Zaheer Dodhia, CEO of Logo designis an entrepreneur who has launched multiple startups including ZillionDesigns, PCStore, CashforUsedLaptop
“Economic Downturn”: No matter who you are or what job you do, this is a phrase no one wants to hear. But it is something that needs to be talked about.
While experts are divided on whether a recession is “inevitable,” according to businessroundups.org, one thing we agree on is that there are certainly warning signs, including the ongoing war in Ukraine, inflation rates and high interest rates. All of these and more point to “financially questionable” times ahead. This can be a challenge, even if you have a steady, well-paid job with a reliable, stable employer. Add freelancing or gigging to the mix, and it’s only natural to be a little nervous.
Based on my experience outsourcing some of my company’s internal work to freelancers, and running graphic design contests for freelancer designers, here are five of my tips on how gig workers and freelancers can make sure they be ready for the possibility of economically stressful days to come.
Networking is important for every self-employed person. You never know when you will come across someone who will become your next big client. Reaching out to communities with common interests gives you the best chance to showcase your skills and drum up new work.
The best place to start is with your current customers. Ask them if they would like to send other projects your way. You can also ask for referrals from existing clients by highlighting their happiness with your work. For example: “If you like what I do, I would like to ask you to refer my name to colleagues who need similar services.” Incentivize them to join your network by offering discounts or rewards for sending new customers your way.
Again and again, one of the oft repeated expert suggestions is to avoid depending solely on a single income stream or skill. I would add that gig workers should avoid relying on a single client if possible. When that avenue dries up, you’re in a creek, to mix metaphors.
A good way around this is to remember to take your time and invest in yourself as a freelancer. Teach yourself. Learning new skills. Gaining skills related to the work you already do gives you the chance to offer a more complete package to your existing customers and pick up new ones.
Analyze your skills and determine what other services are complementary to what you do. For example, if you’re a web designer, consider expanding into content creation, social media management, and graphic design. Acquiring these skills requires an investment of time, not necessarily money. Take a free content creation course on YouTube or consider entering a relevant contest, and you’ll have mastered the basics that will help you expand your repertoire.
Prevention is worth more than cure, and good communication is key to avoiding trouble from the get-go, especially when it looks like tough times are ahead.
Set up your cancellation policy now and make sure your customers know what those conditions are. Almost 75% of freelancers said they don’t get paid on time, according to a survey of more than 400,1099 workers by the Independent Economy Council. It can sometimes be difficult to resolve that without legal assistance, but it would be nearly impossible if you hadn’t laid down your terms from the start. Both freelancers and clients are being hit hard by tough times, so it’s important to keep communication open and honest.
On the other side of the coin, make sure you’re protected if something inevitably prevents you from completing your work as agreed. We live in a world of disaster after disaster, so it only makes sense to include this in your contract and communications. At the same time, if you’re willing and able to work with your customers’ needs when it comes to getting paid for what you do, I’d suggest creating a policy for that as well.
Seize the day.
Seize the day. Seize the day. Make hay while the sun shines.
In other words, if a recession hits in the future, take advantage of better times until then. Take on extra work whenever possible. Ask your customers about other projects you could do for them. If you’re developing other skills, now would be a great time to double that and promote your new skill to your customer base. Advance your skills by combining them into salable packages, such as bundling website building with initial content creation.
Diversify your work platforms. If you already find gigs on one platform, create a profile on other freelance marketplaces as well.
In general, now is the time to manage your schedule in a way that maximizes the current economy.
More expert advice: use today to prepare for tomorrow.
From a financial standpoint, it’s pretty common for freelancers and gig workers to have a paycheck to paycheck lifestyle, especially when they first start out. But with an eye to the future, now might be a good time to put money aside. I’ve seen some commentators on the gig economy suggest cutting costs three to six months upfront. Depending on the type of gig work you do, this might not be much if you don’t have a lot of overhead, but you might still find it useful.
You may also consider working with a financial advisor. Investing in tools for your business during financially stable times can help you when tax season arrives, and you may also be able to develop those new revenue streams and grow your business.
Life as a gig worker or freelancer often falls into “feast or famine” territory. It is impossible to say which phase will come next. But looking to the future, gig workers should always plan for the worst and hope for the best.