Some of these workers work full-time as freelancers, while others still hold down a regular 9-5 job but do side hustles during their spare time. People are talking about a new type of labor market, the Gig Economy, because of this proliferation of part-time work and freelancers.
You’ll need to know the advantages and disadvantages if you want to join the gig economy. You will have to adjust your lifestyle and learn some basic accounting.
What is Freelancing?
Freelancers are self-employed people who offer services to clients. The sharing economy platforms such as TaskRabbit Mechanical Turk or Upwork are often used to offer these services, but not always. Individuals can provide their services directly to customers, without the need for third-party resources who often take a percentage of the payment.
A freelancer can provide almost any type of service that a business needs. Some of the more common freelance opportunities are:
- Accounting/Bookkeeping
- Graphic Design
- Marketers
- Project Management
- Social Media Manager
- Teaching/Tutoring
- Virtual Assistant
- Web Design/Development
- Writing/Editing
Some freelancers specialize in general areas, while others are more focused on specific industries. For example, real estate assistants or copywriters with pay-per click (PPC), for instance.
The freelance income you earn depends on your skills, experience and market. Freelancers can earn between $10 and $75 per hour. pays more for skills that require more education and experience, like accounting or website coding.
Freelancing: Its Benefits
Freelancing is a great way to start working for yourself, and often in the comfort of your home. Freelance work has many advantages.
You can set your own hours
Freelancing allows for flexibility. Freelancing allows you to work at your own pace.
Note:
As the saying goes, time is money. You can make money by using the time you save not having to commute.
Work where you want
Freelancing can be a great option for anyone who wants to work wherever they like. You can work and travel simultaneously if you love to travel.
Independent Contractor
Freelancers are independent contractors, not employees, even though clients may (and often do) specify the type of work they need done. You would be able to decide how the work was completed. You may lose a job if the client doesn’t like your final product.
Pay What You Are Worth
You can set your own prices for freelance work, and they are often higher than the wages you would earn as an employee. Charge enough to cover overheads and compensate you fairly for how long it takes you to complete the work.
You can start for a low price
You probably already own the software or equipment you need to perform a service. If you’re a newbie, then your startup costs will be high unless you need expensive equipment, training and experience.
There is a High Demand
The freelance market is highly competitive. However, it is also growing in demand for reliable, quality freelancers. Today, many businesses rely on a team made up of freelancers to do the work. This trend is increasing as businesses are paying more for freelancers, but they cost less than hiring employees, because they do not have to pay payroll fees and benefits.
Choose your clients carefully
As you grow, you can choose to avoid difficult clients. You can tell clients that you don’t want to work with them anymore.
Taxes could be lower than you think
The IRS has a different approach to employees and independent contractors . Independent contractors are able to deduct work-related expenses that employees cannot. This is due to changes in tax laws. IRS Schedule C allows you to deduct your business expenses. This will reduce your taxable income.
Note:
You might prefer to focus on earning a living than worrying about taxes. Many freelancers seek the help of accountants and tax professionals.
Work-Life Balance
You feel happier and more balanced when you have the freedom to choose what and when you want to do, what you get paid, and with whom you work.
The disadvantages of freelancing
It’s not for everyone. Here are some of the disadvantages of working on your own.
You can schedule your clients’ appointments too
You can choose your own schedule for the most part. However, if you have a client who can only meet you on Tuesday at dawn, you will need to get up early. It is likely that you will also need to meet deadlines.
You may be limited to working in the evenings and late afternoons if you only provide services in certain time zones. Or you may also have clients who work at different times. You will need to manage your time very well.
The work isn’t always consistent
It’s especially true if you offer one-off services, such as creating a product. The client gets the product and you’re done. You have to look for a new customer to create a second product and get paid.
Note:
You may have to start by doing a lot self-marketing to attract clients. You might get 100 “no thanks” before you finally get a “yes.”
Experienced freelancers will avoid this problem by identifying clients who require a large volume of work consistently and delivering results to the point where they become vendors or service providers. For example, a freelance writer might have a client who requires articles twice a week.
It is possible to be successful over night
It can take some time to acquire enough clients for you and your family. Many freelancers also experience a fluctuation in their work. Plan for the lean periods and work hard when there is plenty of work. You may need to break in at lower prices, but you should find clients who are willing to pay more for quality.
It can be difficult to manage multiple clients and projects.
Some people enjoy the variety that comes with working on multiple projects simultaneously, but others may find it hard to stay on top of deadlines. To produce quality work and deliver it on time, you need to pace yourself.
Note:
If you work for several clients, it is essential to find a way to manage your time. You may end up working more than you expected.
You are in charge of all aspects of your freelance career
Freelancing includes invoicing, bookkeeping and marketing. You need to have more than the ability of doing the work. You will need to do these tasks on top of your regular service unless you have the resources to hire someone to help you.
You will be responsible for paying your own benefits
You will lose out on benefits like healthcare and retirement plans sponsored by your employer. You may be able to join a professional association that offers group health insurance rates based on your work.
Self-Employment tax is a requirement.
The flip side to paying less taxes is that you’ll have to pay both halves. You pay half of your Medicare and Social Security tax when you work for another person, but if you freelancing, you will be your own employer, meaning you will have to pay the other half. Self-employment tax is what it’s commonly called.
How to Start as a Freelancer
Finding your first client can be done by visiting a freelance website or using your existing network to find a client. You can find freelance work on sites like Freelancer.com and Upwork. You might not get paid as much as you would like, but it is a good way to spread your name and get referrals and testimonials.
Before you start, you will need to consider a few factors.
Note:
Be cautious of clients on large freelance sites. Be sure to follow the rules on the site when communicating with clients and receiving payments. Sites such as Upwork try hard to prevent identity fraud, but some people use the platform for criminal purposes.
Choose the Services you’ll Offer
Will you be a specialist or a generalist? You might specialize in Pinterest marketing or offer social media services across multiple platforms.
Decide on your target market
It’s important to determine if your idea is in demand. It’s also the perfect time to determine your unique sales proposition and brand. You may be able to sell yourself to larger corporations or only work for small businesses.
Decide on Your Rates
The right rate is a balance between getting paid what you are worth and being attractive to customers. You may not be able to attract clients if you do not charge enough. You may find that clients are unwilling to pay you if you charge too much.
Note:
Use the platforms available to compare rates with other freelancers. You can use this to make your skills and abilities more competitive.
Decide what you will charge for each project. Many freelance jobs are one-offs, (a time-limited job), and the client may want to know the cost of the entire project. Some freelancers work with clients who pay a monthly rate or retainer. A freelance writer could write eight articles per month for $400, or a virtual secretary can do 10 hours a month of work for $200.
Create a Online Portfolio
Create a profile to promote what you offer. LinkedIn can be a good online resume to help promote your business. Consider Portfoliobox, SquareSpace and Journo Portfolio.
Market Your Services
There are several low-cost and no-cost ways to promote your freelance business , and attract clients. There are many options, including networking on social media sites, providing a free consultation, asking clients for referrals and email marketing.
