I spend most of my time thinking about business opportunities often a year—or even two years—in advance to anticipate the needs of our customers and adapt our business plan in order to meet them.
FreshBooks customers are part of a rapidly growing sector of the workforce: self-employed professionals. One in three Americans now work as self-employed professionals, and by 2020, this group is expected to grow to 40 percent of the U.S. workforce, or about 54 million people. In a fast-evolving world, there’s no guarantee of what the market will look like in the new year, but here are my top 2017 predictions for self-employed professionals:
“Independent Worker.” “Self-employed worker.” “On-Demand Economy.” “Gig Economy.” Right now, the FreshBooks customer is called a potpourri of names—and the traditional term “SMB market” doesn’t quite capture how the market has evolved.
Some people use the term Freelancer, but many small businesses offering legal, consulting or home services don’t want to be called freelancers. Other people use Gig Economy and On-Demand Economy—but that phrase doesn’t extend well beyond Uber or Airbnb. Several studies refer to this group as Independent Workers, which really just sidesteps the naming challenge. The people in this segment of the market use lots of terms to describe themselves: Consultants, Professionals, Business Owners, Freelancers, etc.
In 2017, we will find a name that sticks.
The number of online matchmaking marketplaces is growing (e.g., UpWork, Thumbtack, Fiver) but the vast majority of work is still sourced offline through word of mouth and other advertising. That will continue in 2017.
However, more self-employed professionals still start accepting online payments. The benefits are simply too great – it’s easy to set up, funds reach the owner’s bank account sooner which benefits cash flow, and the expense can be passed along to clients with a modest hourly price increase.
Several corporations with large, urban offices will start to open their doors to self-employed professionals. An entire floor of a corporate high rise can be transitioned to a coworking space and managed by a third party.
The benefit to self-employed professionals is location and choice. The benefit to the large corporation is the ability to advertise their business to potential recruits in hallways, workspaces, and cafes—as well as a strong list of self-employed professionals who can augment the full-time workforce with short notice.
About half of self-employed professionals still use an accountant throughout the year or during tax time. This percentage will drop for two reasons: a) technology will continue to make it easier to understand finances and file taxes for these relatively un-complex businesses, and b) the number of first-time self-employed professionals will outgrow the number of existing self-employed professionals that decide to bring on an accountant.
Millennials are now the largest generation of self-employed professionals and have the highest level of comfort with online communities. While the SMB market has traditionally been viewed as hard-to-reach because it’s comprised of many professions, geographies, and needs, Millennials in this market will congregate in online communities. The result will be a significant increase in the investment firms make in targeting and serving SMB customers.
What do you think will change for self-employed professionals in 2017? Or what would you most wish to see change in the 12 months ahead? Share your two cents in the comments below!