Nearly a decade ago, the United States started into the largest economic downturn since the Great Depression. Housing markets collapsed. Unemployment numbers languished in the double digits for years on end. People who were looking for work just gave up and took whatever they could get. As a result, work began to change.
Side hustles turned into permanent jobs, and people started to see the value in freelancing. Today the gig economy is growing: Last year it was estimated that 34% of the American workforce were freelancers, and that number is projected to be 43% in 2020.
Just six years ago, Uber came onto the scene, allowing customers to hail a taxi with a smartphone app. Eventually it became a way to put people to work running a citizen taxi service, giving people an easy way to try their hand at a side hustle. Today Uber is the benchmark for all other gig-based jobs. If you hire a dog walker with an app, it's colloquially referred to as the Uber of dog walking.
Many people even find the gig lifestyle preferable to a more traditional career path.
Successful freelancers know how to take inventory of their skills, determine which ones have the highest market demand, and put them to use in a way that they can monetize.
The gig economy is not without controversy.
Oftentimes when we hear about ridesharing apps in the news, it is because of some sort of controversy. Either the work environment is alleged to be hostile, or there's an issue about who is responsible in the event of an accident. With changes in technology come unforeseen issues of car insurance coverage and even who might be the responsible party in the event of any injuries sustained during a ride.
For this and many other reasons, oftentimes cities are reluctant to allow ridesharing apps to set up business within their jurisdictions. Ridesharing apps can face a steep uphill battle for every single market they get into because of issues, not only with insurance and licensing, but also because of concerns over employee rights and compensation.
Why is the gig economy so popular?
Lots of people have found that the gig economy gives them freedom to work where they want, when they want. If you don't feel like you work best between the hours of nine and five, why would you want to pursue a traditional job?
Freelancing and working in the gig economy gives you the opportunity to be your own boss, and while that may bring considerable stress, many people find it to be a worthwhile life choice.
How can you survive in the gig economy?
Being your own boss means you are going to be solely responsible for finding your own clients, though working through established freelancer sites like Fiverr and Upwork can help you out with at least that part of the equation.
In order to thrive as a freelancer, you need to do the following things:
- Don't just rely on social media to make connections. Attend in person networking events and always keep your business cards handy.
- Have a modern website that showcases your professional portfolio so you don't have to scramble when a client wants to see it.
- Market your personal brand like you would market a large company.
- Maintain relationships with your past clients; repeat business is often the easiest to get.
- Always stick to the contract and complete your work on time as promised.
- Use social media to network with other freelancers around the world and set up a referral network.
You'll have many new responsibilities.
Being your own boss isn't all fun and games. You'll be responsible for things like paying taxes, buying your own health insurance, and saving for retirement. You know all those employer-matched expenses? You're the employer now. Freelancers are expected to pay additional taxes that are normally taken out of a traditional paycheck, which can add up fast. You'll need to budget for this additional expense.
Health insurance can be significantly more expensive when you are buying it on the open market, as well. And kiss your retirement matching funds goodbye - you'll need to set up your own SEP IRA or Solo 401k.
Being your own boss can be a great solution.
Even though your expenses can go up as a freelancer, you'll be able to take many more tax deductions. It can also mean the difference between spending your entire paycheck on daycare or working your schedule around your family so you can spend more time at home. Learn more about the intricacies of the gig and freelance economy from this infographic from Jobvine.
Do you think you are ready to be your own boss?