The Pros and Cons of Starting an Online Freelancing Business
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The following excerpt is from Shelby Larson’s book Moonlighting on the Internet. Buy it now from Amazon | Barnes & Noble | iTunes
Shelby Larson presents the most reliable and proven ways you can create an extra paycheck for the short term and establish a continual revenue stream for the long term with your own website. In this edited excerpt, Larson explains the pros and cons of freelancing as a business.
Although Dictionary.com defines a freelancer this way:
Freelancer: A person who works as a writer, designer, performer, or the like, selling work or services by the hour, day, job, etc., rather than working on a regular salary basis for one employer.
I simply define freelancing as selling your own skills without ties to any one company with full freedom to choose what, who, and how you want to work with your clients. In a nutshell, freelancing is successfully earning income with your own skills. Freelancing is ideal if the idea of working for yourself resonates with you and you have marketable skills that are frequently in demand.
Learning how to successfully freelance online is one of the quickest ways to begin making money online. This is especially true if you have a commonly sought-after skill set like writing, graphic design, or tech-related skills like website development or computer programming. However, if you’re reading this and don’t think you have a specific in-demand skill set, hang in there: becoming a virtual assistant may be a perfect fit for you.
Before you can decide if this is the right path for you, review the following list of the pros and cons of being a freelancer.
Low-cost startup. Freelancing is one of the lowest cost entry points. There are ways to literally get up and running with little to no money out of your pocket upfront.
The market is massive and growing. More than 53 million Americans are doing freelance work, according to a new, landmark survey conducted by the independent research firm Edelman Berland and commissioned by Freelancers Union and Elance-oDesk. That’s 34 percent of the entire workforce.
Location independence. You can literally live pretty much anywhere you want. As long as you can connect to the internet with some sort of reasonable frequency, you’re not stuck living in any particular place.
Choose when you work. You get to be in full control of your schedule. Do you only want to work 7 a.m. to 10 a.m. every day? Do you only work on Tuesdays and Thursdays? As a freelancer, you can set the schedule that works for you and honors the commitments you make to your client.
Pick your clients. You get to choose who you want to work with. When you’re working for a company, their clients are their clients and you have to work with them. However, when you’re freelancing, you get full control over who you work for.
Pick your projects. You get to pick the type of projects that you’re going to work on. If you have specific types of projects you like to do or certain niches you prefer to focus on, you have the complete freedom to make that happen.
Better income potential. As you build your reputation and portfolio/history of successfully completed projects, you have more opportunity to charge more money. Pricing is a delicate thing, and it may take time for you to find the balance of when and how you can charge more, but the silver lining is that it’s in your hands. You don’t have to wait for an employer to notice, appreciate, and compensate you for your excellent work.
Try before you buy in. One huge benefit of freelancing is that because the barrier of entry is so low, you really can dip your toe in the water and see how you like it before you invest a significant amount of money and time into making it a more serious path for yourself.
Inconsistent income. Unless you add a recurring model that makes sense into your freelancing business, your income can be very inconsistent—especially when you’re first starting out. Sometimes the work is steady, but oftentimes you end up in cycles of what feels like feast or famine.
You are the labor. Your monetization is completely dependent on you doing the work. When you freelance, you’re selling your own services. So if you decide to go on vacation, or take time off, your income stops.
Lead acquisition is on you. Until you have a reputation built up that yields repeat business, you have to go out and fish for every client. Part of not working for someone else is that no one else is feeding you prospects.
Lower income potential. What? But I just listed “higher income potential” as a pro! That’s right. But this follows the theory of “opposition in all things.” Just as there is potential to make more money freelancing, there is also the potential that you will make less money. As mentioned above, incoming work isn’t guaranteed. In addition, lead acquisition skills don’t come naturally to everyone, and if you’re not careful, you could unintentionally pinhole yourself into a lower hourly rate than is desirable.
No traditional benefits. When you freelance, it doesn’t come with health insurance, a 401(k), or an HR department to help settle personnel disputes.
Commodity complications. If you’re not intentional about preventing your services from being lumped in as a commodity, you could end up in a situation where you work very hard and get paid too little.
As a freelancer, you get all the pros but you also get all the cons. Regardless of whether your journey is pleasant or difficult or a little of both, you get all the ups and all the downs. You get to live the dream of being your own boss, but the reality is that sometimes your boss is a huge, incompetent jerk.