3 Musts for Running a Freelance Business in the Gig Economy

Anyone who is a freelancer, self-employed, or does a side-job online or under the table, is part of the gig economy. Being a gig worker is becoming more popular. By 2027, a study estimates that the majority of the workforce will be freelancers.

Generally, companies don’t mind whether employees are making money outside of the office, assuming their side-jobs aren’t cutting into productivity. With that freedom and the frequent need for additional income, a third of U.S. workers have entered the gig economy.

Those who eventually do well enough to support themselves through a contracting job alone often consider transitioning to it full-time. Making this shift means becoming a totally self-employed freelancer. It also brings all the self-directed, independent freedoms that come with it.

However, a slew of concerns can also arise when freelancing comes to mind. Worries or drawbacks can include job instability, tax management challenges, and more. But when run properly, a freelance career is a completely practical, profitable, and enjoyable way to make a living.

How can a contractor succeed in today's growing freelance workforce? Doing these three actions is a must for running a freelance business in the gig economy.

Prepare for Self-Employment Costs

Regardless of whether someone is an online artist, freelance contractor, or a self-employed driver, a self-owned business doesn’t provide any fringe benefits.

Therefore, career freelancers must establish their own savings plan and prepare for additional costs, such as a health insurance plan. Plus, launching a contracting career means saying goodbye to paid vacation time and other privileges a full-time employee might enjoy.

Overall, assessing the cost of self-providing all these necessities and luxuries is essential when deciding whether a freelance business can earn enough to be a sustainable full-time career.

Establish Payment Security

Freelancers need to establish solid, reliable contracts with clients to ensure they get paid fairly and on time for their work.

Before starting work for anyone, contractors should make sure that a clear payment arrangement exists between both parties. Many freelance websites offer payment protection programs for a fee, like Upwork.

Taking extra security measures like these gives contractors peace of mind they will be paid for their services. Likewise, employers can request a refund if a freelancer doesn't finish a job. They can also ask for changes to unsatisfactory work.

Building a trustworthy relationship is crucial to performing freelance work effectively. As such, figuring out a system to guarantee payments is an essential first step.

Get Professional Tax Help

Finally, lots of tax deductions are available to small business owners, from travel expenses to cell phone costs. Discovering available tax breaks will also save freelancers incredible sums, to a point where it’s a career necessity.

For those operating smaller freelance businesses who want to self-manage their taxes, buying software with optional consulting services, like TurboTax, can help. However, as a freelance business grows, taxes often become more complex. In this case, hiring a professional tax consultant might become necessary.

Overall, tax professionals can help ensure contractors get proper write-offs to help eliminate or minimize tax liabilities.

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