Realities of Self-Employment: A Look Into the Booming Freelance Market
More and more people are switching from being regular employees to start thier own business and become their own bosses. Last year, there were 59 million people doing freelance work in the United States alone. That number keeps growing worldwide.
As freelancing continues to grow and the freelance market expands, one survey showed that five out of six freelance workers reached their income goals within two years into their career. And almost half (42%) of freelancers who reached their income goals within a year were twice as likely to earn more than $75,000 per year.
Data also show that self-employment is not only highly rewarding for the entrepreneur, but it also benefits the economy. This is evident in that self-employed persons create jobs for many people and earn more than employees working for wages and salaries.
In other words, freelancers today are happy and prospering. And based on those stats and benefits of self-employment, it's safe to say that self-employment and freelancing are a viable career path for anyone with some pertinent skills and business sense.
However, with all of the hype and positive talk about freelancing, is it all too good to be true? Are there stresses and pressures when you're self-employed than what is typically revealed or what it seems to be?
Yes, the realities of frelancing is not all rosy.
The Not So Rosy Side of Freelancing and Self-Employment
Let's take a look at the less glamorous realities of self-employment and freelancing to make things more clear. It's not all rainbows and butterflies, you know.
1. Missed Social Events
One of the perks of being self-employed is that you don't have to answer to and please your boss anymore. But with great power comes great responsibility indeed, because now you have to find a way to please your clients instead.
As a freelancer, you wil have many clients at the same time. And most of the time, they have different ideas and goals that you have to take into consideration in your work.
Unlike your regular job where the work hours are structured and organized, being self-employed means that you have to do the job given to you when it's given to you. This may lead you to work and stay up on the weekend to get a project done, and then start working on the next one. It can be difficult to create an organized and well-balanced schedule between work and personal life.
One self-employed study showed that 22.2% of their respondents miss important social events and occasions a few times a year. It is followed by 19.4% of respondents saying that they miss important events every week, and 18% of them choose working over attending occasions every two weeks. Also, 60% of freelancers regularly find themselves working every weekend or every other weekend.
Although this can be detrimental to one's health in the long run, missing important events and occasions to work on weekends is inevitable for a freelancer. But it is still very important to maintain a balance between professional and personal obligations to avoid the risk of burning out so soon. You also have to communicate clearly with your loved ones to avoid damaging your relationship with them.
2. Unpredictable Income — More So in the Beginning
A stable cash flow is one of the biggest concerns of freelancers. Even though self-employment provides flexibility and independence, it also comes with the responsibility of making sure that you earn enough money every day.
According to another survey, the majority of all freelancers reported that managing cash flow is their biggest worry. It is closely followed by feeling uncertain of the future. Also, 20% of people surveyed stated they experience a struggle in making ends meet.
50% of freelancers over the age of 45 stated that managing cash flow is their biggest challenge. Often, this is because they have invested their money into their business, have families to support, and are near the retirement age.
Managing cash flow for self-employed people can be tricky. This is due to a variety of reasons. Unlike in a regular job where you get a paycheck by the end of the month, there are times when clients do not pay on time. Some materials for projects suddenly might cost more and work can dry up.
To ensure that you are being proactive and not just worrying, learn how to track and manage your income and finances better. This will lessen your worries because you know exactly where your money goes.
You can also implement basic business procedures such as creating payment terms for your clients. They can either pay after the work is completed or you can collect a deposit before starting any work.
3. Longer Work Hours — More or Less
Being self-employed or a freelancer means that while you are working for yourself, you begin to take on a whole load of other responsibilities as well.
You are not only limited to one role anymore but being self-employed also teaches you to be flexible and take on other unfamiliar tasks. This pushes you to work longer hours. It's like being a one-man show, but what happens when you get sick?
Taking a sick leave from work is easy if you are an employee, but things are different for freelancers. Among 500 respondents of a self-employed study, 81% claimed to rarely take time off when they are ill. While 54% of freelancers reported they rarely or seldom go on breaks and vacations.
Since they have to meet strict deadlines and manage their cash flow, it is understandable why almost all of them refuse to take some time off from work. But even if they do go on a vacation, 59% of people say that they are still working.
All the pressure from working or running a business can take a toll on freelancers. They may feel guilty for taking time off. This is why self-employed people are at a higher risk of burning out. But getting sick is natural and something we can't avoid. If you need to get something done, you can outsource other freelancers to complete the work.
It should be our top priority as self-employed business owners and freelancers to take care of our health and personal wellbeing. Although taking care of business is crucial as a freelancer, you should also be taking care of your work's most important resource: YOU.
Ultimately, despite bigger responsibilities and pressures, being self-employed makes you more driven and battle-tested. You gain greater resilience and greater room for growth.
As a freelancer, you learn to adapt to changes and challenges, you work with diverse clients with diverse needs, and expand your transferable skills.
The realities of self-employment and freelancing is that despite all, it is highly rewarding, satisfying, and worth the effort.
Updated: Originally published Oct, 2019.