The Business of Freelance: An Increasingly Popular and Very Viable Career Choice
Maybe it's time we rework how we look at this type of career.
This article was written by Lindsay Patton, a member of the Entrepreneur NEXT powered by Assemble content team. Entrepreneur NEXT is our Expert solutions division leading the future of work and skills-based economy. If you’re struggling to find, vet, and hire the right Experts for your business, Entrepreneur NEXT is a platform to help you hire the experts you need, exactly when you need them. From business to marketing, sales, design, finance, and technology, we have the top 3 percent of Experts ready to work for you.
It’s time to give freelance workers the credit they deserve. Often looked at as not a “real” occupation, freelance work can seem abstract for some people, when it’s actually a very viable career choice. Freelancers are proving their working model is one that is only getting more popular. It’s estimated that freelancers will become the workforce majority, with millennials and Gen Z pushing for more contract, remote work opportunities. The Upwork and Freelancers Union’s Freelancing in America: 2019 report found that 57 million Americans freelance in some sort of capacity, making up 35 percent of the workforce. Out of all generational groups, Gen Z has the most freelancers, at 53 percent. Between 2014 and 2019, the amount of people who freelance full time rose from 17 to 28 percent.
With the freelance model trending up, maybe it’s time we rework how we look at this type of career. Because honestly, freelance workers are more than just the projects they take on: they’re running a whole dang business on their own. Just like a business owner, self-employed freelancers have to promote themselves, build relationships, be smart about what they take on and be financially savvy.
Many freelance workers recognize the work they put in and how closely it resembles running a business. Here are ways the two are nearly identical.
Freelance workers manage their own financials.
No HR, no accounting, no payroll. It’s all up to you. For some, it’s a dream. For others, it’s enough to induce a panic attack.
Many self-employed workers prefer the go-it-your-own accounting method, as it puts them in control of their personal finances and allows them to adjust their rates whenever they want. For freelancers who are a little more hesitant to manage their own financials, there are plenty of ways to hire an expert to help navigate this big undertaking.
Since freelance workers are technically running their own business, they have to do taxes like a business owner. One of the biggest challenges as a freelancer is preparing for tax season. Since taxes are not taken out of freelance checks, it’s on the contractors to set money aside for what they owe on taxes. This often makes or breaks a freelance worker and the most prepared are likely looking at their work as their own business.
Some people feel confident in their own knowledge to file their own taxes, while others look to services like H&R Block and TurboTax, or hire their own personal accountant or firm to handle their finances. Remember, there is no right way for a freelancer to manage their finances, just the way that is right for them.
Freelance workers often create LLCs.
Many freelance workers are already business owners, meaning they have filed to become a limited liability company, or “LLC.”
According to the IRS, “For income tax purposes, an LLC with only one member is treated as an entity disregarded as separate from its owner…”
Simply put, an LLC protects freelance workers’ personal assets from their company’s debts or liabilities. When freelancing without an LLC, the government views your work as an extension of yourself. Having an LLC separates your freelance taxes from your personal tax return.
And filing for an LLC is a relatively easy process that is worth the little investment. Each state has different requirements and filing costs, so it’s important to get the details directly from the Secretary of State.
The number one problem shared among entrepreneurs today is finding, vetting, hiring, and retaining expertise.
Freelance workers often have to outsource help.
As projects grow, many freelancers have to connect with fellow gig workers to complete the work successfully. It’s the nature of the economy—any good contract worker is going to grow. And being only one person, contract workers have a finite amount of time… unless they can get help.
For larger projects, it’s common to bring on a contract employee to make sure deadlines are hit and the work quality doesn’t diminish as responsibilities are added. Like any business owner, you have to be choosy about who you hire - they could be the reason you keep or lose a client.
Outsourcing help for your projects is easier when you work at building your network and promoting your skills. The freelance network is a growing one, and connecting with fellow freelance workers is beneficial for two reasons:
If you need to bring on help, you don’t have to search hard for a good fit.
If they need to bring on help, they could see you as the good fit.
Freelance work ebbs and flows. Some weeks and months are light, while others make it tough for you to catch your breath. Nurturing your network and tapping into their resources is beneficial for any type of workflow.
Freelance workers have to promote themselves like a business.
A freelancer’s plate is always being rearranged with various helpings and different projects. To keep that plate full, freelancers have to be proactive about marketing their services. They need to attract and keep clients, and getting their work in front of other people is the best way to do so. Like any business, there are key marketing tools a freelancer needs to utilize to keep earning income:
If the goal is to promote services, freelance workers need to determine which social media platform is best for them. LinkedIn was created for digital networking, so that platform is a must. Secondary platforms are chosen based on how a person’s brand and services translate. If they work in a visual space, Instagram may be the best way to grab attention. If they’re a writer, focus on Twitter or Facebook, where it’s easier to share links.
A professional website is just as important to a freelancer as it is to an established business. A well-built website is easy to navigate, explains services, shows work examples and provides a clear way to contact the owner.
Content is one of a freelance worker’s best-kept secrets. By creating a blog on their website, a freelancer is establishing themselves as an expert in their field and increases SEO for their website. When a self-employed freelancer is continually creating content on their website, they’re bringing in more traffic.
If freelance workers don’t network, it will be harder to connect with gig opportunities. Similar to business owners looking for clients, freelancers are always looking for a new relationship that may be the bridge to their next project.
Contrary to what many believe, the freelance life isn’t just sitting in front of a computer while wearing pajamas. There is a whole lot of hustle involved including maintaining relationships, keeping workflow moving and on time and always being on the lookout for growth opportunities. You know, just like a business.
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