Should You Freelance in a Recession?
Posted May 8, 2009 in Business, Lifestyle 26 Comments »
Most economists have decided that the United States and even some European countries are in the midst of the worst recession in decades. No matter what you want to call our current economic situation, though, almost everyone agrees that these are difficult economic times.
Many workers are facing the loss of jobs or underemployment with a subsequent cut in income. Many current freelancers are seeing their income from client projects dwindle. Many others wonder – could freelancing be the best solution to my financial problems?
I have to admit that freelancing has been good to our family. Freelancing gave me the flexibility to be at home when my children were young. Freelancing allowed me to be available for my sick father before he died. Freelancing provides our family with a nice amount of money each month to add to the family budget.
Is freelancing the best solution to your financial problems? Should you freelance in a recession?
The answer is not simple. Whether or not you should decide to start or continue in a freelancing business in the current economy depends on many factors. The best answer to the question of should you freelance in a recession is this: it depends.
With this answer in mind, I’ve come up with two lists of questions that may help guide you in deciding whether or not freelancing in this economy is for you.
The first list is for those who have never freelanced before. The second list is for those who are currently freelancing.
Should You Start Freelancing in This Economy?
- Do you have a marketable skill?
- Do you have access to the proper equipment and tools to exercise that skill?
- Do you have a set amount of time each week that you could dedicate to freelance projects?
- Are you comfortable with promoting (basically selling) your abilities?
- Do you have enough discipline to work unsupervised?
- Are you well organized?
- Do you have savings? (Particularly important for those considering full-time freelancing)
- Do you have a means of providing yourself and your family with benefits such as health insurance? (Particularly important for those considering full-time freelancing)
Should You Continue to Freelance in This Economy?
- Is your current freelancing income meeting your expenses?
- Do you have a “pipeline” full of potential clients, or have your leads dried up?
- Do current clients seem satisfied with your work and are they willing to recommend you to other clients?
- Do you have savings for the lean months?
- Do you have a means of providing yourself and your family with benefits such as health insurance?
- Are your work equipment and tools up-to-date?
- Are you happy with the freelancing work that you are doing, or does each project leave you feeling drained?
- Does freelancing make you feel lonely, or do you thrive in a self-driven environment?
A Few More Points About Freelancing
Many people look at freelancing as an either/or commitment. Either you are freelancing or you are an employee.
Nothing could be further from the truth. Outside employment and freelancing are not mutually exclusive. If you have enough time to dedicate to your freelance projects, you can work for someone else and still take on freelance projects.
Furthermore, freelancing is fluid. That’s one of the great advantages to a freelance lifestyle. It’s quite doable to spend time freelancing, move to a full-time job, and then move back to freelancing when it suits you.
In closing, I’d like to add this: the dynamic of freelancing in a troubled economy can be completely different than the dynamic of freelancing in a booming economy.
Share Your Thoughts
Have you recently turned to freelancing on a full or part-time basis? How is your freelancing business doing in this economy?
What questions would you add to the lists above?
Image by Ed Yourdon
About the author: Laura Spencer is a freelance writer from North Central Texas with over 19 years of professional business writing experience. If you liked this post, then you may also enjoy Laura’s blog about her freelance writing experiences, WritingThoughts
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26 Comments
Totonowe
May 8th, 2009 at 10:01 amgreat timing! It is exactly what I have been considering recently. Times are tough and I do not see the situation to improve much in next months. Definitely a thing to consider is – how long can I stay with NO income whatsoever. For situations that can always happen – I mean a serious slowdown – I calculated the worst-case scenario plan: if I approach a certain, assumed amount of savings left on the bank account and for the last 5 months there is no satisfactory income I have a B plan on hand – get back to looking a full time employment. Fortunately I haven’t faced a situation when plan B has to be implemented but who knows. Cheers!
Colin Wright
May 8th, 2009 at 10:11 amI think that a lot of people who wouldn’t consider themselves entrepreneurs are beginning to think of freelancing as a viable business option. You’ve given them a good list of things to consider here!
Jessie F.
May 8th, 2009 at 11:17 amColin, I agree with you. According to another blog I read, consulting firm, Human Resources, Kelly Services, states 26% of the U.S. population are in positions where they find themselves freelancing. Freelancing is the new “full time” and with the way the economy is going, these questions here are questions that potential freelancers should ask themselves. I want to be able to have at least a few projects going at a time, like having some websites built through Vois.com so that way I can use them in the future as my freelance work, if that makes sense? Thanks for the tips.
Frederick Pohl
May 8th, 2009 at 11:30 amOne question that I would add is – What steps can I take to improve my current situation or reach goals ?
Trisha Bartle
May 8th, 2009 at 12:59 pmYeah, I agree with Frederick. How can we improve our freelancing situation?
I’ve heard of some freelancers actually thriving now that the economy has gone bad. They have more clients than they did before.
Now, I just need to become one of those… ;)
Laurie Phillips@The Dead Company Club
May 8th, 2009 at 1:54 pmI’ve had to change my behavior to keep freelancing successfully in this economy: market more, try some new offerings, get beyond my “social” comfort zone. I force myself to do these things before anything else each day.
For me, I can’t freelance part-time. To do it right I need to be working all-out, especially now. The threat of having to get a job is great motivation.
Troy Peterson
May 8th, 2009 at 3:52 pmI’m on the “working full time while freelancing” boat right now. However, I’ve been actively moving towards the freelance direction as a full time position. The biggest hurtle (or fear) is health insurance… I haven’t been able to find anything under $900 a month for my family!
What I’ve found is that in an uncertain economy, more companies are willing to hire freelancers rather than full time people.
It provides them with the flexibility to change to a very uncertain market.
I’ve actually had to turn away a lot of offers for more work, simply becuase I don’t have time right now.
Aleksandar Optimizacija
May 8th, 2009 at 5:00 pmI started with full-time freelancing just when this crisis started. I weren’t aware of all problems and challenges I’ll have on that new road. But here, 7 months later, I’m happy I made that step. And I see this lists, especially “Should You Start Freelancing in This Economy?” can be very useful for future freelances, especially now in crisis.
Solomon
May 9th, 2009 at 7:02 amI took to freelancing for the freedom and the felicity of time at my hand. But, Eversince I did, the thought of leaving a full time job never stopped coming to my mind. But, we need to slog for something to become something. I thought I’ll learn on the job and jumped at it. Hence I’m here. The greatest secret is to market yourself to people. I’m poor at it. For now.
Thanks for the post!
Laura Spencer
May 9th, 2009 at 9:28 amGreat comments!
In my opinion, making smart choices is crucial in tough economic times. Of course, making smart choices is always important to business success, but when times are tough it’s doubly important.
To that end, I would say this: read all that you can and learn all that you can. Listen to others ideas. Laurie and Solomon have posted some good suggestions here.
Anne
May 9th, 2009 at 11:36 amAnother great article Laura – your list of questions are spot on. It is a big decision to dive into full-time freelancing as opposed to being paid a monthly fixed salary by an employer, especially when the money earned in freelancing is meant to pay the rent, feed the kids etc. The other point to keep in mind is that freelancing does not bring money in right away – it is a process – you have to literally build your business from the ground up.
Nikhil
May 9th, 2009 at 12:27 pmNice list to be considered,
The recession has hit freelancers but I don’t think that the no. of freelancing work is reduced. Ya the price of the work may have reduced than that in non-recession period. That means you have to offer more for less amount.
JR Moreau
May 9th, 2009 at 3:03 pmI’ve been planning on becoming a full time freelancer for approximately 2 years and have finally found myself doing full time work while still maintaining a full time job. I haven’t left my full time job but have been able to balance both quite well and my clients have been pleased with my work and availability even with my alternative working hours.
I look forward to freelancing full time, but I also think that dabbling in both a full time job and freelancing has tempered my expectations and skills well.
MAB
May 9th, 2009 at 3:08 pmLet me confirm that freelancing can dovetail nicely with a full-time gig while one considers diving entirely into the freelance life. It gives one the opportunity to identify and secure clients with the safety net of a steady paycheck and health benefits. An employer may subsidize training and new skills, which can be reapplied to a freelance sideline. And, of course, the extra money can support projects that may have seemed out of reach on your annual salary — home improvements, investment in education, a leave of absence to travel, preparations for full-time freelancing. With realistic time management, it is possible to “serve two masters.”
Thiago Cavalcanti
May 10th, 2009 at 11:39 amI’ve found that this so-called recession is the best thing that could’ve happened to my freelance business. Just about every client meeting I go to seems to be about acquiring an “edge” so that when this whole thing is over they can be in a better position then the one they were in before. I couldn’t be happier with the way the things are going.
Cheers.
Nicole Dyess
May 10th, 2009 at 12:37 pmI am an engineer by training, but a writer at heart, having taken my first class on freelancing when I was in the fourth grade. So, when my doctors finally gave me a clean bill of health in March–after two years of disability in the prime of my career–and I found no employer willing to bet that I would not relapse in the next year, I turned to freelancing. More than 80% of my responsibilities as an engineer were communicating the technical “stuff” to non-engineers, and frankly, I’m good at it!
In the six weeks I’ve been doing this, I’ve contracted for more than $30,000 worth of projects all in one area: Proposal Writing. As an engineer and project manager working for others, I had a 30% success rate in winning proposals at all levels (Federal, State, Foundations, VCs, etc)–an excellent statistic among grant professionals–and, it has opened doors in this economy like nothing else!
Two recommendations: 1) Be very knowledgeable about how to find the grants you think your potential client could win–you create a win-win for both yourself and the client if they agree to go after these monies, and (hopefully) become a trusted advisor; and, 2) Be able to talk knowledgeably about the American Recovery and Reinvestment Act of 2009 (ie, where the money is going) and how to become certified as a government contractor. This will improve your client’s confidence in you as a grant professional in the current market.
Harry Cunningham
May 10th, 2009 at 8:32 pmMe too, Thiago. I had one job cancelled because it was being paid for by a corporate sponsor who pulled out but otherwise business is good. The newspaper I work for has laid off staff but still has to produce a paper every day so they call me because they know I’ll deliver on brief and on time. A copywriting client is doing a big revamp to meet the new market conditions and a long lost client has just popped up again. I thought I was going to have to start marketing aggressively but so far so good. Freelancing rocks!
Venkat
May 11th, 2009 at 1:32 amGreat questions for freelancers/to be freelancer to ask themselves. I agree with Nikil, definitely the rate has been reduced other than that i used to get requests for proposal, but know I’m approaching clients with proposal. :)
kate james
May 12th, 2009 at 5:40 amYeah very nice questions for free lancers .. i totally agree with Thiago…keep it up !good work
Priya
May 18th, 2009 at 5:17 pmIs it not a really difficult time for freelancers. As there are many people who have lost jobs in this economy and the competition is tough. Not only that, I have seen that freelance job pay rates have come down too. Wouldn’t it affect your decision too?
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