Freelance Work: Upsides And Downsides
by Judith H. Dobrzynski
For the independent-minded with an entrepreneurial bent, it's an attractive alternative to 9-5. But you better be ready to network, network, network.
Pat Baird, a registered dietitian, has worked on her own for 23 years. She earns a nice living working for major health care and pharmaceutical companies or their PR agencies--consulting, writing white papers and Web articles, making speeches, producing TV segments and serving on advisory boards. She also teaches nutrition as an adjunct at two colleges. And she's thriving.
The ranks of independent contractors--women and men like Baird--form a large part of the U.S. economy in the 21st century. The Bureau of Labor Statistics places the number of non-agricultural self-employed workers at around 9 million, plus another 20.5 million who are working part time for employers and may have other freelance activity.
The Freelancers Union, meanwhile, says there are 42 million freelancers, consultants, independent contractors, temporary workers, part-timers, contingent employees and otherwise self-employed workers in the U.S.
For those with an entrepreneurial bent and a desire for freedom, it's an attractive alternative to Corporate America, especially for those who can string together multiple part-time gigs that use different skills in a so-called portfolio career.
"Today, it's almost expected that people will not have just one career," says career coach Donna Sweidan of Careerfolk.com. "Everyone has to be developing skills on the side."
But the experts say that those who want to take this path have to be able to juggle several tasks, be very organized and attract clients. They may end up working harder, for less money, than they would in a full-time job.
They have to be willing to "network, network, network," says Riva Atlas, who was laid off from her job as a research analyst at a family investment firm about a year ago. "I am constantly getting my name out there, and I am a high user of LinkedIn." And those are just the basics.
Although self-described as "risk averse," Atlas, 44, decided to give freelancing a try. While looking for another job, she discovered that "I was up against a lot of younger people who were willing to work at less pay." But she also found that Wall Street firms would ask her if she were interested in consulting for them.
Now she has three clients, all investment firms, for whom she conducts due diligence, investigates investment opportunities and writes quarterly and client reports. She's paid by the hour, and one client occupies three days per week of her time--which she believes is ideal.
"It's good to have an anchor client who supplies 50% to two-thirds of your income," she advises. An anchor client provides reliable pay, room to experiment with new clients and a stable "social" connection.
Atlas also recommends setting up an LLC. "There are a ton of people consulting and freelancing, and having an LLC makes a big difference in terms of people taking you seriously," she says. "It shows you're not consulting until something better comes along."
Susan DeBaun, a creative consultant who works with Web, television and other media companies, advises self-employed professionals to get comfortable with uncertainty. At the end of March she finished a one-year consulting project at a large communications company that occupied her full time, leaving her no opportunity to line up new work. No matter, she says, stressing the need to manifest self-confidence. "People feel the panic," she says, so it's best to "stop worrying."
DeBaun says she gets business because "I stay in touch with people I admire and enjoy--that is how things have come about for me. You never know who is talking to whom." During downtime, she is working on becoming a certified career coach.
Baird is full of good counsel for the independent-minded, beginning with the advice to stay in touch with clients regularly. That became even more important when the downturn hit in 2008-09. "I made sure I stayed in front of people that I wanted to work with or was working with," she says. She called or emailed, even if it was simply to send a link to an article or a resource that might interest them.
Then there's the money question. Baird is flexible, charging by the project, the day or the hour, depending on what the work is. If it's something new, Baird may add in a contingency fee. "I tell the client I've never done this before, and I give them an estimate, and I say 'it may be higher or lower.' Honesty is the best policy," she says. "Then I'll say, 'I should know quickly if it's going to take me longer and I'll let you know.'"
What if the potential client balks at the price? "I say, 'let me tell you how I got to this number,'" Baird says. "I tell them how many hours or days it will take at what rate." Once people see the logic of the number, she says they either accept it or enter into a reasonable negotiation.
All of that requires thought, which is why Baird says she never agrees to a fee on the first phone call or e-mail; instead, she makes an excuse and asks to talk a little later. "It will buy you time to let you think about how much time it will take you," she explains. "And it will give you the opportunity to ask questions. You have to know all the parameters so you can sit down and figure out about how many hours the task will take and at what rate it will make sense."
Another good tip: When she confirms a job in writing, "I put at the end of my e-mail, 'Please reply by e-mail that you have read each of the bullet points and that you agree.' I don't accept an e-mail response that says 'OK' or 'fine.'" That way, there are no misunderstandings to spoil the relationship and stand in the way of more business.