The auto industry is begging for bailout money from the government. Many companies are desperately looking for ways to stay afloat, cutting costs wherever possible. What does this recession really mean for the average freelance writer, designer, or consultant?
Does the downturn in the economy have the same effect on the small business owner as it does with the major corporations? What about the one-man-show of a freelancer? Do we need to start penny pinching or is this an incredible opportunity for growth? As with most things, a freelancer’s relationship with the current recession is simply a matter of perspective. Let’s start with the brighter side.
Freelancers Are Immune to the Recession
One of the major reasons why I got into the business of freelance writing in the first place, aside from the potential tax benefits, is that I am not bound to any single company, corporation or country. Some people may say that freelancers lack job security, but I believe that the exact opposite is true. I write for several different clients, so if any one of those chooses to “let me go”, I still have income coming in from the other clients. The same can be said about online entrepreneurs who run several websites with several sources of revenue. Contrast this to the conventional employee who gets laid off from his job. That’s one job, one salary.
During a recession, most companies look for ways to be more efficient with their spending and this may involve the laying off of full-time employees. They’ll downsize the business in some way, but they still have certain needs. Instead of having full-time staff, these companies can hire freelancers on an as-needed basis. When there is an increased workload, a freelancer can be hired. When business is slower, they can rely on a more streamlined staff. Furthermore, freelancers are more cost-effective because companies don’t have to pay into a pension, income taxes, and other expenses. They also don’t have to dedicate nearly as many administrative resources from HR, for example.
Freelancers Get Hit Hard by the Recession Too
In the face of a recession, companies may cut costs across the board, including the relationship that they may have with freelancers. A freelance writing client that once provided steady work (and steady revenue) may choose to end that relationship, taking a big dent out of your monthly income. If too many of your freelance clients choose to take this route, you may become more desperate to find any work at all, having a much harder time saying no to lower-paying gigs. You may seek out any projects at all, whether or not they are in line with your usual criteria.
Even if the client-freelancer relationship is not eliminated altogether, the workload may be significantly reduced. This can have a severely negative effect on your bottom line. Whereas you were once riding high, you may now be addressing the worst case scenario. During these times, you may have to dip into your savings and actively seek out side projects to supplement your income.
Versatility and Adaptability of Freelancers
One of the greatest strengths that a freelancer can have is versatility. You have to roll with the punches, trying new strategies to take your business to the next level. You may even need to rethink your business plan just to hold steady. Freelancers are no different than many small business owners, so you may need to consider different techniques for maximize your income during these tough economic times.
You can adapt. A recession may hurt on some level, but it can also present some interesting opportunities for growth.
Nice post and I enjoyed reading both pros and cons and how it can go either way, but you seem to have forgotten to include your personal experience in the current times…is it helping you or hurting?
It helped initially as I picked up a couple of extra projects, but more recently, it has started to hurt. Plenty of ebb and flow.
With me I haven’t really seen the recession hurt my income. But it seems to be hurting everyone else, especially freelancers I speak to. Hopefully things get better for everybody.