The world of entrepreneurship is booming. People are moving away from the cubicle life and the 9-to-5 grind in an effort to make it in the gig economy on their own and follow their passion. The fact of the matter is, more and more people are starting an LLC and building their dream. They wake up every morning excited to build their business and help make a difference in people’s lives.
If joining the gig economy in 2020 sounds like something you’re interested in, here's everything you need to know to make the right decision for you and your current situation.
What Is the Gig Economy?
The gig economy refers to independent workers or freelancers who go out and complete short-term, temporary work — or gigs. They are not paid a salary but are instead paid by the project being completed for the client. Some other names associated with the gig economy are temps, consultants and independent contractors.
Has the Gig Economy Changed in 2020?
Before the global pandemic, the gig economy was on an upward trend. Digital nomads were traveling the world while working remotely, and others were picking up side jobs with Uber, Postmates and more. When the Coronavirus hit, many participating in the gig economy found their contracts were cut. Companies had to immediately cut costs. Website Planet reported that 60 percent of freelancers worldwide saw a decrease in demand for their services. And for jobs where demand actually increased, such as food and grocery delivery services, the competition to land the job increased exponentially due to so many being out of work.
While many freelancers were and are having a difficult time finding work, that's not the case for everyone. With businesses trying to cut costs and positions within their company to lean out, they are finding freelancers beneficial because they can hire them to produce results quickly and pay them a fraction of the salary they'd pay a full-time employee. And so many companies have reverted to a fully remote workplace, making them more open to hiring gig workers to complete tasks.
While leaving a secure paycheck to jump into the gig economy is a risk at any time, with the right business plan and execution, it can be extremely profitable and fulfilling. Website Planet also reported that 74 percent of freelancers are optimistic about the future and 53 percent are expecting to see an uptick in the long run.
And don't forget that you don't necessarily need to quit your day job to join the gig economy. You can use the gig economy as your side hustle to bring in some extra revenue.
There are some amazing benefits of freelancing, such as:
Having complete control over your schedule and workload
Choosing who you want to do business with
Setting your own wages
The ability to work on a variety of projects, therefore keeping things interesting
Using your skills to help others solve problems
What Are Some Examples of Freelancing Gigs?
While almost any job can be turned in a freelance gig, there are certain roles that are very commonly found as a contract, short-term roles, making them ideal for the gig economy.
Social media marketer
Eye-Opening Statistics on the Freelance / Gig Market
The statistics below were pulled from Zety and show just how big of a boom the gig economy has been and the direction it is heading in the future. If being a freelancer or independent contractor has been something you’ve been considering, it might be a great time to move forward with starting a freelancing business.
57.3 million people freelance in the U.S. It’s estimated that by 2027 there will be 86.5 million freelancers.
For 44 percent of gig workers, their work in the gig economy is their primary source of income.
For 53 percent of gig workers aged 18–34, their work in the gig economy is their primary source of income.
1 in 6 workers in traditional jobs would like to become a primary independent earner.
55 percent of gig workers also maintain full-time or regular jobs.
The largest number of gig workers (14 percent) find gigs in arts, design, entertainment, sports and media followed by sales and related (10 percent.)
75.7 percent would not quit their gigs for a full-time job.
64 percent of gig workers say they are doing their preferred type of work.
60 percent of gig-dependent workers lack alternative employment because they don’t want or need one.
41 percent of gig workers say they were hired because they have unique skills to complete an ad hoc project.
The number of high-earning independents — those who report earning $100,000 or more and likely work in highly skilled fields — keeps growing. In 2018 there were 3.3 million of them, which is about 21 percent of all full-time independents.
79 percent of full-time independents said they were happier working on their own than at a traditional job.
How Can YOU Become Part of the Gig Economy?
Seeing the growth of the gig economy, you may be feeling a sense of FOMO. It’s okay, you’re not alone. But with that being said, if you want to jump in while the water’s warm, now is the time to take that first step (which is often the hardest). Here's what to do.
Step 1: Figure Out What You Are Good At
What particular skill do you possess? Are you great at graphic design? Maybe you are amazing with words and can write engaging copy? Figure out what you’re good at and double-down on that skill. Spend some time learning more about it so you can work your way to becoming an expert.
If you are currently unemployed, you’re going to want to get up and running as quickly as possible to have a source of income. If you have a full-time or part-time job currently, don’t quit (yet). It’s best to use your current employer as a means to help fund your freelancing business and have a means of revenue coming in to put food on your table and pay your bills.
Step 2: Research the Market
Once you figure out what skill you have that you can leverage in the gig economy, do some research on the market around you or wherever you plan on promoting your business. Who else is playing in the sandbox? What are their products or services? Are there any flaws in their product or services?
How do your competitors operate? Do they lock customers in with an ongoing contract? Do they have upsells? Is it a new market? Is it an old market that could use some new blood with a different perspective? How many competitors do you have in your area? Who’s the top competitor?
Step 3: Position and Differentiate Yourself
How can you stand out from everyone else who’s already operating in the space? Where can you differentiate or separate yourself from everyone else? Are there gaps in the services provided by your competitors?
The key is figuring out how you are going to position yourself and your business to appeal to the market. If you look like everyone else and have the same products or services, you could get lost unless you spend a fortune on marketing. Find points of differentiation and use those to your advantage.
Utilize every tool in your toolbox to show your position. For instance, beef up your resume to make it a little more impressive. Take your social media profiles and make sure you're highlighting your strengths and what problems or issues you solve with your gig. If you don't already have a business website, that would be a great way to differentiate yourself from other freelancers who might not have one. Leverage any and every tool at your disposal. It could be the difference between getting hired and getting brushed off.
Step 4: Determine Your Pricing
While you are free to charge whatever you deem appropriate for your freelancing, it would be wise to get a grasp of what others are charging and align yourself similarly. You don’t want to go too low or people won't think you have much value at that price, and you don't want to go much higher than your competition or customers would look at the price and never leave their current freelancer to work with you (unless you hold a much greater value for the price).
If you wanted to see what others in your field and industry are charging or even what their annual salary is, check out Salary.com as well as PayScale.com. Both of these resources will help you narrow your focus and help you understand what others are making as well as how much you can expect to make based on your particular skill sets.
A key word used above is “value.” You want to focus on this word more than anything else when entering the gig economy. What value can you bring that will get people excited to buy from you or use your services? Remember, price is determined by supply and demand. The market dictates your demand as well as your pricing. Your price is only as good as the customer willing to pay it.
Step 5: Start Your Freelancing Business
Once you’ve done all of the work and decided you have a solid business you can start, the next actionable step is to form your business. You go at this on your own or use a service such as Incfile to form your business.
If you are going at it on your own, you should definitely consider checking out our complete guide on how to start a business so you are certain you aren’t skipping any important steps along the way. If you want more confidence that you're setting up your business legally and in c compliance with your state laws, Incfile's $0 (plus state fee) business formation package will give you peace of mind.
Following acceptance and approval of your business, get any licenses necessary to operate your business. Not all businesses require licenses, but you will need to do your own research or contact your local and state agencies to be certain.
Additionally, you need a marketable business name. Something catchy that also helps people understand the type of business you own. Do you have a name in mind? Maybe you're completely stumped? Check out this great article that provides you with tips and resources to come up with a business name.
Step 6: Find Gig Work and Go Execute
Now for the fun part! Go out and execute! Before starting your business, you looked at the market and should know who your customers are — go reach out to them. Explain what you do, how working with you can benefit them (save money, save time, save resources, less stress, make more money, etc.) and finish with a close to seal the deal.
Be prepared for rejection. Try to understand the rebuttals you are going to be faced with before pitching your business in the gig economy so you know how to react and dig a little deeper with the prospect.
You will get plenty of “no thanks” and “I’m not interested,” but the key is to get to the reasoning behind their answer. Is it money related? How can you solve that issue? Is it bad timing? When is a good time to follow up? Are they unsure of the product or service and say no because they don’t fully understand it? Ask them if there’s anything they have questions about to clear up any confusion or concerns.
If you aren't sure where to start when looking to get hired, check out these websites that are dedicated to freelance work:
Also consider using your online network to get your gig out there and in front of people. LinkedIn is a fantastic website for networking and reaching out to potential clients you could help through your gig. You can also talk to your friends and see if you could get referrals from the people they know.
Jumping into the gig economy is going to be hard, it's going to be stressful and it's going to have you questioning if you made the right decision, but if you stick with it and continually work on your business and make improvements, it's going to be worth it in the end.
Matt Weik is the Founder/Owner of Weik Fitness, LLC and is a well-respected fitness expert/author with a global following. He’s a certified strength and conditioning specialist, personal trainer, and sports nutritionist. His work has been featured in over 85 fitness magazines and over 1,500 websites. You can contact Matt via www.weikfitness.com or on his social channels found on his website.