A Self Employment Guide For 2021
Dear Rich Lifer,
If you were one of the millions of Americans who lost their job due to coronavirus, we are here to help because today, we are going to talk about freelancing.
Freelancing, often called “on-demand work” or “gig work,” has become increasingly popular during the pandemic.
Freelance can mean many different things, from computer engineering to marketing to copyediting to data analytics. You can start freelancing regardless of whether you are a millennial or a senior executive.
There has been a tremendous boom in people turning to self-employment; the data proves it…
Many people who start their own business apply for a tax identification number, and Census Bureau data shows that applications by businesses not expected to have employees rose 33% in the fourth quarter of 2020 from a year earlier. From July to September, they jumped 77% from the previous three months—the largest quarter-to-quarter increase in 16 years.
Additionally, Toptal, a freelancing platform that connects businesses with software engineers, designers and consultants, reported 286,000 freelancers signed up to use its site between March and mid-January. In all of 2019, only 189,000 signed up for the same service!
Joseph Fuller, a Harvard Business School professor of management practice and co-chairs of the research project Managing the Future of Work, explains this phenomenon:
Covid will accelerate companies’ use of gig workers and legitimize it more. It’s forced companies to blow through some of their concerns about distance work for their overall workforce, and that facilitates the use of distance workers and third parties in ways that they may have not anticipated.
Figure Out Where You Shine
Career-management consultant Marianne Ruggiero, founder and president of Optima Careers, says one of the worst things you can do when starting as a freelancer is “cast[ing] a wide net.”
She advises the opposite saying, “The market rewards specialization.” You need to figure out the thing you do best and then analyze that skill. Ask yourself how relevant your specialty is, especially now that companies are adapting to social distancing and remote work.
Also, explore the skills you enjoy the most! If you can hone a skill that you’re not only good at but also enjoy, you will achieve a happier and more fulfilling work-life.
Working freelance means you can no longer count on a steady paycheck, meaning you must review your finances before you dive head-first into self-employment, advises career coach Sarina Virk Torrendell.
It may also take weeks or months to get your first gig, so it’s important to ask yourself how long you can stay afloat without a paycheck. Further, don’t forget to factor in the benefits your old job provided, such as health insurance and paid time off.
According to research co-conducted by Brianna Barker Caza, an associate professor of management at the University of North Carolina at Greensboro, the people who thrive in freelance are those who can come to terms with how unpredictable income and overall stability could be.
Consult Your Contacts
In order to build a network as a freelancer, you need to establish a client list. Career consultant Ms. Ruggiero suggests focusing on getting “foundation clients: people who know you from prior positions, maybe you sold them something and they were the customer, maybe you were the purchasing manager and they were the vendor.”
You can also consult your list of contacts for advice! Odds are, not all of them will be willing or able to hire you at that moment, but staying connected to your network and building relationships is key.
Also, check out groups of other professional freelancers on social media to network and learn. Especially when you are starting out, it’s great to ask other freelancers about their experiences.
Don’t be afraid to talk finance while you’re at it. Your first contract as a freelancer will likely pay you less than you should, so ask around about market rates in your field so you can set your prices accordingly.
Make the Most of Online Platforms
There are a plethora of online platforms that match independent workers with companies looking to assign a work contract. Some of the most popular are Braintrust, Catalant, Fiverr, Toptal and Upwork.
These are great places to start building a reputation and expanding your client list.
Most are free to join and charge a commission on any contracts you sign. When you make a profile, be as specific as possible about your skills so you can find matches.
By getting a few projects completed and doing them well, you can boost your ratings and collect good reviews that can serve as a testament to your work for other potential clients to see.
Embrace the Hustle
Freelance is by no means synonymous with less work. Just because you are working for yourself or working from home does not mean you won’t work hard. In fact, freelance requires extra hustle because you “have taken on this role of marketing [yourself] in ways that [you] didn’t have to do for a larger organization,” says psychologist John Weaver, owner of Stress Management & Mental Health Clinics.
One way to stay on top of your work is to be hyper-organized. People often forget how much companies organize when you are a corporate employee. When you transition into freelance, every part of your work routine becomes your responsibility, and this can be hard to deal with.
It’s best to develop routines and practices around organization. Set alerts or reminders on your phone or computer of things to do. Write or type out a schedule for yourself. Make detailed to-do lists for big projects. All these small things will pay off on a much bigger scale.
When you transition out of office life and into a work-from-home environment, it can be incredibly lonely. You no longer have fellow employees to chat with over a morning coffee or a lunch break.
Psychologist Dr. Weaver suggests joining “a business group, a local chamber of commerce or a CEO roundtable or group of colleagues that are in the same environment.” You can find such groups easily on social media. This is a great way to stay connected to others, allow for safe socialization and even network in the process!
The change from a traditional nine-to-five to a freelance lifestyle can be daunting, but we hope this advice will help guide you on a path to success!
To a Richer Life,
The Rich Life Roadmap Team