Freelancing is quickly gaining popularity, with over 50 million Americans currently engaged in the practice. The extent that people freelance vary: some are 100% self-employed while others still hold regular office jobs while doing part-time gigs when able.
It’s projected that this labor trend will continue, with about half of America’s workforce freelancing within a decade.
Before you jump into the bandwagon, here are some important things you need to know and consider about the freelance life.
What is Freelancing?
So what exactly is freelancing? How is it different from being a telecommuter or a contractor? While all of these words refer to non-traditional work setups, they do have crucial differences.
A contractor is almost synonymous with being a freelancer, but they usually work long-term for a single client. Take note that being a contractor may have different tax implications in certain countries. Also, this term is also more commonly used in the construction industry.
A telecommuter is someone who works away from the office, usually at home or in a coworking space. This arrangement has become more popular, thanks to easy Internet access. However, a telecommuter is not synonymous with being a freelancer since the former can still be employed by a company.
A freelancer is a self-employed professional who provides specific services to clients. Freelancers can work with any number of clients, including both companies and individuals. They often connect through a third party like an agency or shared economy platforms (Upwork, Mechanical Turk, Fiverr, TaskRabbit), usually for a part of their pay. Other freelancers choose to work directly with clients to get the full amount.
Businesses can hire freelancers for almost any type of service. These include:
- Backend services like project management, accounting, and virtual assistants
- Frontend services like marketing, public relations, sales, and customer service
- Content creation like writing, graphic design, and editing
- Tech services like IT, web development, SEO, cybersecurity
- Human resources like recruitment, training, or coaching
A lot of freelancers start by being generalists, like the ones I’ve mentioned. Some prefer to work in certain industries like education, real estate, or nonprofit. Others choose to focus on a niche like courtroom/legal transcription or e-commerce web design.
Highest Paid Freelance Jobs
Here are some statistics I found online:
- Freelance coders and software developers earn up to $1,000 per hour.
- Freelance copywriters earn over $250 per hour.
- Junior software developers earn a base salary of around $119,000 while senior software developers earn around $150,000.
- Freelance graphic designers earns more than $85 per hour on major freelance sites such as UpWork and PeoplePerHour.
How much should you expect to earn as a freelancer?
It’s a great time to be a highly skilled freelancer. The number of people earning $100,000 or more in the U.S has grown by about 70%, from 1.95 million in 2011 to 3.3 million in 2018, according to a research from MBO Partners,
However, don’t expect to be a 6-figure freelancer overnight. The amount varies widely, depending on your skill and experience. Another factor is your target market since some industries have bigger budgets than others. If you have skills that require specialized training, like bookkeeping, website development or social media marketing, you could expect a higher rate than someone who offers typing or transcription services.
The competition is fierce, so you have to be honest with yourself about identifying your skills. What are you really good at? Are you better than most people in a certain skill? Are people willing to pay you for that skill? If you’re not satisfied with your answer, don’t lose hope. Many of the high demand skills can be learned online for free! I’ve compiled a list of high demand skills and the resource on where you can learn them (click here).
Why You Should Be A Freelancer
When you’re a freelancer, guess who’s the boss? You are. Not only that, you get to work in the comfort of your home and skip the long commute, all while earning a respectable income.
Still not convinced? Here are more perks:
- Flexible work hours. You can choose to work full-time or part-time; day, mid, or night shift; or even work more hours if you need the additional income.
- Location independence. If you love to travel, go into freelancing! In most cases, freelancers can work from anywhere as long as they have a stable Internet connection. That’s probably why some freelancers have also adopted the moniker “digital nomad.”
- Autonomy. Say goodbye to micromanagement. Since you’re an independent contractor, not an employee, you get to say how you get the work done. Of course, the final product has to meet your client’s expectations.
- Fair compensation. Freelancers get to set their own rates, and they usually earn more than employees. There’s no need to wait for a promotion or bonus, as you can raise your rates any time you want. However, make sure you include your business expenses (especially taxes) when determining your rate.
- Easy startup costs. Unlike a traditional business, you don’t need a lot of capital to start freelancing. What you do need are sellable skills, basic equipment (depending on the service offered), and the proper mindset.
- High demand for your services. More and more businesses are hiring freelancers since it’s more cost-effective than getting full-time employees. Since they don’t need to shoulder benefits, companies can pay freelancers a higher income without affecting their bottom line.
- Choice of clients. Beginners often grab the first paying client that comes along, but it pays to be picky with your clients. As a freelancer, you can choose who you want to work with, so no need to live with a client who’s demanding or impossible to please. Freelancers can fire clients too.
- Tax benefits. In some countries, tax laws favor self-employed individuals. For example, the IRS in the US has different rules for independent contractors (read: freelancers). One rule is that the IRS allows freelancers to deduct unreimbursed business expenses, a perk that employees don’t have. This means less taxable income. Take note that you should consult a tax professional in your area to check if this applies to your situation.
- Better work-life balance. Having flexibility when it comes to how, when, and where you do your work is one of the top perks of freelancing. For one thing, it allows you to give more time to things that make you happy, like relationships or travel. Plus, it lets you balance both personal and professional goals without sacrificing one for the other. What’s not to like?
So, you want to enjoy the benefits of being a freelancer and start your own freelancing business? Download my free ebook on the 6 proven steps to land your first client as a freelancer (click here).