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Freelancing is Trash!. Try these Instead | by Asher Adefioye | ILLUMINATION | Jul, 2023
Freelancing, in recent years, has become a popular alternative to traditional employment. It offers individuals the freedom to work on their terms, be their own boss, and explore diverse projects. While freelancing has its allure, it is not without challenges and drawbacks. In this article, we will delve into some of the key issues freelancers often encounter in their pursuit of professional independence. Additionally, we will explore alternative online business models that may appeal to individuals seeking different opportunities for income generation and career growth. While freelancing has its perks, being your own boss also means you have to be your own HR, accountant, and janitor… all rolled into one!
Unpredictable income
One of the most significant challenges of freelancing is income irregularity. Unlike a fixed monthly salary, freelancers’ earnings can fluctuate wildly from month to month. This unpredictability makes financial planning and budgeting more challenging, and it requires discipline to manage finances effectively. Not only do freelancers have to contend with unpredictable income, but they also incur additional costs associated with self-employment, such as taxes, insurance, and equipment. This further heightens the challenge of maintaining financial stability. For instance, freelancers may need to set aside a portion of each payment to ensure they have enough money to pay their taxes at the end of the year.
Lack of job security
Freelancers generate their own work opportunities. This lack of job security can lead to periods of unemployment or lean work phases, causing stress and anxiety about finding the next gig. Additionally, freelancers do not receive benefits such as health insurance, paid leave, or retirement plans that traditional employees enjoy. This is similar to a rollercoaster, with periods of exhilaration and high profitability followed by periods of tension and anxiety as the freelancer worries about where their next job will come from. Furthermore, they don’t have a net to catch them if they fall, like an employee would have with benefits and job security. Therefore, freelancers must carefully plan and manage their finances to ensure they are able to weather the inevitable storms of the freelance lifestyle.
Self-employment taxes
Unlike traditional employees, freelancers must navigate self-employment taxes. Handling tax obligations independently can be daunting. It’s essential for freelancers to understand the tax laws in their country and keep meticulous financial records to avoid potential pitfalls. For example, in the United States, freelancers are required to pay estimated taxes quarterly and must keep track of their deductions and credits to maximize their tax return. But hey, at least you don’t have a boss breathing down your neck all day!
Isolation and loneliness
Freelancers often work from home or in remote locations, which can lead to isolation and loneliness. The absence of coworker interactions and team dynamics can impact motivation and creativity. Building a support network or joining freelancer communities can help combat these feelings. As the famous Indian poet Amit Kalantri once wrote: “When you are lonely for a while don’t get restless, if you had born alone, you are going to die alone then for some time you can certainly live alone.”
Balancing Work and Personal Life
The flexibility of freelancing can blur the line between work and personal life, leading to burnout and strained relationships. Setting boundaries and establishing a structured work schedule can be challenging, but it is crucial for maintaining a healthy work-life balance. A helpful tip for freelancers is to set aside time each day to relax and recharge. This could be as simple as taking a break from work to go for a walk or talking with a friend. Taking time to relax and reset will help increase productivity and motivation in the long run.
Marketing and Client Acquisition
Finding clients and marketing services are constant challenges for freelancers. Competition can be fierce, and building a strong portfolio and a reputable brand is essential to attracting potential clients. Marketing efforts often require additional time and investment. Additionally, freelancers have to contend with the fact that their services may be seen as a commodity, making it even more difficult to stand out from the competition. It can be difficult to build a strong portfolio and reputation when competing against larger businesses and organizations with more resources and more established brands. It’s like trying to compete in the Olympics against athletes who have been training their whole lives and have corporate sponsorship and the best coaches – while you’re only just starting out. It can be done, but it takes more effort and dedication.
Payment Delays and Non-Payment
Freelancers may encounter clients who delay payments or, more often, fail to pay altogether. This can cause financial hardship and frustration, making it crucial for freelancers to establish clear payment terms and use contracts to protect their interests.
E-commerce
Starting an e-commerce business involves selling products or services online through platforms like Shopify, WooCommerce, or Amazon. This model allows entrepreneurs to create and manage their online store, giving them additional control over branding, marketing, and customer relationships. Additionally, e-commerce businesses provide entrepreneurs with a much lower barrier to entry than traditional brick-and-mortar stores. With just a computer and access to the internet, entrepreneurs can create their store and start selling their products and services. This reduces startup costs and makes it easier for entrepreneurs to enter the market.
Content Creation and Monetization
Content creators can leverage platforms like YouTube, TikTok, or podcasting to build an audience. They can also monetize their content through advertising, sponsorships, or merchandise sales. For instance, many YouTubers have monetized their content by offering exclusive video series, merchandise, and exclusive behind-the-scenes content to their subscribers. But don’t forget, content creators can also monetize their content by becoming a professional circus clown – you know, if all else fails!
Online Courses and Digital Products
Creating and selling online courses or digital products can be a lucrative venture for those with expertise in a particular field. Online courses and digital products offer a great opportunity to monetize your knowledge and expertise without having to invest in physical products or a storefront. Plus, it can be done from anywhere with an internet connection, making it a great option for those who are looking to create a side hustle or a full-time business.
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The Cities and States Where Side Hustles Could Earn the Most
More than half (54%) of Americans say they’ve started a side hustle to supplement their primary source of income in the last 12 months, according to a survey from MarketWatch Guides.
Although there’s no shortage of potential opportunities — side hustles can span teaching online to cleaning barbecues, creating digital products and so much more — one doesn’t necessarily have the same earning power as the next.
Related: 10 of the Most Profitable Side Hustles You Can Start With Little or No Money
Choosing a side hustle is one crucial piece of the puzzle — but where you decide to start it is another that might make or break your success.
So where in the U.S. do side hustlers have the greatest earning potential?
The team at SideHustles.com conducted a study to find out, analyzing data from the Bureau of Labor Statistics’ American Community Survey to determine which states and cities have the highest percentage of residents earning self-employment income and their average earnings.
Households in North Dakota, New Jersey and Connecticut earn the most from self-employment income, at $60,221, $55,748 and $55,192, per the data from SideHustle.com.
Lake Charles, Louisiana, has the highest average self-employment earnings at $179,080 per household, followed by San Tan Valley, Arizona ($141,459) and Upland, California ($130,291), the analysis found.
Related: The Top 10 U.S. Cities for Starting a Side Hustle, According to Statistics
Read on to see the top five cities and states where people earn the most, on average, from self-employment income, according to the study:
Top five cities where self-employed earn the most
- Lake Charles, Louisiana: $179,080
- San Tan Valley, Arizona: $141,459
- Upland, California: $130,291
- Newton, Massachusetts: $118,527
- Bethesda, Maryland: $110,573
Related: This 20-Year-Old Student Started a Side Hustle With $400 — and It Earned $150,000 Over the Summer
Top five states where self-employed earn the most
- North Dakota: $60,221
- New Jersey: $55,748
- Connecticut: $55,192
- Massachusetts: $54,712
- California: $53,639
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I Lead a Company Built Through Decades of Acquisitions. Here’s a Key to Making Them Successful
Opinions expressed by Entrepreneur contributors are their own.
Despite the fanfare that often accompanies acquisitions, the reality is that about 80% fail to achieve their desired objectives.
After all, there’s a lot that can go wrong. Inadequate due diligence. Overvaluation. Poor integration planning and execution. A failure to retain employees from the new company.
And yet, businesses spend more than $2 trillion on acquisitions annually. Why? It’s often unrealistic for a company to build all that’s needed to reach its strategic goals fast enough to remain competitive. An acquisition, however, presents an opportunity to quickly expand a business’s ecosystem, tapping into new relationships, distribution channels, products and innovations.
I lead an entertainment technology company — composed of iconic brands like TiVo and DTS — that has grown our ecosystem through 15 acquisitions in the last decade alone. What has the experience taught me?
The success of an acquisition is about more than the nuts and bolts of the deal itself; you’re not just buying a technology, product or service to tack onto your company offerings. You’re also gaining institutional knowledge and bringing thought leaders on board who could help steer your business.
I believe one of the most critical aspects of an acquisition’s success is too often overlooked: the people. Here’s what I’ve learned about how they can be the difference-makers in the lead-up to and aftermath of a deal.
Related: 5 Reasons Small Businesses Should Consider Mergers and Acquisitions
The “why” has to include the “who”
Sure, pre-deal due diligence involves evaluating the potential profits and risks of an acquisition. But it also requires searching for leaders, along with the systems and cultures they’ve developed, that are likely to contribute to your company’s growth.
In dynamic industries like tech, companies often need to pivot to remain competitive. That means it’s essential to ask this question when evaluating incoming leaders: Whose strategic thinking, leadership skills and decision-making style do you want on your side, even if you end up shifting them to new areas in the future?
We learned the importance of this consideration from an early acquisition. The technology we’d bought eventually became outdated, but that CEO has remained an instrumental member of our leadership suite for more than a decade, and an acquired team under his leadership has transitioned to form the foundation of one the most exciting arms of our business: our connected car platform.
Once you’ve found a company with the resources and people that will likely benefit your business and conditions enable sensible valuations, developing an integration plan before the deal closes is imperative.
We accomplish this by identifying change champions — committed leaders who are strong communicators, open to feedback, adaptable, resilient and collaborative — from both companies to rally our people. Then, we create detailed checklists for the first year or more, often including thousands of line items from assigning desks to implementing training events, all to move us swiftly toward our goals of a fully integrated team and business asset.
Related: How Leaders Can Build Acquisition-Ready Companies
Use it as an opportunity to reimagine culture
Many people see an acquisition as an opportunity to innovate — adding and evolving products and developing strategies for new markets. One thing they often overlook, though, is the chance to innovate company culture. Specifically, to pick and choose the best of both of what the companies are doing to establish a new normal.
Often, the default assumption is that the acquiring company’s culture will remain dominant. But that can sometimes be a mistake.
Many times, bringing two companies together and fusing their resources and operations creates an entirely new company — one that may benefit from a cultural change.
For example, following a merger, we realized our previous corporate values no longer accurately reflected the new company. So we reset them. It wasn’t always easy: It took a long-term project involving employee input throughout. It also required objectivity at the leadership level to stay open to new ways of working and communicating. However, the initiative resulted in a set of values that more meaningfully illustrated our evolved mission and culture and set us on a path toward greater success.
Related: How to Create a High-Performance Organization Through a Successful Merger
Move as quickly and transparently as possible
A deal closing can feel like crossing the finish line for those overseeing it. But when you look over your shoulder, you see that most employees are just lining up at the start. The real marathon begins after the closing: It takes steady work to get the rest of the company across the finish line to reap the anticipated gains of the deal.
We’ve found that approaching this integration process with a focus on urgency, sensitivity and transparency is key to retaining as many employees as possible, along with the crucial institutional knowledge and skills they hold.
This means we work fast to communicate our plan openly and honestly. For instance, within 45 days of a recent acquisition, we got leaders physically in front of 80% of the team. This approach aims to mitigate uncertainty by laying out plans and providing clarity on roles and opportunities. Research shows that transparency can engender trust, so when the answer to a question is, “We don’t know yet,” leaders should prioritize being upfront about that.
We also expressed empathy. Acknowledging that it’s natural to feel anxious about uncertainty and change is important to build morale during a time of transition.
About a third of employees from an acquired company tend to leave within the first year due to uncertainty or culture clashes. But time and time again, we’ve seen that a deliberate process has helped to improve on this trend. While it’s not always possible for all employees to stay on, voluntary turnover within a year of our last two acquisitions was just 15%.
Defining success
There are many ways to define a successful acquisition: meeting financial goals, expanding relationships or staking a hold in new markets. We’ve seen this firsthand. For example, strategic acquisitions have allowed our business to significantly amplify our global footprint of streaming devices and open up new monetization opportunities.
While these elements are critically important, we view success even more broadly. It also means our team feels they’re continuously working toward a worthy goal. And viewing people as vital to the success of an acquisition has helped us to assemble a team prepared and motivated to do just that: deliver innovative, extraordinary experiences to our customers.
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