The pandemic has removed the barriers of geographical location and the requirement of being physically present at the office. While this is the new normal, it has also allowed several people to consider freelancing. A freelancer is someone who is self-employed and who does not necessarily work with a single employer. This means you get to work with multiple clients and make money per job. Let’s learn more about the things you should consider before you jump into freelancing.
Types of freelancers
Not all freelancers are the same and you must understand the differences before you become one. There are five different types of freelancers.
- Independent contractors: These freelancers work based on a project, and they do not have an employer.
- Temporary workers: They also work project based but do have a single, temporary employer.
- Moonlighters: They are freelancers who take up freelancing work besides their day job.
- Business owners: Freelance business owners have a small team but work as a freelancer.
- Diversified workers: As the name suggests, diversified workers have different sources of employment, and they often mix freelance with traditional jobs.
Five important things a freelancer needs to know
There are some things every freelancer should know. Let’s take a look at them.
- Freelancing is not a one-time project
Small businesses hire freelancers for short-term projects when their staff does not have the time to handle them themselves. Some entrepreneurs build everything for their business with the help of freelancers and then manage the business on their own. You need to keep in mind that freelancing is not limited to one project, and you will have to keep looking for clients consistently. Look for long-term freelance positions or have multiple clients to work with so that you have steady and ongoing work.
- Understand your tax liability
If you are an employee, your employer will have the tax forms ready for you but as a freelancer, you need to understand your tax liability and fill out the right forms on time. When you work as a freelancer, you report your income on a 1099 Form and it should be provided by January 31. You need to fill out the appropriate details and send a copy to the IRS. The majority of the 1099s should be filed with the IRS by the end of February if you send them by mail or by the end of March if you e-file.
- Rejection is a part of your job
Freelancers often work with different clients at a time because there is not enough stability. This means you will have to consistently look for work and your clients will change from time to time. A company’s need to employ a freelancer will depend on their budget and work so you will often face rejection and you should never take it personally. You need to be cozy with rejection and accept it as a part of your job.
- Clients may not pay on time
Whenever you decide to leave your full-time job and start freelancing, you need to understand that your clients might not pay on time. Always have contingencies in place. There are laws to protect you and you must be aware of them but always remember the standard 30-day cycle. If you take larger projects, ask for an advance, or request a deposit upfront. It will reduce the risk of not getting paid.
- It can be lonely
While freelancing is fun and you get to choose your own work hours, it can also become very isolating at times. You do not have colleagues to talk to or anyone to go to for advice. You might get used to working by yourself, but it will take time. The start might not be easy but if you keep going, you will enjoy the journey.
Advantages and disadvantages of being a freelancer
Advantages of being a freelancer
- You get to be your own boss.
- Choose your own working hours and work from wherever you want.
- You do not have to commute which helps save time and money.
Disadvantages of being a freelancer
- You do not get employee benefits
- The work can be unreliable
- You could feel isolated when working by yourself.
Freelancing is easier said than done. Once you start, you understand the amount of time and effort you need to put into it. But if you work hard, you also reap rewards and with time, you will learn to enjoy the process of working for yourself.