5 Rules for Success in the Gig Economy
Increasingly, people are eschewing long-term, full-time jobs for short-term contract gigs, consulting assignments, and freelance work. I’m one of them. For years, I held a full-time job and took on freelance work on the side. But, that all changed when my husband’s job took us to Germany.
It turns out, I’m not alone. I’ve met independent workers in traditional offices, traveling around the world, typing away in co-working spaces or coffee shops, and even online through 100 percent remote companies.
In fact, the gig economy is expected to make up 43 percent of the U.S. workforce by 2020.
Diane Mulcahy, adjunct lecturer at Babson College, identified this trend years ago. Her course Entrepreneurship and Gig Economy was named by Forbes.com as one of the 10 Most Innovative Business School Classes in the country. In her book, The Gig Economy, Mulcahy draws on the experience of entrepreneurs and shows how gig economy members can develop and apply entrepreneurial skills.
“If we do contract work or consulting, we’re responsible for paying our own taxes, buying health insurance, sending invoices, collecting payments, and managing, tracking, and deducting expenses,” she writes. That’s in addition to the IT, marketing, project management, and HR roles taken on by gig economy workers.
As more people enter the gig economy, there are certain skills needed to spot opportunities and navigate a series of sequential, temporary jobs. Here are five of the most important things to remember if you’re looking to enter the gig economy.
1. Define What You Want
Jessica Lynch, founder of Brightness Consulting, believes the first step to gig economy success is exploring your intentions and answering what you want to get out of gig work. “Do you want this for the rest of your career? Do you want to make money in school? Everyone has a different definition of success,” she explains. “For me, consulting isn’t what I plan to do long-term. I want to remain flexible as opportunities come up.”
For Lynch, her consulting business brings in as much work as she currently wants. She realizes, though, that if she wanted to make it full time, she’d be creating a social strategy, tracking website leads, and advertising, among other business-growing initiatives.
In an interview on the Tim Ferriss Show, Tracy DiNunzio, founder of Tradesy, discussed how people are using work with such companies as Airbnb, Uber, or TaskRabbit to fund startups. Renting their apartment, spending weekends driving, or picking up odd jobs is, for some, a temporary way to fund their goals, whether it’s launching a business or paying for college.
“It’s getting real with yourself about what you want out of your gig,” Lynch sums up.
2. Embrace Your Inner Entrepreneur
As long-term, full-time jobs go the way of the fax machine, seeing yourself as an entrepreneur is critical to survival. “Whether you’re working a ‘gig’ or you consider yourself a freelancer/consultant, you should still consider yourself an entrepreneur,” explains Nicki Krawczyk, founder of Filthy Rich Writer and Copy for Solopreneurs. “If you make your money by providing products or services directly to your target audience, you are an entrepreneur. I think a lot of people do a disservice to themselves by not taking themselves as seriously as entrepreneurs take their businesses.”
I never saw myself as an entrepreneur. That was until I realized I needed to build my personal brand and market my skills even more so than a “normal” worker. How else would I get work? I may not need investors, but I need to rely on my social and professional networks to spread the word that I am available for hire and that I’m good at what I do.
As Krawczyk says, “Everyone—from a ride-share driver to a freelance graphic designer—could benefit by looking at their work through the lens of an entrepreneur, always looking for ways to improve the product, the customer experience, and the way they connect with potential customers via marketing.”
3. Start Small
When I first transitioned to full-time freelance, I’d been building up work on the side while working a full-time job. But, it wasn’t immediately at a full-time level or necessarily with the clients I wanted. However, the extra time allowed me to rebrand, giving my online portfolio a much-needed overhaul and investing my time in areas that would help me score work down the line. Just like launching a small business, I was investing my time and energy in non-money-making endeavors for the long-term gains.
For Lynch, consulting work is allowing her to devote time to her startup, Wish Route, that’s inspired by concepts of the gig economy. “The gig economy gives entrepreneurs more flexibility within their businesses to think more creatively about how to do something more affordably,” she explains. Her startup idea will tap into the expertise of specialized professionals who either already have a job and want extra income or who want to work for themselves. “You can give opportunities to more people,” she continues. “Full-time roles are limiting in terms of skills and location. Maybe, I only need someone super qualified in a specific area for five hours per week. With the gig economy, I can tap into that person’s expertise.”
4. Manage Money Differently
Taxes, retirement, safety net: it’s all different for workers in the gig economy. Not only do you have to ensure you get paid by your clients, you have to track your earnings, setting aside money for taxes. Tools like the mileage tracker app from Stride Health can help you track mileage and other expenses that will help you save on your taxes.
The 2018 Financial Attitudes & Behaviors Toward the Gig Economy survey, released by T. Rowe Price, finds that 78 percent of gig economy workers say they are more involved in their finances because they’re part of the gig economy. But only 16 percent of independent workers have a retirement savings plan. While you may not have access to retirement accounts through any of the companies you work for, you can set up your own IRA or Individual 401(k). It’s important to set aside money for retirement and taxes even more so as an independent worker since your company isn’t doing it for you.
5. Create Your Own Community
If you leave a traditional office to pursue other work, it’s important to still surround yourself with professionals, in your field and otherwise. It’s too easy to become isolated in the gig economy. For me, it’s an ongoing challenge to explain to friends and family that “working from home” doesn’t mean I can skip out on work whenever I want.
“I realized that all my friends are on the corporate track and I’m on a different route now. I needed some additional support,” observes Lynch. “I had to create a community around me of people on similar journeys, who understand the entrepreneur lifestyle, who can push me, and who can inspire me.”
I’ve found that simply working from libraries, coffee shops, or co-working spaces—regardless of my level of interaction—is critical to day-to-day sanity. It also has led me to meet new gig economy workers outside my field who can relate to my experience, swap ideas for being more productive, and who may end up being a source of new work five weeks, months, or years down the line.
Posted in Preparing Entrepreneurial Leaders