The Rise of the Entrepreneurial Freelancers

In this week’s blog I’d like to explore Freelancing and Entrepreneurship.

What is an Entrepreneur?

An entrepreneur is a person who organizes and operates a business or businesses to fill a gap they find in the market. They tend to take on financial risks in order to do so.

What is a Freelancer?

A freelancer is a person who is self-employed and who is not committed to a particular employer long-term.

A Freelancer is not employed by a company instead they need to find work through a variety of sources. 

These sources include:

On Job Boards: Websites such as LinkedIn.com, FlexJobs, Fiverr, Cloudpeeps, Indeed and SolidGigs are used by Freelancers to find work.

Social Media Profile: Social media can be a Freelancer’s best friend. Sites such as Facebook, LinkedIn, Tumblr and Twitter are great for broadcasting your talents.

Your Personal Website: A personal website is important for standing out by having a portfolio of your past work. Managing this portfolio is important for landing more work.

Professional Network: Building a Professional Network is important and this can be done by contacting past clients, joining groups online, seeking role models, look for opportunities to help and attending local networking events.

Freelancers come from different backgrounds including:

  • Graphic Designers
  • Marketing Consultants
  • PR Consultants
  • Customer Service Support Officers
  • Illustrators
  • Transcribers
  • Teachers
  • Sales and Marketing Professionals
  • Mobile App. Developers
  • Freelance Writers and Copywriters
  • Lawyers
  • Human Resource Managers
  • Software Developers

Etc…

What are the Pros and Cons of Being a Freelancer?

Pros:

  • Control your workload: As a Freelancer you are free to manage your own workload.
  • Less likely to get sick: This goes hand-in-hand with managing your own workload. 
  • Get as many breaks as you want: Being your own boss means taking breaks whenever you want.
  • Be your own boss: Not having a boss to worry about is great.
  • Avoid a long commute: Many Freelancers work from a home office or out of somewhere local, so they can avoid a long commute.
  • Independence: When you’re working for yourself you have the autonomy to control your work/life balance.
  • Flexibility: Since you are your own boss you can pick your own work hours.

Cons:

  • Lack of Benefits: Not being on a company’s payroll means that you need to provide your own benefits.
  • Sporadic Work: The amount of work available to a Freelancer can be sporadic at times.
  • Ultimate Responsibility: Being your own boss means that you are responsible for managing yourself.
  • Cash flow Issues: There may be times of the year where cash flow is an issue.
  • Isolation
  • Taxes: When you work for an employer your taxes are deducted from your pay for you by payroll. However, you need to handle your own payroll.

The changing relationship between employers and employees

Since Freelancers are free agents and not permanent employees companies don’t have to pay them benefits. When they are hired for projects companies spend less money. 

Despite the challenges facing freelancers such as inconsistent income and lack of benefits more workers are turning toward it. Some workers are abandoning the traditional W-2 job in favor of a more flexible schedule and there are others that are holding on to their secure permanent W-2 jobs and pursuing freelancing as a side job partly due to stagnant salaries and lackluster benefits.

There’s an assumption that employees from the millennial generation (born 1981-1996) and younger are “job hoppers”. They tend to quit jobs more often than previous generations and are always looking out for the next step to take in their careers instead of staying with the same company and working their way up like previous generations did.

There are many reasons why employees change jobs and/or start freelancing.

Including:

  • Lack of Trust
  • Lack of Independence
  • Lack of Respect
  • Underemployment
  • Bored at Work
  • Bad Management
  • Burned Out
  • Toxic Workplace
  • Lack of Communication
  • Low Pay

The growing number of Freelancers is getting a lot of attention from companies.

It’s estimated that almost 60 million Americans are now Freelancers as of 2019 and this number grows by 8% every year despite an improving economy. According to the balance small business http://www.thebalancesmb.com Freelancers will make up more than 50% of the American workforce by 2027. 

Instead of a company being an employer it can be seen as a client instead and you’re not an employee instead you can be a consultant.

Is it possible to be both a Freelancer and an Entrepreneur?

When we think of entrepreneurs as the founders of new start-ups, veteran business owners or franchise owners. However, there are a growing number of entrepreneurs that are becoming successful as Freelancers. Many increasingly function as micro-entrepreneurs.

What is Micro-entrepreneurship?

The definition of a micro-enterprise is a business with fewer than 9 employees including the owner and an income of $250,000 or less. 

This also includes people who monetize their assets and knowledge. Whether you’re are using your house as an AirBNB rental or you’re a freelancer. 

The micro-entrepreneur has the ability to pay attention to trends in the economy and in technology, so this skill is important to a freelancer.

Skills both hard and soft.

The skills needed to be a successful Freelancer include hard skills such as technical skills or other competencies that companies pay for. Hard skills tend to be certifiable through degrees or certificates of qualification depending on the field you’re in.

Along with having marketable hard skills, it’s important to have soft skills.

Soft skills include:

  • Time Management: Time management skills are essential for success. They include prioritizing, organization, delegation and problem solving.
  • Portfolio Management: Relating to the succession of short-term assignments and part-time work done by a Freelancer.
  • Being Adaptable: Being able to quickly adapt to changing technologies and changing economy.
  • Networking: A business activity that involves the formation of business relationships that help you with sharing information and help with business opportunities.
  • Being Persuasive: Being genuine and honest is the key to a client trusting you.
  • Being Creative and Innovative: Creativity and Innovation go hand-in-hand
  • Self Assessment and Self-Insight: Don’t be afraid to self-critique and see where your strong points are and where you need improvement.

My experience

After graduating from college I had trouble finding a job in my chosen field. This was after 2005 when the job market was not too good for recent college graduates.

A year went by and I was still working at a supermarket in the produce department. Then finally found a job testing soil and concrete samples for an engineering company. The work was only part time and had to find other ways to make ends meet. I made ends meet by working a combination of two part time jobs at once including my soil testing job with a temp agency job or I worked as a substitute teacher, also.

In 2007 I finally got a job with a Surveying and Mapping Company, however there was a problem the position was for an Independent Contractor not a full-time employee. Instead of using a W-2 form to report wages a 1099-MISC. form was used instead.

This mapping job was in the field I’ve always wanted to work in, so for more than two years I made it work. I was required by the IRS to make estimated tax payments every quarter and I learned along the way that there were tax write offs I qualified for because I was an independent contractor.

Including:

  • Cost of gas and mileage
  • Car expenses
  • Office equipment expenditures
  • Health insurance premiums
  • Cell phone
  • Continuing education

The business I was working for was part of the real estate and construction industries and these two sectors experienced a major downturn after the 2008 Stock Market crash.

Around the time when the downturn in the economy was happening my mental health started to suffer. Due to constantly worrying about what the economy was going to do next and the stress of trying to keep an apartment I couldn’t afford I started experiencing intense anxiety. It was so bad that the quality of my work suffered and I was terminated.

I learned the hard way that since I was a 1099 contractor that I didn’t qualify for unemployment insurance. I wasn’t trained for anything else and couldn’t find a job. I was unprepared for what was going to happen next and I was facing financial ruin along with a nervous breakdown.

This is a very important lesson if you want or need to Freelance, because it’s important to know what you’re doing and keep developing new skills along the way in case the economy or technology changes.

Have you ever Freelanced?

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