It is no secret that we are in the Giga Economy season. Over the next decade, the number of freelancers will exceed the number of traditional employees. The All-Russian census of freelancers conducted by the Higher School of Economics showed that in Russia freelance is becoming more and more popular every year. Only on one of the freelance exchanges about half a million people are registered. Many leave their previous job to become a freelancer. However, most people regard this as their own business.
But even while the popularity of freelancing is growing rapidly, and it is becoming a real alternative to the accepted standards of employment, there are still many myths surrounding this type of work. That is why many are still skeptical of such activities. So, below we will consider five basic myths associated with freelance work, which simply do not correspond to reality.
Myth 1. You are your own master
Most freelancers once hear from friends, relatives or friends about the following phrase: “I envy you so much, because you don’t have a boss who demands some kind of reporting from you every day, doesn’t ask for results, and so on.” But in reality this is not at all true. Each freelancer, self-employed or full-time, works primarily for the client. At the same time, contract work can be unstable and seasonal, which in itself is quite stressful. In this case, the creation of a well-diversified client base saves, which among freelancers is equated to stable income. But not everyone succeeds in creating such a base.
Thus, the freelancer does not really have a direct manager, but he has clients who can be equated with the boss. After all, each of them must be held accountable for the time and amount of work performed. Working with several such clients at once, strictly adhering to deadlines and achieving high-quality results is sometimes more difficult than having one single boss.
Myth 2. It's not like starting your own business.
In fact, freelancing often means starting your own business. For part-time freelancers, and especially full-time freelancers, it is recommended that you register as an individual entrepreneur or company, rather than working as a private individual.
There are several financial advantages to starting a business. The most common way for freelancers to create their own business is to register LLC (Limited Liability Company). The advantage of registering an LLC is the legal part of the matter. If someone decides to sue the LLC, then all penalties and the collection process will be carried out directly from the organization. In this case, the personal finances of the owner of the LLC will be inviolable. There are also a number of tax benefits for organizations of this type, therefore LLC is more profitable than, for example, registration of individual entrepreneurs. A registered company is likely to face much more professional new perspectives than just a service provider. This is one of the many reasons that freelance work is not something that you can just pick up and run. There is a foundation that must be built, like any other legitimate business.
Myth 3. It's easy money.
The difficulty of remote work, the monetary aspect of freelance, and often instability. Freelance is anything but easy money.The main difficulty is that a person has to deal with all financial issues independently. In addition, serious self-organization is required. Without competent financial management and self-discipline, successfully working as a freelancer will not work.
Yes, getting a salary while working in an enterprise, one may encounter unscrupulous employers who extend payment terms by weeks, and sometimes months. But the same issues can arise with a freelancer with customers. Often they can delay payment, cut back, and sometimes even try to avoid transferring money for work done by a freelancer. Here again, it is worth recalling the advantage of formalizing officially, in order to make it possible to conclude official contracts and, in the case of dishonesty of the customer, to resolve all issues in a judicial proceeding.
If we are talking about freelance workers working as private individuals, there can be a number of certain difficulties. Some of them decide freelance exchanges, which guarantee payment for work by the customer and fulfillment by the employee on time. However, those people who are “in free swimming” always have certain risks associated with payment.
Financial management is also different from classic work, freelancers do not just have to deposit checks into their bank account. For both the LLC and the independent contractor, it is recommended that the non-staff income is stored in a separate bank account. Separating non-staff salaries from other personal day-to-day banking operations will greatly facilitate life in the event of tax issues. This is especially true for those for whom freelance is the main source of income and regular work.
Freelance work is completely tax deductible. Therefore, the employee must keep track of all his income and pay any taxes due on this.
Myth 4. You can work from home whenever you want, and even in underwear
While freelance usually involves working remotely, it’s unlikely to work when and where you want. Such opportunities are a common misconception among novice freelancers. The thing is that freelancers must adhere to normal working hours in order to communicate with customers. Not every customer wants to discuss matters in their own time.
Freelancers should also be in places where there is reliable Internet and mobile communications, so working on the beach will also fail. In addition, video calls with clients or colleagues are commonplace, which requires wearing appropriate clothing. It is noteworthy that recent studies have shown that a person who does this or that job in standard business clothes works with greater productivity than a worker in pajamas or yoga pants.
Myth 5. Freelance workers - loners and introverts
It is true that much of the freelance work is done from home, in a cafe or coworking, and so on. Some people mistakenly believe that a career path is ideal for an introverted person. In fact, this is quite far from the truth. Freelance workers are themselves both a marketing team and the face of the brand. Effective freelancers must work very hard to build their client base, attending meetings or networking events frequently. Regardless of whether a freelancer starts a large-scale business or tries to establish a side income, he must be resourceful and creative.
New era
Mankind has entered a new era when traditional work is relegated to the background. Today, more and more often asking what a person is doing, one can hear answers such as “self-employed” or “small business owner”. Organization of your own business and "work for yourself" is becoming increasingly popular in our country.