Out of work? Ready to freelance? Make a plan before you take the plunge

NEW YORK — With layoffs rising and job opportunities scarce, more people are turning to freelance work as a temporary option to make ends meet or as a springboard to a new career.

And while the prospect of chasing down jobs can be intimidating, some people, burned by corporate America, may also be motivated by the idea of being their own boss.

According to the U.S. Bureau of Labor Statistics, there were nearly 9 million self-employed workers in December. With the latest jobs data showing the total number of jobs lost since the recession began is nearly 3.6 million, the probability that the recently unemployed will do some temporary work is high.

The new workplace reality is that many companies are using temporary employees to keep costs down, especially health-care expenses.

Hustling to get temporary work is tough and competitive, so here are some things to keep in mind if you're thinking of going the freelance route:

Getting started: Before embarking on a freelance career, whether by choice or not, "take a close look at yourself and your work skills and figure out who would hire you and why — and be persuaded by your own argument," says Sara Horowitz, executive director of Freelancer's Union.

That will help you articulate your value and allow you to target potential employers where you might have the best luck finding work.

As with any job search, networking is key. Approach former employers or clients and see if they could use your services on a part-time basis. This will help you get started and also serve to increase your network to potentially bring in more jobs down the road.

Horowitz adds, "You should be specific in who you approach and don't just blast résumés and cover letters to everyone and anyone." That's not the most effective way.

Keep yourself covered: With medical costs soaring, health care typically is a huge expense for self-employed workers. And if you've been forced out of your job, having to provide your own coverage can be daunting.

If you are laid off, make sure you meet with your HR professional before you leave and understand your options. If getting onto a spouse's health plan isn't an option, you can continue your old employer's plan at your own expense under COBRA.

You may be eligible for group health insurance through organizations like the Freelancers Union, which offers health-insurance plans in 31 states. (No health insurance is offered there for Washington state residents, but life, dental and disability insurance are available.)

Also check out the Actors Fund to find local health-insurance information from a national directory of health-care options.

While it may be tempting to forgo medical coverage to save money when you are unemployed, experts say that is not a good idea. Any break in coverage means being subject to pre-existing conditions wait time once you're insured again, says Horowitz.

A better idea is to get the absolute cheapest plan just so you can have continuous coverage.

Embrace the tax man: A well-qualified accountant who understands freelancing issues is worth the investment for sole proprietors. The accountant can advise you on the type of deductions you can take as a freelancer for things such as a home office, paper and expenses relating to networking, just to name a few.

An accountant can also help you figure out your tax rate and advise you on the hefty checks you'll now be writing to the IRS.

Since your employer isn't withholding taxes for you anymore, you will have to pay estimated taxes four times a year, as well as pick up the Social Security contribution.

Think long term: For workers who are less enthusiastic about the idea of launching a freelance career, it might be helpful to approach it as simply an extension of a traditional job search.

If the recession is preventing a potential employer from hiring full-time help, offering to work on a project-by-project basis might let you get a foot in the door.

Do a great job and you might be the one they do hire when the economy turns around.