Working as a freelancer is an excellent way to start a side business, but it can be hard work to get going. Is that hard work worth it? In this article, we’re going to cover the Advantages and Disadvantages of Freelancing.
People who freelance are essentially self-employed and can work for several clients at any given time. They also benefit from being their own boss, the opportunity to reap financial rewards, set their own schedule, and decide when and how work is carried out.
A freelancer is subject to the same tax rules as a self-employed person. The only difference between the two is that a freelancer tends to offer a service within an established market where businesses tend to focus on meeting the needs where a gap exists in the market.
While freelancing sounds very attractive, it is not for everyone.
To judge if this is the right path for you we have compiled a list of advantages and disadvantages of freelancing to help you decide.
10 Advantages of Freelancing
1) Becoming a Freelancer is relatively fast and easy to get started.
If you already have the skill and you plan on offering that skill as a service to potential clients, then it is quite fast to launch your freelancing career. It essentially involves you finding and attracting clients.
It can slow things down when you do not have the right skill a client is looking for. It is not impossible but just requires a little extra work and learning beforehand. You would be surprised at how little experience you actually need to get started as a freelancer. By looking at the skills you have listed on your resume, you can find one that you can offer clients.
If you have established a good connection basis on networks like LinkedIn, then this is a tremendous benefit when you begin your freelance journey, by making it easier to find potential clients. It is not only important for attracting clients, but this network is a great way to get the message out there that this is what you do. The LinkedIn network can further give you the support and help you may need along your journey,
Having your own website where you can build up a list of clients is a great way to build a network too. If you do not have a website and can’t afford to have one built initially, LinkedIn will give you the ability to get your freelance career off the ground until you can get your own website.
One of the most important things in freelancing is your network. From the onset, if not before, build your network. It is also important to have contact with other freelancers. This is great for advice and support. They can help you with questions about the price to charge for your service and where you might find clients. They will also be able to give you advice, support and their own personal stories and experiences. Attend events, professional associations and conferences. This is a great way to build and establish relationships.
2) Many Freelancing careers are relatively affordable
Many freelancing ventures will have a relatively low, or zero, required initial investment. If you already have the service or skill you are going to offer clients, then there is a good chance you already have the technology, software, equipment etc. necessary to offer the service.
If you are a developer you will be able to build your own website to start attracting clients which will significantly lower your costs.
3) The increasing need for Freelancers
There has never been a greater need for good quality, reliable freelancers. With the current economic climates, many businesses do not have the means to carry as many staff as they once had. As a result a lot more tasks and activities are outsourced to freelancers.
Businesses are seeing the benefits of remote workers when they need a project completed. This is the best time to start taking advantage of this and building relationships with the companies that run in this way.
4) Freelancing can allow you the freedom and flexibility
You are free to decide your own schedule; when you want to work, where you want to work, carry out the work as you see fit, etc. This is a major bonus to being a freelancer. When employed by someone else, we do not have the freedom to decide when to come to work and what we will work on each day. Freelancers are more independent than employees. We work according to someone else’s schedule and whatever projects they assign us. Working as a freelancer, allows us to decide that schedule.
If you have enough stable work, you can decide which clients you would like to work with. At the beginning this is trickier since you will need to hustle in order to land clients and build your network. But as things become more stable you can decide which clients and projects you would like to work on. If you enjoy working on more than one project at a time, you can. If you want to do different more diverse tasks you can opt to do so.
5) Freelancers operate on their own terms
One of the best things about being a freelancer is that you don’t have to answer to a boss. You are not being micro managed. You have all the control and make all the decisions. There’s no more working in a cubicle or sharing an office. You don’t have to be concerned or worried about who is looking over your shoulder.
Other than your clients, you will not have to answer to anyone else. This means that you can work on the terms you decide. So you can decide what hours you work, when you start each day, whether you can finish early on a Friday etc. Being a freelancer gives you more flexibility when agreeing terms and conditions with your client.
You also get to design your work environment the way you like it. You can play the music you want when you’re working, drink as many cups of coffee as you like, take your lunch when you feel like it. You can choose to work in different rooms each day etc. Freelancing allows you complete control over your work environment.
6) Work-life balance
Freelancing means that you can enjoy a better work life balance. It ultimately enables you to spend more time with your family and less time sitting in traffic and commuting. You can decide where you want to carry out the work, whether sitting in a coffee shop or in a park. You can travel and work at the same time. If you want to sleep in until noon and work into the night, it’s your choice. You can decide when you are most productive and then design your working life around that.
You can design your work-life to match your needs whether you would like to work part-time hours or fully maximize your freelancing potential. The choice is yours. It allows you that flexibility to attain the style of life you want to live. Attend those meeting or appointments as you need. Because you can decide your work hours, you are free to schedule your work projects as you see fit.
7) Higher income potential
Freelancers have the potential to earn a higher salary than they would earn in the same place of employment. It is not uncommon for freelancers to earn at least three times more than that of their employee counterparts – if not more! Your rate is not set by a boss, you have the power to decide the rate you change the client.
If your work is good, high quality, and meets the needs of the client you can charge them a fee representing that value. This means your income no longer depends on getting a raise from your employer. You have control over your income. If you feel you need to charge for your work, then you can raise the price.
As a freelancer you can also work on multiple projects at the same time, provided you can do so without jeopardizing quality. This allows you to maximize your income.
The type of skills you cover and the level of competition can play a huge role in determining the fee you charge clients. If your skill is highly valued and there is little competition, you can command a higher price and get higher profits.
Being a freelancer provides you with the opportunity to benefit from the profits. You can use them to expand your business or as you see fit. It also provides you with the motivation to go out there and give your best, as the rewards will be yours and not your boss’s.
Being a freelancer is essentially the same as running a business. It is exciting and challenging at the same time. It will give you the opportunity to really learn every aspect involved in running a business. You will be responsible for everything; not just the projects you work on. You will be in charge of money, attracting clients, financials, and managing the overall running of your freelance business. This added responsibility can have a rewarding and motivating effect on an individual.
For a freelancer, there is a direct link between work effort and reward which is not always the case for an employee.
9) Skill development
Freelancing gives you the opportunity to learn more skills or develop your career in a way that suits you and your needs. Your skills and abilities will broaden and develop as you work for more clients and different companies. This will enable you to build a unique skill set and give you more opportunities to attract new clients and perhaps enter new industries.
Working for many clients gives you the opportunity to broaden your reference base and expose yourself to new opportunities and experiences. This will further develop your skills and make you more attractive to potential clients.
9) Disadvantages of Freelancing:
1) Freelancing can take some time to build a client base
Building and growing your clients to the level necessary to support your needs or family, can take some time. It will need a lot of work and networking to get yourself known within the industry.
The demand for your service will ultimately depend on your skills. Depending on the skills, a change in that industry may alter the demand for your service.
2) Freelancing work can be irregular
There will be periods of ups and downs, making it difficult to sustain a regular cash flow. Your workload will, at times, be sporadic, so too will your income. This makes it somewhat more difficult than receiving a regular paycheck from your boss. You need to take risks and not be overcome by stress. It is quite stressful at times so it is important to know your limits and make sure that this lifestyle is for you.
However, it is possible to manage this by preparing for slow periods. Budgeting for the hard times will be essential. Not to mention, being ready to work hard during the busier times and maximize the benefits. It is possible overtime to expect when your payments from clients will actually come in.
3) Freelancing will require you to be very organized
When you have multiple clients and projects you will need to be super-organized and well able to manage your time. Time management skills are essential when it comes to delivering quality work to meet deadlines. You have to have effective contracts and paperwork in place. You need to keep on top of your work and make sure that you are being effective. You also need to keep in mind that along with your other responsibilities, you will also be in charge of customer support – which can often be time-consuming. Freelancing will need self-discipline and motivation.
Freelancing requires being able to work under pressure and meet deadlines. You have to be able to follow-up on work as well as ensuring that clients pay for that work. You will also need to fit in time for marketing, advertising, legal work , sales and financials etc. There is plenty of software, both free and premium, that can help you stay on track, organized, and manage your social media more effectively.
It is also important to make sure that your work is also off quality. As there is no one watching over our projects or supervising our activities, it is easier for us to become complacent. This can result in missing deadlines or producing work that is less than adequate. It is very important to avoid this as it will damage our reputation and potential to attract future clients.
4) Pay may be lower than expected.
Due to the sheer amount of freelancers out there, competition is high. In order to get noticed, it’s helpful to charge a lower price. While this is a good way to attract clients, in the long-term it is not practical. Therefore, if you intend to use a low price strategy make sure it is a short-term plan and then seek the relevant price for the quality of the work provided.
In order for an effective freelance career, you have to earn more than what you would have earned in your job. When you are a freelancer you lose out on the employee benefits you would have gained through employment such as sick leave, holiday pay, pension etc. Therefore you need to factor this into your target income. Not to mention all the costs that you will incur as part of your freelance business.
How much more you need to earn will vary. It will depend on your own circumstances and what you would like to make, but normally twice or more of your old salary is enough. So this means taking your previous salary and multiplying it by 2 or 2.5 for example. The intention here is to generate a return that will compensate you for the expenses you incur in running your business and the employee benefits you lose out on.
Being your own boss and working from home can have some bonuses, however, it can also make things difficult. There will be distractions and other things that we could be doing instead of working on projects. There will only be ourselves to keep us on track.
Working from home makes is easier to get caught on a personal call with a friend for hours or just stick on the tv in the background and before we know it an hour has passed and we haven’t done a tap. Or friends calling around because they know that you are always at home.
6) Personal Time
On the other hand, when working from home, it is very hard to switch-off. You can spend all your day working on your freelance business and when you sit down to watch tv with your family you take out your phone or laptop and do more. Working for yourself can sometimes make it difficult to distinguish between work time and personal time. It’s easy to get sucked into working all the time because the line between work and home is so thin.
As a result your personal time suffers. When trying to set up your freelance business it will undoubtedly need a lot of work and effort, but it is essential to keep on top of your health as you do so. Taking breaks, resting and enjoying some much-needed personal time is an important way to maintain your health and manage stress as you build your client base.
Separating your personal life and working life is difficult when you essentially wake up in your work everyday.
7) Risk of not getting paid
With any business there is always some risk that we will not get paid for our work and within the freelance industry it is extremely common. This means it is important to keep on top of the clients that owe you money. Make sure to send them the invoice as soon as you have the work completed.
One major disadvantage of freelancing, that is often overlooked when we are considering a career as a freelancer, is isolation.
Freelancers spend a considerable amount of time working on projects alone.
When we are in work there is usually constant interaction with other teammates or lunch time chats in the office canteen, but as a freelancer we are usually working on our own. Our contact with a client is more than often done via email or phone. In this regard it is important that we take time to get outside and take breaks. Keep contact with outside world and look to your social circle for support.
When working alone there is no one to consult with if we have a problem or question. When working for an employer we could always seek advice from other co-workers or managers. However, many issues and problems can be solved by asking questions in a forum about that topic etc or on answer sites like Quora.
While most of the time starting out as a freelancer require little or no upfront investment, sometimes money is needed to buy your own equipment and software if you do not already have it.
Now you understand the advantages and disadvantages of freelancing, you’re ready to decide if this is the right type of side business for you.