Post-pandemic, more people are joining the gig economy and working as freelancers or contractors. But wanting to be self-employed doesn’t guarantee you’ll do well at it.
There are many reasons for the staffing shortage of 2021. One of them is that people have revisited their priorities and decided to shift direction. Perhaps they want to work from home full-time. Or they’ve always wanted to consult, write, or design for a living. All these are contributing to high employee turnover and an increase in the number of people working freelance or as contractors.
According to Statista, 86.5 million people are projected to be freelancing in the United States in 2027. In fact, they are predicted to “make up 50.9 percent of the total U.S. workforce.”
So, if you’re joining the ranks of the self-employed, you’ll want to know how to succeed as a freelancer/contractor. Here’s helpful advice to get you started.
Take it seriously
You may think freelancing is an opportunity to sit at home and sip coffee in your pajamas while you wait for all the big contracts to come to you. But that’s not going to happen. Not at first, at least — if ever.
Set up shop seriously as a freelancer. Writing for ZenBusiness.com, freelancer April Maguire says, “It’s almost impossible to do business without first building an attractive and user-friendly website.” You need to develop a digital presence and make it easy for people to get in touch with you.
You also need to market your business. This can mean putting some money aside for pay-per-click ads and other digital marketing. Or you can set out first to land clients relying on social media and putting articles and videos on your site that establish your credibility.
There’s a surprise, right? As if there is any job out there right now where you won’t be more successful if you network. Reaching out to everyone in your network and letting them know you are available for freelance and contract work is an important first step. These are the people who can testify to the quality of your work. Even if they can’t hire you, they can put in a good word for you with someone else who might be looking for help.
You might also join local business organizations or attend skills workshops locally. Befriending other freelancers in your industry can help you feel more connected as you build up your business.
Get a mentor
It can also be a good idea to reach out to a more established professional freelancer in your area. Ask them to mentor you as you launch your contractor career. Having access to someone who has already done the hard work of building up a freelance business can help you avoid pitfalls and save you from having to learn everything from scratch.
Career site Indeed suggests, “To convince that person to take some time for you, show them how serious you are about your work. Present them with your business plan and website … to demonstrate your determination to succeed as a freelancer.”
Research your competition
Freelance startup consultant Emil Lamprecht writes about his experiences setting up shop for CareerFoundry. “Looking closely at what others were doing” was useful to him because it helped him discover he had competition just down the road from him, but that he could stand out by “having an attractive personality, and a digital presence.”
Pulling together a portfolio can be easier, too, when you’re aware of what the competition is offering. You want to showcase your very best examples, but you’ll know what types of examples are needed to gain a foothold in a particular niche.
Set a realistic fee
Understanding how much to charge is another advantage of researching the competition. Sara Horowitz, author of The Freelancer’s Bible, told the Harvard Business Review (HBR), “This isn’t about your expenses … so don’t add up your mortgage payment and your other costs of livings to figure out your hourly rate.”
Sumeet Goel, who founded staffing firm High Point Associates, gave HBR the following rule of thumb for those leaving full-time jobs. “Take your cash compensation and divide by 250 (which is the number of billable days after factoring in vacations, sick time, and typical downtime) and then add 25 percent to 50 percent.”
You may need to start out charging a lower rate to build up a clientele, but don’t be afraid to push your prices up as you get positive feedback from clients and are rehired by them.
Seek multiple clients
As a freelancer, you don’t have the same protections as an employee who is hired to work for that one company. You could have a great relationship with a single client. Plus, the work you do for them provides a steady income. But if that client loses a customer, or has to tighten their budget, freelancing could be the first area for cuts. You don’t want to go from flush freelancer to an out-of-work one because you’ve only cultivated that one client relationship.
As Maguire points out, “Exploring different customer bases can help you gain expertise in new and potentially lucrative areas of the industry.”
Offload the administrative stuff
Running your own business requires different administrative tasks like scheduling appointments, invoicing customers, responding to prospect emails, tracking expenses, and more. You can’t bill for the time spent on business chores, but you can increase your hourly rate to support contracting it out to someone else.
If you’re reluctant to pay someone to do the grunt work, weigh the amount of time you spend doing these kinds of tasks against what you can earn in that same time doing more freelancing.
There are also many cloud-based solutions today to automate the back-end of the freelance business. Review this round-up of calendar, contracting, finance, project management, and timer/tracking tools to find one that suits your needs.
Is freelancing in your future?
Knowing that you want to succeed as a freelancer, you’ll also want to keep an eye out for our article on the top attributes of a successful freelancer. Our series will also outline what freelancers can offer a business. We’ve also written recently about getting the best results from freelance and contractor partners.
If you’re an employer, it might be surprising to learn how many of your employees are considering leaving the full-time ranks. How well are your efforts to build a balanced workforce working out? Use SoGoSurvey’s employee engagement tools to gauge satisfaction and support your retention efforts.