5 Big Challenges a Freelancer FacesToday’s freelance workforce is bigger than ever before. In a phenomenon that many authorities, including the US Bureau of Labor Statistics, have referred to as the “gig economy,” a growing number of American workers are working as freelance contractors instead of as traditional employees.
While the flexibility and potentially high earnings that are possible with freelancing are appealing, freelancers also face their own set of unique challenges that traditional employees don’t deal with. Here are some of the biggest pain points for freelance workers.
Taxes, Health Insurance, & Other Expenses
Freelance workers do not enjoy the benefits given to those who are legally classified by the IRS as employees. Not only are freelance workers responsible for their own health insurance, but they also don’t have an employer to pay payroll taxes. So, they lose a big chunk of their income to taxes.
Along with taxes and insurance, freelancers also lose income because many of the things they must do on a regular basis. Things like bookkeeping and reaching out to prospective clients are necessary, but do not generate revenue. As a result, freelancers may not spend all of their time doing billable work.
Competing in a Global Marketplace
American freelancers in many professions can have trouble competing on price in a global marketplace, where workers in different regions have very different income requirements to live comfortably. Because the cost of living in countries like India and the Philippines is so much lower than in the United States, Canada, or Australia, these workers have no problem charging as little as a tenth of what US workers charge. For US workers who must charge more out of necessity, it can be difficult to compete.
Feast & Famine: The Inconsistency of Freelance Work
Freelancers also face a “feast and famine” pattern in the work that they do. Freelance work proceeds from contract to contract, some short-term and others long-term. Some months may be especially lucrative, yet may also demand longer hours. During other months, there may not be quite enough work.
Handling Bookkeeping & Accounting
Another common pain point among freelance workers is bookkeeping. It’s an essential part of working as a freelancer, but many professionals who are not accountants aren’t all that familiar with how to do it correctly. There are quite a few SaaS platforms available that handle bookkeeping and accounting, but many of them are quite expensive and demand some level of learning curve.
One solution to this issue is our application, TopNotepad, a platform for freelancers that offers invoicing, bookkeeping and lead management functionalities in one convenient software program. It’s priced with freelance workers in mind, with a freemium option that actually provides enough functionality for a beginner to get started. At $12 or $25 per month, the paid packages are also quite affordable relative to what we provide.
Freelancing is a difficult road to take during your career. TopNotepad can help freelancers streamline their billing and accounting, handling it more quickly to free up time for activities that generate revenue.