I’ve been self-employed for most of my career. Sometimes I talk to other people who are interested in leaving a full-time job to do some kind of contracting or service business. By far, the most common newbie mistake that we all seem to make is in pricing ourselves.
Take this useful blog post that breaks down employee income vs freelancer income in the US. It estimates that you need $140k revenue as a freelancer in the US to have the equivalent of $100k employee compensation. I remember finding calculations like that really useful when I first started a business. However, some people will look at the result and think, “Gee, I have to make 1.4x as much if I’m self employed. Can I really do that?”
No, no, no. That thinking is backwards.