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The following excerpt is from Shelby Larson’s book Moonlighting on the Internet. buy It Now Amazon | Barnes & Noble | iTunes
Shelby Larson presents the most reliable and proven ways to create an additional short-term paycheck and establish a continuous source of long-term income with your own website. In this edited excerpt, Larson explains the pros and cons of freelancing as a business.
Although Dictionary.com defines a freelancer this way:
Freelance: Person who works as a writer, designer, interpreter or the like, selling work or services by the hour, day, work, etc., rather than working on a regular salary basis for one employer.
I simply define self-employment as the sale of your own skills with no connection to a company in complete freedom to choose what, who and how you want to work with your clients. In a nutshell, freelance work earns income with your own skills. Freelancing is ideal if the idea of working for yourself resonates with you and you have marketable skills that are frequently in demand.
Learning how to be successful online as a freelancer is one of the quickest ways to start making money online. This is especially true if you have a commonly sought-after skill set such as writing, graphic design or technology-related skills such as website development or computer programming. However, if you are reading this and don’t think you have a specific skill set in demand, hang in there: becoming a virtual assistant may be fine for you.
Before you can decide if this is the right path for you, review the following list of pros and cons of being a freelance writer.
Low cost start-up. Freelancing is one of the cheapest entry points. There are ways to literally get started with little or no money.
The market is massive and growing. Over 53 million Americans are self-employed, according to a new historic survey by independent research firm Edelman Berland and commissioned by Freelancers Union and Elance-oDesk. This represents 34% of the total workforce.
Location independence. You can literally live almost anywhere you want. As long as you can connect to the Internet with a reasonable frequency, you don’t have to live in a particular place.
Choose when you work. You are in control of your schedule. Do you only want to work from 7 a.m. to 10 a.m. every day? Do you work only on Tuesdays and Thursdays? As a freelancer, you can set the schedule that suits you and keep the commitments you make to your client.
Choose your customers. You can choose who you want to work with. When you work for a company, its customers are their customers and you have to work with them. However, when you work freelance, you have total control over who you work for.
Choose your projects. You can choose the type of projects you are going to work on. If you have specific types of projects that you enjoy doing or certain niches that you prefer to focus on, you have all the freedom to get there.
Better income potential. As you build your reputation and your portfolio / history of successful projects, you have more opportunities to charge more money. Price is a tricky thing, and it can take time to find the balance between when and how you can charge more, but the silver lining is that it’s in your hands. You don’t have to wait for an employer to notice you, appreciate you, and pay you for your great work.
Try before you buy. A huge advantage of freelancing is that because the entry barrier is so low, you can really dip your toes in the water and see how you like it before investing a significant amount of money and time to make it a more serious path for yourself.
Inconsistent income. Unless you add a recurring model that makes sense in your freelance business, your income can be very inconsistent, especially when you’re just starting out. Sometimes the work is regular, but you often find yourself in cycles of what looks like a party or starvation.
You are work. Your monetization depends entirely on your work. When you are independent, you sell your own services. So if you decide to go on vacation or take a leave, your income stops.
Lead acquisition is on you. Until you have acquired a reputation that brings in repeat business, you have to go out and fish for each customer. Part of not working for someone else is that no one else is nurturing you from leads.
Lower income potential. What? But I just mentioned “higher income potential” as a pro! That is true. But this follows the theory of “opposition in all things”. Just as there is potential to make more money in freelance, there is also the potential that you will make less money. As mentioned above, incoming work is not guaranteed. Plus, lead acquisition skills don’t come naturally to everyone, and if you’re not careful, you could unintentionally trap yourself at an hourly rate below what is desirable.
No traditional benefits. When you are self-employed, it does not come with health insurance, a 401 (k) or a human resources department to help resolve staff disputes.
Commodity complications. If you are not intentional to prevent your services from being bundled as merchandise, you could find yourself in a situation where you work very hard and are paid too little.
As a freelancer, you get all the advantages but you also get all the disadvantages. Whether your trip is pleasant or difficult or a little of both, you get all the ups and downs. You can live the dream of being your own boss, but the reality is that sometimes your boss is a huge, incompetent idiot.