The 101 of Freelancing
Freelancing is becoming a more common term around the world, even in the United States. If you have just recently decided to take the plunge into the exciting, wild, crazy, and ridiculously lucrative world of freelancing, then welcome aboard! It’s going to be a ride that you’ll never forget!
Of course, everyone dives into this career path with the greatest of expectations as well as a pocket full of dreams, hopes, and fears – but few of them ever jump in with both feet having covered all of the bases.
Becoming a successful freelancer takes time, but there are things that you can start doing immediately if you want to get into freelance. A little bit of foundational information needed for this which will eventually give big boost right out of the gate, and allows freelancers to quickly start making the kind of lucrative income they’ve always wanted with complete and total freedom.
Freelance statistics
Freelance statistics are a great way to show you how you’re not alone in wanting to go freelance, how others are finding the freelance environment and how freelancers contribute to the overall economy.
US Freelance Statistics
A recent survey of the U.S. independent workforce finds that:
There are 53 million people doing freelance work in the US and this is 34% of the national workforce
People who freelance contribute an estimated $715 billion in freelance earnings to US economy
80% of non-freelancers say they would be willing to do work outside their primary job to make more money
Earning extra money and schedule flexibility are the top drivers of freelancing
Finding work and, correspondingly, income stability are the top barriers to doing more freelancing work
69% of freelancers said technology has made it easier to find freelance work
77% of freelancers say the best days are yet ahead for freelancing
65% said freelancing as a career path is more respected today than it was three years ago
36% of moonlighters who have a primary job have thought about quitting, to work completely independently
UK Freelance Statistics
In the UK, the Professional Contractors Group estimates that:
There are 1.4 million British freelancers working across all sectors and This has grown 14% in the past decade
The flexibility offered by Britain’s freelancers is worth £21 billion to the UK economy in added value
78% of the UK public think that freelancing and flexible working help promote a good work/life balance
72% think freelancing has a positive effect on family life
What is Freelancing?
A freelancer, or independent contractor, is a self-employed individual who doesn’t have to commit to a single, long-term employer. Instead, they work independently for several different companies or clients. Freelancers typically charge by the hour or day and are not required to register as a business if they operate under their own name. Today, the term is often associated with writers, photographers, editors, programmers, website designers, and professional consultants, as well as many other professional services.
You can work on the sectors like Marketing, Business Project Management , Web Development Writing, Accounting, Insurance Inspection. Teaching/Tutoring, Social Media , Graphic Design, Administrative Assistant and many more filed.
The 5 Types of Freelancer
Freelancers are referred to in a number of ways, Here are five of them -
Independent contractor: They do supplemental and contract work on a per-project basis. Many think of independent contractors when the word “freelance” is mentioned.
Moonlighter: They’ve got a full-time job and also a “side hustle” — like a salaried engineer who takes on consulting assignments on the weekend, or a teacher who tutors after school.
Diversified worker: They are Part traditional employee and part freelancer, diversified employees split their time between part-time jobs and at work. These types of freelancers are becoming more popular as on-demand service apps take off. A diversified worker, for instance, might work 20 hours per week as an office administrator and another dozen or so delivering goods for services like Postmates or TaskRabbit.
Temporary worker: Most of us are familiar with this subset. Temps have either a single, traditional job, or a contract position for a predetermined period of time, like a web designer who works for three months at a soon-to-launch startup.
Freelance business owner: Think of this as a freelancer’s freelancer. Imagine a successful freelance Advertising Agency that needs to expand business to meet rising demand, so they hire additional freelance Advertisers.
The Benefits of Freelancing
Whether you’ve recently been laid-off, or you just want to go into business for yourself, freelancing offers a number of incredible benefits that most employers just can’t compete with.
Here are some of the reasons all freelancers are going Freelance:
You’re the Boss - Freelancing gives you the ability to say “No”. You do not have to take on work that you do not enjoy. This means that you can choose the work you like most. Freelancers do not have a regular boss to take instructions from. They take instructions from their clients. But they can end relationships with difficult clients if they wish. If you’re a night owl, you can work the entire night and sleep in until noon without ever having to leave the house. Additionally, you can also select what projects you want to work on. If you’re a photographer, you may accept wedding photography as your convenience. This means that you don’t have to accept a wedding job if you don’t want to, but you’ll be able to select only the events or situations that you prefer to take pictures of.
You Can Make More Money - If you have the drive, freelancers have the potential to make more money than the average person. Some reports have found that freelancers actually earn 45% more than the normal worker.
Work-Life Balance - You can spend more time with family and friends – Flexible hours mean that you are able to choose how you split your time. Between flexible schedules, and the fact that only 29% of freelancers work more than 40 hours per week, freelancers have an incredible work life balance.
Happier, Healthier - Studies have found that freelancers are happier and healthier, both mentally and physically, than traditional workers.
Flexible schedule - Hate early morning wakeups and being slammed with more than one project at a time? Freelancing kicks butt in this regard. You make your own schedule, work at your own pace, and only take on new tasks when you’re ready. This open arrangement leaves you with more time to do the things you love. In fact, the No. 1 reason people freelance is to gain more flexibility.
Fewer working hours - You dictate your own workload. Freelancers often work less than the traditional 40-hour work week (36 hours, on average).
No more traffic – Working from home or a nearby coffee shop is a realistic option. You can save time and avoid a lot of the stress that goes along with commuting.
You do not have to get a higher education - Payoneer uncovered something fascinating in their study. They found that a higher level of education did not result in higher rates charged by Freelancers. They actually found that freelancers who graduated college were charging less than those who did not. Companies hiring freelancers are interested in their skills, experience, and ratings. They are in general less interested in their level of education.
When and where you want to work - Freelancing is about output. Generally, no one cares where and when you work as long as you deliver high-quality work on time. Payoneer recently conducted a survey of over 23,000 freelancers across over 180 countries. They found that freelancers work an average of 36 hours per week. There is a wide range in the number of hours worked. Some professionals use freelancing as a way to supplement their main job while others are full-time freelancers. Most importantly, they get to choose which 36 hours each week they work.
You can work almost anywhere—from your own home office, coffee shops, or co-working spaces (no more claustrophobic cubicles). Nearly three quarters of freelancers (73%) say one of the top reasons they choose to freelance is the ability to work anywhere.
Tax deductions - As a self-employed worker, there are a bunch of things you have to pay for that full-time employees don’t have to. These include business cards and promotional materials, business-related gas and parking fees, travel, a computer or other equipment, and much more. Not to worry. As a freelancer, you can deduct all of these added expenses on your taxes. Additionally, you can deduct the cost of extra freelance employees, business loan interest, up to $1,500 of rent or mortgage interest related to a home office, depreciation, and homeowner’s taxes and insurance.
The Drawbacks of Freelancing
Full-time freelancing is a great fit for those of you who are self-motivated and enjoy creative freedom. While there are a number of incredible benefits surrounding freelance work, there are some disadvantages that should be considered.
No Job Security - If your clients don’t have any work for you, then you can’t make any money. Even when you’re an employee, you always have work to complete unless the employer goes out of business or you’re laid off. You enjoy more freedom and flexibility than your traditionally employed counterparts, but you’re also more vulnerable to inconsistent work and economic downturns. Often times, you’re at the mercy of your client’s budget, so you should definitely try to work for multiple clients instead of relying on one. All of these factors make it difficult to chart a monthly budget. An unsteady income is a concern for three-quarters of freelancers.
Inconsistent Work- There are months when there’s a ton of work to complete and the paychecks are more than you expected. However, the work may dry up and the next month you’re only making half of what you made the previous month. As an employee, at least you know how much you’re paycheck is going to be each month so that you can budget accordingly.
You Have to Handle Accounting - Taxes, bookkeeping, paying bills, and managing cash flow is up to you. While there is readily available software to assist you with your accounting, it’s an additional task that traditional employees do not have to be concerned with.
You Risk Not Getting Paid - It’s not uncommon for independent contractors to have difficulty getting paid for their services. Some clients either don’t pay on-time or they don’t pay at all. Unlike traditional employees where you always know that a paycheck will arrive.
Not every hour is billable - Full-time employees are paid for every hour they’re at work. The same isn’t true for freelancers. Managing clients, finding new jobs, and billing can take dozens of hours a week to complete — time you’re not being paid for.
No employer benefits - One of the perks of working for someone else is that the employer will handle all of your health or retirement benefits or bonuses like paid vacations or profit sharing. Purchasing your own health insurance is often more expensive than what is offered from an employer. While full-time employees typically have a large portion of their health insurance paid by their employer, freelancers don’t enjoy that luxury. You’re responsible for finding and paying for your own coverage, and individual plans can be costly. It’s no wonder that the cost of health insurance is a major concern for 44% of freelancers. And you don’t get paid sick leave or vacation. If you miss a day of work, you simply don’t make money that day, and that stinks.
Think about your Finances
Your finances are the most important issue to consider when starting out. You’re probably used to getting a pay-check by the end of the week/month/year. Not having that - is what many people are afraid of when embarking on their freelancing career. Luckily, you will get used to this pretty quickly. You just have to approach your finances differently. The most important thing is to always have enough money in your bank account to allow you to live for the next couple of months, even when it seems the work is rolling in.
Taxes are an important part of accounting that many overlook in the early days. It’s tempting to spend all the money you get, but it’s important to keep in mind that someday the tax office will want it's part of your income.
In order to avoid being trapped in the pitfalls of your tax system, I highly recommend getting an accountant. It’s generally not too expensive and allows you to focus on what you’re good at. At the beginning of every month I collect my bills, drop them off at my accountant’s and wait for her to tell me how much I have to transfer to the tax office.
However, it is possible to take care of your finances without the help of an accountant. If you have the time to spend on your accounts - you can have a far greater control and insight into your financial situation. The most important thing is to be realistic – if you know you’re not the accounting type, get an accountant straight away. Hiring an accountant at the beginning of your freelancing career will be far less expensive in the long run than fines from the tax department and hiring someone to sort out your abysmal records.
Setting Up Your Workplace
The first thing I looked for, even before I registered myself as a freelancer, was an office. While I enjoy working from home, I prefer to have a place where I can focus solely on work. If you can devote yourself to your work at home, then great! But if like may of us - you find this impossible, look for a place in a shared freelancer office or get your own. Luckily, i got an office..
After weighing the pros and cons of freelancing, you may have decided that you’re going to go forward and become an independent contractor. Now it’s time to get your workplace figured out so that you can begin working.
You could simply sit at the kitchen table or convert that spare room into an office and not have to be concerned with getting distracted by others. If you live with others, you’ll have to find a space where you can be left alone during “work hours.” Preferably this space, would be a room where there’s a door that closes.
No matter where you decide to make your office, make sure that it’s in a spot that is free of distractions and fits your needs. A writer just needs their laptop and an outlet to charge the battery. But, a photographer may need a darkroom to develop their images, on top of an area to edit the photos.
While some freelancers will rent a commercial office space, most are likely going to start their freelance careers from home. That means setting up a work environment that’s efficient and distraction-free.
If you live alone, you may opt to just work from your kitchen table or a desk in the corner of your living room, at least to begin with. In either location, you can minimize distractions because you are in sole control of your living space.
Types of work that can be done as a freelancer
Popular freelance work includes content writing, design, marketing, IT development, data entry and research. But, the type of work that can be done as a freelancer is almost unlimited. To get started, you will need to select the type of skill that you are able to offer others.
The hourly rate you can charge as a freelancer depends on the type of work being done. Payoneer uncovered that the average freelancer rate was $21 per hour. Almost half of freelancers charge under $10 an hour for their work. 40% charge between $11 and $30, and 18% command over $30 per hour.
The income survey confirmed that certain skill types demand much higher rates than others. Freelancers providing legal services charge an average of $31 per hour. This is much more than freelancers working in Sales & Marketing ($21) or Writing & Translation ($17).
How could you start?
It may be daunting to freelance for the first time but there is no reason to be afraid. If you desire or need the independence that freelancing provides, trust your own abilities. Take the leap into this ever growing way of working.
Select the type of work you want to do - As mentioned the first step is to decide on the type of work that you want to do. You should not be too general with this. For example, if you want to make money through content writing - rather brand yourself and promote your services as a content writer in a certain niche. Select a specialty and be open to adjusting this over time to adapt to trends and industry movements.
Decide where you want to work - Will you be working from home, a set office or a co-working space? Working at home is a real option for those with home responsibilities. It's also the cheapest option. But, you may become isolated working from home. You may struggle with distractions, and lines between home time and work time may become blurred.
Build a portfolio of work – As a freelancer, your portfolio represents you and your work. It features all your history in one place. How much you put in here is up to you, I have just one recommendation: Don’t lie in your resume. Don’t mention things you didn’t do, don’t know how to handle or worse, things you know are fashionable but know nothing about. The work you’ve done in the past speaks for itself. If you already worked on several projects, know your way around, there’s no need to lie. The more you already know, the easier it usually is to learn new things. If a client asks for a specific technology that’s not yet on your resume, either show the willingness to learn, or pass. That’s something to get used to. It’s tempting to say yes to every job you’re offered, but in the end it might result in a disappointment for both you and your client. Care for your portfolio, improve it, and learn new things on your own time.
Research the amount that you wish to charge - Take into account your experience, what competitors are charging and your costs.
Draft legal contracts – Draft the contracts that will define the specific circumstances under which you will work. For example: what will happen if a client cancels a job request? When do you wish to be paid? you are definitely going to want to protect yourself, your business, and your abilities with any and all contracts or agreements that your lawyer recommends you have under your belt – but always remember that your work, your results, and you yourself are always going to be your very best protection from sticky situations moving forward. Manage expectations, provide impeccable results, and deliver real and consistent value, and you won’t have any headaches or hassles going forward.
Decide how and when you will you be contactable – This may be necessary so that you are able to concentrate on working at specific times. So you can specify that you wish to be contacted via email except at certain defined times or in case of an emergency. Specify if you wish for time spent on communications to be charged for.
Connect with potential clients, build your brand and network - You will need to promote yourself whenever possible. Attend conferences and meetups relevant to your niche. Spend money on marketing, write blogs, build an email list and comment in relevant forums. Engage in social media including LinkedIn.
Freelancing platforms
According to the Payoneer survey, almost half of freelancers find projects via online freelance marketplaces. The growing popularity of online marketplaces has helped millions of freelancers build a worldwide client base. Freelancer.com and Upwork have millions of freelance workers and millions of registered clients.
You will need to Bid for jobs and this takes time. You will often be unsuccessful in your bids. But, once a bid is successful it is key to form long lasting relationships. The more regular clients you have the less time you will need to spend bidding on projects. This bidding process can be a distraction from your core work. Balancing doing work and getting new work is something that takes some time to master.
You will need to optimize when to pitch for new work. Pitching too early means that you may over-commit yourself and not have the capacity to fulfill both new and existing jobs. This may lead to unhappy clients and poor ratings. If you pitch too late, you may be left with periods with no income. There needs to be a slow and steady feed into the pipeline.
For Americans, Toptal is a super option to set yourself apart from the masses. They only select the top 3% of freelancers that apply to work through Toptal. If you get through their tough selection process, you will have more opportunities to work with high caliber employers.
Another option for Freelancers is Fiverr. You can do micro tasks for as little as just $5 but the potential volume of work that you can get from Fiverr is large. The aim should be to do a job, and then form a longer term relationship that involves higher paying jobs over time.
There are more specialist sites too such as 99 designs for designers or UpCounsel for Lawyers.
Warnings before you jump into freelancing
Set boundaries - You will need to be disciplined not to fall into the trap of working “all the time”. Ensure that home time is home time and work time is work time.
Income volatility - Payoneer asked the freelancers surveyed to rank how satisfied they are with their current income from freelancing. The results indicated that many freelancers would ideally like to work more hours or be able to charge higher rates. You need self-discipline and emotional strength to work as a Freelancer. Your income will be more volatile and uncertain than with traditional employment.
No employee benefits – You will need to be in charge of your finances, ensure that you take care of medical cover and save for retirement.
Service providers might penalize you for your income uncertainty – The fact that your income is uncertain means that certain service providers like banks might, charge you extra to cover for your increased perceived risk of defaulting on payments.
You won’t only be able to focus on what you are good at – You need to be in charge of admin, marketing, sales, customer services and more.
You may become isolated - You will also be far more secluded from others. Increased independence comes with more self-accountability. It is important to have the people interaction in other ways or times of the day. This can be achieved through co-working spaces, regular coffee shops, gym, family and friends.
You need to be self-motivated and create a daily structure –avoid the temptation to procrastinate. Just because you can sleep until 10 does not mean that you should.
You need to develop your skills over time – you need to keep up to date with industry trends to ensure your services stay relevant.
If you are just beginning you won't be able to charge as much as more established freelancers or agencies - If possible, try taking on client work in your spare time before fully quitting your day job. This means that when you do quit, you will have existing clients and future jobs lined up.
You need to be good at sales and marketing - You are the business. You are essentially the CEO of you. You may be the best lawyer, designer or business analyst in town, but, if you are not able to sell yourself you will not get the amount of work you want.
Find a mentor – If you are just setting out on your Freelancing journey ensure that you get an experienced mentor to guide you along your journey. The emotional support will be as important as the practical guidance.
Aim to diversify your income – It is best if your primary income does not come from one source. This will help ensure that if you lose a primary client you will not be left without a source of income.
So….
Understand the challenges and benefits of freelancing before jumping in. But if you do take the jump, it may transform the way you make money and the way you live your life.
Conclusion
Now that, you’ve got the knowledge, and you’ve got the tools – now it’s time to put them into practice. This is an opportunity for you to change your business, and potentially to change your life. Many freelancers have made the transition from having a work-at-home job to owning a freelance business, and some of them have done it spectacularly.
Some of the resources you’ve seen in this course were started by freelancers who, just like you, wanted something more from their business. Now many of them manage distributed teams with dozens of people, run their businesses on an entirely systematized foundation, and are successful beyond belief.
You can get there too. Building a business can be hard work, and don’t listen to anyone who tells you otherwise, but the work is almost always worth the effort. The freedom and opportunities that you can have as a freelance business owner are truly unbelievable and much closer than you might think. Good luck and I wish you all the best.