By: Amy Do, Career Community Advisor
Freelancers are the leaders of tomorrow! According to Upwork, freelancers have the potential to become the U.S’s majority workforce by 2027. As of March 2019, Google’s workforce has more contractors than permanent employees on their payroll. But what exactly is a freelance worker, and how do you become one? Read on to learn the basics.
What is freelancing? What does it mean to be a freelancer?
A freelancer is someone who is self-employed and does not necessarily have a relationship with any one employer long-term. Freelance workers earn wages on a per-task or per-job basis as opposed to a salary. According to a 2019 MBO Partner’s Survey, nearly 41.1 million Americans identified themselves as freelancers.
How is freelancing different from other jobs? What are the pros and cons?
The primary appeal for freelancers is freedom. Freelancers can choose the clients they work with, have control over their rates, and have an extremely customizable work schedule.
Most freelancers get paid by submitting invoices vs. being on a regular payroll. Being employed on a per-task basis often means being able to work at your own pace, as long as the task is completed by a set deadline. This makes it easier for remote freelancers to travel and work from anywhere. The drawbacks to not being a permanent employee include a lack of benefits such as insurance, retirement contributions, paid time off, or sick leave.
Freelancing can be a competitive marketplace. There are a wide array of freelance workers charging different rates for similar services within the same market, which can make it challenging to find the right niche. For example, a freelance photographer might cost anywhere between $100–$10,000+ per shoot, depending on experience level, type of equipment used, and the concept. Having a polished portfolio of work and being able to market yourself is key to success as a freelancer in any industry.
What are in-demand freelance skills?
Technical skills are highly sought after in the current market. According to LinkedIn News, the most in-demand freelance skills in 2022 include: Website/ Graphic Design, Search Engine Optimization, Copywriting, eCommerce, Data Analysis, and Video Production.
Can I freelance as a side hustle? As a main hustle? What do taxes look like?
Freelancing generally starts as a side hustle to make additional income. Many burgeoning independent workers find clientele through hyperlocal channels — friends, family, and acquaintances are often people’s first clients. Some do pro bono work and document it for their portfolio, then grow their network through referrals or by advertising on local facebook groups or neighborhood bulletins. Websites such as Fiverr and Upwork specialize in helping employers find and hire freelancers.
You do not need to register yourself as a business in order to begin freelancing. The only legal requirement is to pay taxes on any income over $400. The legal term for operating as yourself (instead of as a permanent employee of a company) is called being a sole proprietor. Sole proprietors will fill out either a W-9 form or 1099-MISC if they are employed by a larger company.
When it’s time to report income, the IRS has an entire page dedicated to self-employed individuals. This TaxAct self-employment calculator can be a good place to start.
What if I want to freelance full-time?
If a sole proprietor has established enough of a client base to freelance full time, they may consider registering as a business. Freelancers that make over $100,000/year are entitled to register as a corporation, but the most popular designation is a limited liability company (LLC).
With an LLC, your personal income is protected from liability if you are sued by a client for any reason. Creditors can’t touch your home, car, or personal bank account. Registering as an LLC is a good way to separate your business from yourself financially and legally, and protect yourself in case of legal action or financial troubles.
What other resources can support me as a freelancer?
There is a wealth of information on the internet to support freelancers at any stage of developing their business. Below is a short list:
For DePaul students and alumni, the Coleman Entrepreneurship Center is a great resource. They provide a wealth of opportunities to get into the local community by working with their partner organizations, which is a wonderful way to build a portfolio. They also provide mentorship programs for support and guidance from established professionals. Take a look at their resources page to learn more and get involved.
Freelancer’s Union — “Freelancers Union is the largest and fast-growing organization representing the 56.7 million independent workers across the country.”
The Muse’s Best Resources for Freelancers
Want to dip your toe into freelancing and need support along the way? Already an established freelancer, but want someone to look over your portfolio to step up your game? That’s exactly where we come in. Whether you’re a freshman or a graduate, it’s never too early (or too late) to utilize our services. Book an appointment with Amy, or another member of the advising community through Handshake, or by calling the front desk at (773) 325-7431.