What is Freelancing?
May 8, 2008 |
Corporate downsizing. Two hour commutes. Job insecurity. Gas prices through the roof.
With these uncertain economic times come thoughts of “there has to be a better way!”. Many people are rethinking how they want to earn a living. Franchising is booming. More people are starting their own businesses than ever before. According to the US Small Business Administration, 1 million new businesses start up each year. One statistic indicates that a new business is started every 11 seconds!
Do You Have What It Takes?
But what if you don’t have the capital required to buy a franchise or start your own business? You could start small with a home-based business providing a product or service. There are a number of people earning a substantial income selling everything under the sun on eBay.
The answer may lie somewhere in between. For many people, freelancing is providing a substantial income, and is permitting them to have the freedom to work and still live the lifestyle they desire. How many stories have you heard about corporate mom and dads who have had to miss important events in their children’s lives in order to achieve career success? Many of these same people are now discovering freelancing as a way to get off the treadmill.
To be sure, not everyone’s talents or occupation lend themselves to freelancing. Manufacturing, retail, insurance, and some other industries require resources that go beyond what freelancers can provide. Types of Freelancing discusses occupations that do.
Freelancing Defined
So what exactly IS freelancing? Wikipedia defines a freelancer as “a person who pursues a profession without a long-term commitment to any one employer.”
Perhaps a tighter defination is offered by the Concise Oxford English Dictionary
“A person, usually self-employed, offering services on a temporary basis, to several businesses, for particular assignments”.
According to the Freelancers in the UK site:
“Freelancing is making your skills work for you in a way that accommodates your work/life balance; it opens up the potential for you to steer your career in a direction that suits you. It’s about working at your own pace, taking responsibility for your own future, being captain of your own destiny…”.
So do you think you have what it takes to be a freelancer?
Attributes of the Successful Freelancer
When you work as an employee, you are protected against a lot of the everyday concerns of the working world. You are usually provided with a space to call your own — furniture, desk, equipment, supplies, vehicles, and other resources that enable to you accomplish the job you were hired to do. Someone handles the accounting, legal issues, marketing, sales, and tax issues for the business (unless, of course, that is your job function), and you are free to just concentrate on the job you were hired to do.
All those concerns mentioned above become yours when you become a freelancer.
You really discover a lot about yourself once you start freelancing. Once you accept an assignment and the rubber meets the road, then deadlines loom, and when your personal life activities interfere, you learn how to set priorities and make decisions fast. Here are some attributes that most successful freelancers possess:
- Experience - Make sure that you have some expertise in the area in which you wish to freelance. Your client’s perception of whether you come off as a professional or an amateur will largely determine the repeat business you get, and you do want to get repeat business whenever possible.
- Reliability - In any service business, the #1 attribute of customer satisfaction is how closely your promises match the results. This includes delivering on time and keeping the lines of communication open during the entire project.
- Staying Focused - Being free to work where and when you want brings with it lots of opportunity for distraction. You need to be self-disciplined and able to separate your work and personal life to meet deadlines for deliverables.
- Ability to Learn Quickly - You are being hired to do something for an employer without the benefit of being an employee. This is what outsourcing is all about. Often, the assignment will involve assimilating proprietary information very quickly in order to meet the client’s expectations. Listening to and following instructions are related to this also.
- Flexibility - Being able to respond positively to changes in schedule, shifts in demand, or modifications in what the client wants are all part of the life of the freelancer.
- Organization - Freelancers often are juggling assignments for several clients at once, and need to be able to keep track of everything efficiently and stay organized, especially under pressure.
- Self-motivation - This life is usually not 9 to 5, so the individual who freelances needs to be self-directed and aware of the responsibilities they have to their clients, even when they would rather be doing something else.
- Persistence - The freelancer needs to be able to overcome obstacles that may be blocking the accomplishment of their goal — whether it be obtaining the information they need or selling to a potential client.
- Professionalism - Freelancers are in business for themselves and need to conduct transactions in a businesslike matter and present themselves well to clients, whether the contact be via email, letter, phone, or face-to-face.
- Being able to say “no” and also accepting “no” for an answer - As a freelancer, you may be tempted to take on work that is a bit beyond your current resources or your level of competency. Declining the job shows restraint and respect for the client. Likewise, many of the bids of successful freelancers are rejected over time, and they need to have a thick enough skin to accept rejection and move on.
- Confidence - The successful freelancer is able to sell themselves and their services and projects with confidence in their abilities.
Can You Make a Decent Living Freelancing?
First of all, recognize that freelancers usually make more per hour than employees at a company doing the same thing because the client doesn’t have to pay benefits and the government taxes on freelance payments. However, also realize that a higher level of expectation is often placed on freelancers because they come to the job as experts and there’s a greater tendency to watch subcontractor’s hours.
That being said, what you can make depends on your level of expertise, the frequency of assignments, the amount of work you get, and the demand for your skill. Different kinds of freelance jobs pay in different ways. You may get paid hourly, by the project, per lines of code, on commission, or even per word if you are a freelance writer. It all depends on what is customary for your line of work.
To take the freelance writer as an example, if they were to be paid $1.50 per word for a 2,000 word article, that looks like that would translate to a $3,000 fee. That doesn’t appear to be a bad gig! But in order to determine if that assignment is worthwhile to tackle, they would have to figure out what kind of research would be necessary, who they may have to track down and interview, the time necessary to write and revise, etc. If all that takes a week, on an hourly basis, it may only amount to $75.00 an hour.
It pays to know what the going rate is for the type of work you do. You can sometimes determine that by researching employment ads or by calling agencies that place people in the area in which you want to freelance. If your experience is a little on the light side, you can price yourself on the lower end of the range. If you’re an expert, go on the higher side. While you can always ask high and then negotiate downward, it’s often a fine line because if you start too high, you may scare away potential clients who also have other competing bids to consider.
So the bottom line is, if you can get work pretty regularly, you can expect to make anywhere from 25% to 50% more than an employee in a company doing the same type of work. But as was mentioned above, you will be responsible for paying your own government tax payments, health insurance premiums, overhead expenses, etc. There are tax advantages to all this, however, that we’ll examine in more depth in the Freelancing Money Matters section.
How Do You Get Started Freelancing?
Believe it or not, just start doing it! Literally millions of people who were laid of from their jobs have realized that they have a lot to offer a potential employer and have decided, by choice or not, to call themselves “consultants”. They did not go through a formal training program to become a consultant, but instead consider their many years in the “school of hard knocks” to be their training ground. If you have confidence in your abilities, you should be able to do the same thing and call yourself a freelance “whatever”.
Marketing yourself is discussed in the Push Marketing and Pull Marketing sections, but one of the easiest ways to get started is to check the online employment sites for contract work in your area. Most employment agencies also handle contract work, sometimes called temporary assignments.
The point is, this is a low cost of entry endeavor. You’re basically just “helping someone out”, just like you’d lend assistance to a friend or neighbor who needed help wiring a light fixture or building a deck. If you have the expertise, go for it!