If you’re like me, you’re probably watching the news about the economy. Unfortunately, a lot of that news is bad (at least recently). You’re probably hearing about layoffs, companies in trouble, people losing their jobs, and to top it all off–prices going up.
As a freelancer, such news probably makes you nervous. You may be wondering if it’s really a good time to be a freelancer. You may even be thinking about returning to traditional employment.
Let’s face it, it’s normal to be a little nervous about the economy right now. This economy has a lot of people concerned…even nonfreelancers.
In this post, I’ll list five economic trends as they relate to your freelancing business.
Trend #1: More Freelancing Gigs
Companies are laying people off, but they still have work that needs to be done. So, how are they going to get that work done?
There are basically two ways a company can redistribute its workload after a layoff:
- Assign more work to existing employees
- Outsource to temporary workers (including freelancers)
While many traditional employees will see their workloads increase as a result of the economy, there’s a limit to how much more work an employee can take on and still remain effective. That’s actually good news for freelancers.
While corporations may not be willing to commit to hiring a permanent employee, many will turn to freelancers (and other temporary help) to complete their current and new projects. In fact, in many cases a company can actually afford to pay a freelancer more money than they would have paid to an employee.
Trend #2: More Freelancers
Another trend I’ve noticed is that the number of freelancers seems to be increasing quickly. The increase in freelancers is coming largely from three sources:
- People losing jobs and jumping into freelancing
- New graduates who give up on finding traditional employment
- Increased press coverage of freelancing
Naturally, some of these new freelancers are quite talented and well-prepared. Those individuals will likely succeed in their freelancing business.
However, due to the economy, a large number of new freelancers are driven by desperation. They aren’t really well prepared to freelance, but turn to it because they believe that it is their only option. They aren’t likely to be happy as freelancers.
When the economy improves, many of the unprepared freelancers will ultimately return to the traditional workplace.
Trend #3: Prepared Freelancers Win
The good news for me and you (and I put you in the prepared category because you obviously want to learn more about freelancing–you’re reading this blog) is that those who are prepared to freelance and who have a strong desire to freelance are likely to succeed.
Sure, some of the other freelancers may get a few gigs. But if those freelancers don’t deliver, they won’t be hired again.
A good, reliable freelancer, on the other hand, has a high value to the companies that they work for. They are likely to find themselves in demand–now, more than ever.
Trend #4: Keep Your Rate Up-to-date
As I noted earlier, consumer prices are rising. That means that it costs more for you to pay your bills.
What it also means, is that it’s very important for you to keep your rates up-to-date. Now is not the time to become the bargain freelancer.
If you haven’t raised your rates in a while, consider raising them as soon as it becomes practical. If you don’t you may find yourself worker harder and harder just to maintain your existing standard of living.
In fact, charging a living rate is one way to distinguish yourself from the freelancing short-timers. Charging a living rate is professional. It means you’re in freelancing for the long haul. The short-timers, on the other hand, are desperate. They may accept gigs for less than it costs them to live, but they won’t be able to keep that up.
Trend #5: There Are No Guarantees
The final point here is an important one. If the economy is scaring you, good. Everyone in business needs to be aware of the economic factors that might impact them.
However, the economy is not a reason to panic.
While you may think that returning to a traditional job is more “secure,” remember that there are no guarantees. Even traditional employees are losing their positions.
In my experience, owning a freelance business is more secure than traditional employment because you’re not tied to a single entity to earn your livelihood. If one of your clients goes out of business, it’s sad and may have a short-term impact on you. But in the long run, you’ll replace that client.
How do you think the economy is impacting freelancers? How has the economy impacted you?
Leave your answers in the comments.