The freelance work marketplace has been expanding like never before. The 2020 Upwork “Freelancing in America” survey indicated that more than 1 in 3 Americans is taking on freelance work - representing incredible opportunities and earning potential for anyone considering taking the plunge. The Great Resignation of recent months is also displaying workers’ interest in prioritizing their own interests and time above that of an employer.
The beauty of freelancing lies in being your own boss but before you quit your job and fly solo, here are some pros and cons to consider. Most of these are subjective but are definitely food for thought.
The Pros:
- Client freedom: You can choose exactly who you work with and how much work you want to take on - no need to suffer through a miserable business relationship or a project you just aren’t enjoying.
- Flexibility: Because you control your clients and workload, you can make your own schedule or take time off as you please to prioritize the things you want to do. If you work best at 11 PM or on a Sunday morning, you can take advantage of your motivation and get things done without worrying about bothering your coworkers.
- No typical office distractions: When you work in an office environment, things like walking to the bathroom, popping out for lunch, or having visitors in your office take up significant amounts of your time when it’s all added up.
- Independence: You don’t have to be tied to a 9-5 schedule if you don’t want to be, nor are you tied to working from one specific location. You can work on a family vacation if need be, or simply bring your laptop to the coffee shop down the street for a change of location.
- Exposure: Taking on freelance clients gives you the ability to work on a wide variety of projects and topics, and to figure out what you really like or don’t like. This is great if you are someone who does not do well in a redundant work environment or thrives with new challenges.
- Fewer expenses: This may look different depending on your industry and how you operate, but many freelancers who have left the 9-5 world find themselves saving money on commuting, parking, childcare, a professional wardrobe, or meals out. Although you may find yourself paying more in taxes, you also have more deductions that you can take advantage of.
- You are your own boss: If you are someone who would rather work independently than in a team environment, you might really enjoy the self-starter mindset you have to adopt in order to become a successful freelancer.
The Cons:
- Taxes: No matter how your employment is structured, you’ll have to pay your share come tax time. What sets freelancers apart is their requirement to pay self-employment tax, which can be discouraging for newer freelancers. When setting your rates, you’ll want to take into consideration any potential deductions you might take or additional taxes you need to pay.
- You have to be your own best advocate: Even if you gather testimonials or recommendations from past clients to lean on, you will often find yourself going to bat for yourself, your rates, and your services in meetings with prospective clients which can be uncomfortable for some people. You’re selling your most important offering: you!
- Lack of benefits: This is one of the most discouraging aspects of a potential freelance career. Many Americans get benefits like health insurance, retirement plans, or other perks through their employer. If you are freelancing full-time, you are typically going to be responsible for finding and paying for your own benefits; however, you can deduct 100% of your monthly health insurance premiums as a personal expense. If you are married or a dependent under age 26, you may be able to get yourself added to your spouse’s or parents’ health insurance plan.
- Inconsistent income: Unless you have acquired a portfolio of long-term, flat rate client unicorns, you are likely going to have difficulty predicting your income from month to month. This can make paying rent or other bills more tricky, and can definitely cause some anxiety about your long-term financial wellness or any goals you have like buying a house.
- Isolation: Just as some might thrive in an independent work environment, others might miss the casual camaraderie of having coworkers and feel lonely. It’s going to be important to still take advantage of social opportunities be it in real life or via Zoom. Joining and working from a coworking space is a good idea if you are interesting in mimicking that office environment.
- Work-life balance and time management: This especially rings true for parents with children at home. It can be hard to manage caregiving responsibilities at the same time you are supposed to be working, plus it can feel difficult to “shut off” at the end of the day when you work from home.
- You are your own boss: This is often a pro and con for many freelancers. You’ll need to make every decision associated with your business, such as how you’re going to manage your clients, how you are going to invoice and collect payment, how you’re going to promote your business, and more. There is likely going to be a pretty significant learning curve as you figure out the roles and responsibilities usually held by your colleagues in an office environment.
The wide world of freelancing represents so many opportunities and so much earning potential for those willing to take advantage and jump in. The beautiful thing is that it doesn’t have to be a forever decision; you don’t even have to freelance full-time.
You can test the waters with just a few hours a week before going full-time, or you might go full-time for a few years and then decide to return to the workforce.
Whatever you are looking for in the workplace, a freelance career might help you find it!
You can test the waters with just a few hours a week before going full-time, or you might go full-time for a few years and then decide to return to the workforce.
Whatever you are looking for in the workplace, a freelance career might help you find it!
