis, there are just the two of us. Maybe 25-50% of the time it's just me in the office editing while my employer is out of town shooting. We are a small production house but do fantastic work and are both award winning cinematographers (me having recently received my first award). About a year ago I started stepping out a little bit, making sure I did not enter into a conflicting gig, but it's hard in a small town. The work I do outside of my day job affords me the luxury of calling my own shots (pun intended) and taking risks. As i've let my employer see the work I'm doing he has been impressed and as a result gives me more freedom, creative input, and responsibilities at work. So it's working out. However, the talk we had the other day started with him asking me "Where do you see yourself in 5 years?" To be honest, I'm rather nervous about that. I have an idea of where I want to be in 5 years but not sure how to get there. One thing I know is that I'm not turning back on the path I've started. I think I've started something I can't turn back, nor do I want to.

I'm 51 years old and it's time to cut bait or fish. I love DVInfo.net and it's my go to source for professional video and film info and experience online so I'm hoping to get some good info here :)

Thanks!

[Dave Perry]

Originally Posted by David W. Jones

Bottom line... Do you have freelance clients and jobs lined up which exceeds the steady pay you get now?

No I don't and I do have kids, car payment, mortgage and I'm single raising those kids. One thought I had was not even considering changing my status until I have two months of pay saved up in savings.

[Shaun Roemich]

Hi Dave... I don't know who your employer is (you may have a FANTASTIC one...) but I know a LOT of employers Google their employees often, for right or wrong. DVInfo is HIGHLY indexed by Google and this post is VERY likely to come up.

Frankly, from an employer standpoint, the question they would ask is "Is it in MY best interest to allow this person who is a 'known commodity' to me now to change their terms of employment? They have indicated their willingness to leave my employ - perhaps I should start looking for someone else who WANTS to work here"

Being blunt and not advocating the position, nor am I demonizing it.

Just be aware there is a CHANCE you may have made that decision already for the employer by posting on a public forum.

And to answer your question, I've been a paid employee on a handful of occasions since starting as a videographer and much prefer freelance or external contractor status and have successfully been able to make that transition and keep the former employer as a client due to much-needed financial flexibility on the employer side.

YMMV.

Good luck!

[Don Bloom]

+1 with Shaun. Perhaps you can work some sort of deal with your current employer to work on a full-time freelance basis for him with the understanding that if and wehn you get your own work that you can go and do your thing. It's tricky but it can be done with some creative out of box thinking.
While I have over the years had long trm contracts with certain studios (particularly still studios back in the days of 8X10 view cameras and Nikon F's as the standard) I have never been a W2 employee so perhaps I never knew what I was missing but I do know there are a lot of benefits to being that W2 guy! With kids and being a single parent, I think knowing there is a weekly check is a big draw. I was lucky, my wife had a very nice weekly check in the medical field so I could go and play even if it meant I didn't get a check for weeks (sometimes longer). Lots to think about and I think 2 months is a bit short. My accountants over the years have always told me to make sure I have at least 3 months and even up to 6 in the bank for the just in case times.
Like I said, lots for you to think about.
Good luck, I know that itch!

[Paul R Johnson]

I'm sitting here with a big gap in the diary as two planned jobs that were biggies just fell through, and it leave two days next month and maybe one this month. First time I've had a gap this big, and nothing has appeared to fill it at the moment. The credit card statement just arrived containing things I'd rather expected the next job would pay for, and for the next couple of months things are gloomy. The first time in 9 years of working for myself. I lost one old client when he told me I'm too expensive so he's using my son who's 21 and works with me on lots of jobs! Self-employment can be great, but it's also pretty scary sometimes!

[David Barnett]

Originally Posted by David W. Jones

Bottom line... Do you have freelance clients and jobs lined up which exceeds the steady pay you get now?

Bottom line myb, but I don't think that's the ONLY figure! Alot of times people change jobs (rightly or wrongly) for other factors: closer to home, quality of life, and a big one is smaller/better/upstart company with more potential down the line. If the OP feels he can match or exceed his current pay in 3 years, well then it may be worth it, regardless of what he gets his first year or two, (maybe).

Anyway, I think one thing no ones mentioned is the fluctuations of workloads, and with that pay. The saying "As long as I get paid on Friday" really holds some merit as a staffer. As a freelancer, you're not getting paid on Friday, or every other Friday. You get paid whenever. If your line of work fluctuates during the seasons (ie busy summers, slow winters), your pay reflects that. Another factor is just because you do a ton of work, doesn't mean you get it immediately. Clients all have their own pay schedules (1st & 15th, end of the month etc). So tomorrow you could begin a ton of work, but possibly not see the check until early April. Things like that, which you're probably already aware.

It sounds like your current company is ok with this transition, I just hope your clear & not putting a spin on it. Maybe your boss is more looking for what can be done to keep you on, whereas your looking more for what can be done for you to leave. Once you go, work your currently doing could go elsewhere, or they may hire someone new & farm less work to you. Again, you seem in a good position, and confident you & your boss both agree with the terms, I'd just recommend you be honest & open, and ask his thoughts on how he'll decide to go forward. I would also probably walk into the discussion with the door open to staying at the company. When I was younger & working a very entry level video job at a company I left to take on a Customer Service job that was FT/Benefits/Vacation etc.. I told my boss & gave my 2 weeks notice & he said to me "Well what are you telling me, you want more money or want to leave?" I wasn't expecting it, and in hindsight I probably should have asked to work something out. But on the other hand I didn't want to constantly have to negotiate for things like vacation, benefits, raises etc.. He was a good boss, and good guy, but the work was just VHS duplications, shipping etc type stuff and I can understand there wasn't much need to pay me much more than I was getting. I left, and left on good terms, but sometimes I wish I did work it out & stay a little longer.

[David Barnett]

Originally Posted by Paul R Johnson

I'm sitting here with a big gap in the diary as two planned jobs that were biggies just fell through, and it leave two days next month and maybe one this month. First time I've had a gap this big, and nothing has appeared to fill it at the moment. The credit card statement just arrived containing things I'd rather expected the next job would pay for, and for the next couple of months things are gloomy. The first time in 9 years of working for myself. I lost one old client when he told me I'm too expensive so he's using my son who's 21 and works with me on lots of jobs! Self-employment can be great, but it's also pretty scary sometimes!

Yeah, the cancellations can be brutal. I do some video depositions on the side of my PT job & sometimes have up to 3 in a row cancel on me. Sucks too because I depend on it, and sometimes (though rarely) turn down other deps or my PT job schedule for it. Going from $$ to 0 just like that.

[David W. Jones]

Well you know the waters in your neck of the woods better that we do. In my area things are brutal! The largest production/post house around closed it's doors because of the economy, so all of their employees are now competitors. TV stations restructuring have laid off all kinds of folks who are willing to undercut my work, along with all the graduates from the local university's TV & Film program who will work for free just so they can put together a reel. Not to mention the local TV stations which will produce a clients TV commercials for free with the air buy.

If it were me, I would sure try to round up a few regular clients before I decided to make the move.

Good Luck!

Dave

[Mike Watson]

If you were a great DP and a great editor, you will still have almost none of the skills you need to go out on your own. You need to be a great finder of business, a great salesman, a decent accountant (even if you have a GREAT accountant, you still need to take care of the basics plus keep an eye on your guy), do some light legal (contracts and the like). I was none of those things when I set out, and it showed. I would say that most of the successful guys in this business (and this thread) were in the same shoes, and they all learned to overcome it - but 10x that many have failed out.

My point is this - there are guys in this world who were meant to be great DPs and editors and work for somebody else who will manage all the bullshit. And there are guys in this world meant to learn all the bullshit and persevere. Nothing wrong with being either one of those guys - just know which kind you are.

Also, if I were going to quit my day job, I would have a minimum of a year's living expenses in liquid assets, and plan on blowing through all of it.

[Mark Koha]

I've known nothing but the freelance world since leaving college. I've been considering getting out of it but I don't know how well I would adjust to the regular world. Right now my main gig is traveling with an MLB team all summer. It's hard to turn away from flying on chartered planes and staying in 4 and 5 star hotels for free but the off season is a pain to deal with. There's a number of guys I work with regularly who also carrying part time jobs at UPS where they go in at something like 2 in the morning because they have families and need the benefits. I'll say that you need to have a kind of rough and ready attitude of being able to work any job on any amount of notice, but nothing will make you a fighter quite like having your well being depend on it.