How to Prepare for a Recession As a Freelancer
There are many arguments for the relative benefits of freelancing versus full-time employment. It still seems like there are more freelancers every year and fewer people can choose. And in any case, one of the notable disadvantages of freelancing is the sheer instability.
According to a Forbes article warning of a “downturn” in contract work, there are warning signs that life as a freelancer could soon get more difficult. They set an end date somewhere around 2020, citing figures from CNBC:
Most Wall Street economists still believe the recession won’t happen until 2020 or later, but they are increasingly worried about economic conditions and higher rates as the stock market sells off. But as banks and brokerages try to calm the negative market sentiment, the S&P 500 is on the brink of its worst annual market performance since 2009.
Basically, as budgets shrink, cutting costs by eliminating freelancers from the budget is an attractive choice for managers that will look better than downsizing full-time positions ( although it doesn’t ). If you haven’t felt the end approaching yet, now is the time to get ready.
Maybe get a full day
Again, this is not for everyone. You may not be able to find a full-time job, or the circumstances of your life make freelancing work the best option. However, if you have the opportunity to take that position and overcome this coming recession wave is perhaps a good option for now. If you’re still hungry for outsourcing, outsourcing is often possible and this will keep your portfolio diversified and relevant as you also benefit from the company.
Save this money
Full-time freelancers are familiar with budgeting and saving tips during tough times; If this prediction is correct, we will have very lean times ahead. This means that if you can at all, it’s time to save more than you think you need. Maybe make a recession graveyard. If it doesn’t, then in two years you will have a ton of extra money. You can also do a major overhaul of your life and cut your expenses where possible. Pay off your old debt so that it doesn’t pressure you in the future. Fundamental financial issues, but with a lot of attention.
Think about how your business can improve
While we are thinking, how can your business offer more? How much do you spend on what you do versus what you earn in return? Forbes writes:
Every experiment has a half-life and you want to know if it’s time to change something now. Is your business financially organized well, or are you spending too much money on additional equipment, customer contacts, marketing, or other categories? If you’re working with a digital talent marketplace, is it time to check if it has met your goals and should you make changes or add a second or third platform to grow your business?
Don’t overexert yourself, but keep in mind that cost savings are more likely to happen with services that are not needed. It’s time to make yourself more useful.
Check with clients
Personally, I’ve always found it difficult to get in touch with the managers of the companies I work for freelance, so it’s hard for me to take this advice. But asking how you are doing and where you can improve is a normal part of a full-time job. Why not make it part of your freelancing? This can give you direction when trying to figure out how to grow:
It can be awkward to ask, “Why are you hiring me?” and “When won’t you hire me?” but you will learn important information about how your best customers and therefore the market see you. Don’t be afraid to ask the obvious next question: “What skills do I need to develop or improve to continue to be considered an important member of your company’s freelance team?”
Expand your network
This is tricky too, especially if you work from home, but don’t relax just because you have enough work to do right now. You always have to have something different, so if a big contract ends, you have someone to turn to. Maintaining that relationship can be critical when you need to find more work.
One of the hardest aspects of freelancing is feeling like you’re always looking for a job, but that can be fun too. Let’s just limit the level of excitement a little more with preparation.