A year ago I made five predictions for self-employed professionals in 2017. Three of five (60%) proved true:
A recent study from Freelancer’s Union found preference for the name “Freelance Economy,” but most people who work for themselves prefer to be called business owners or professionals compared to freelancers. What’s clear is that we can rule out some names, such as “Gig Economy,” to describe the market at large.
A 2017 study by FreshBooks found soliciting personal and client referrals (aka old-fashioned networking) to be the most utilized and effective way to find new clients. Additionally, online payments are growing. Bank of America reported 62% of small businesses have changed the types of payments they accept in the past five years.
Fortune 100 companies have not started opening their doors to free agents despite their real estate footprint. Instead, co-working firms are proliferating and even absorbing companies with a dozen or more employees. WeWork has an estimated 150,000 members and continues to invest in services to increase member retention.
A survey from Xero found 48% of accountants in the UK are worried about being left behind. Left behind by what? Software automation. The tip of the iceberg is now visible in the UK as well as North America. Small business owners can use software to “auto-magically” track and categorize expenses, save for taxes and retirement, reconcile sources of income, track time, and pay taxes.
Social media advertising continues to grow at a healthy rate and a majority of business-to-business marketers choose social media as a low cost option. As a self-employed professional, you’re likely to see more and more business advertising on Twitter, Instagram, Facebook, YouTube, and SnapChat. Additionally, podcasts reach large collections of targeted audiences, evidenced by advertising spend nearly doubling in the US this year. Popular examples include 99% Invisible, Planet Money, Being Boss, Waking Up, Unemployable, Six-Figure Side Gig, and many more.]
Now, let’s turn the attention to 2018. Many members of the workforce who have started along the path of independent work have no plans to return to a regular 9-to-5 job. In 2018, the side hustles and gigs that so many have taken up will become regular jobs thanks, in part, to technologies and processes built specifically to aid the independent worker. Here are a few of the changes we’re monitoring and looking forward to watching grow.
Today, roughly half of self-employed professionals manage their business income and expenses with a consumer bank account. Why? Most Americans already have a consumer account and banks generally charge a bunch of extra fees for business accounts. In 2018, two things will happen:
Do you still deposit checks with a bank teller? Probably not. You snap a picture of the check on your phone or deposit the check at an ATM. The same will be true for capturing receipts and recording expenses. Once the data exists somewhere, it’s just a matter of connecting it to your systems of record. Hubdoc is a great example of this. Futhermore, you’ll be able to connect almost any app to another. Companies like Zapier are bringing a renewed excitement to middleware.
There are very few barriers to entry remaining. 2018 should be called the year of the Side Hustle. Instead of a yard sale, it’s easy to reach more potential customers through Facebook, Etsy, Amazon, Letgo, and others. Instead of shift work, it’s easy to pick up a gig at your convenience on Fiverr, Rover, Upwork, or Doordash. And there are more ways to make money – organize a virtual event, write an ebook, or sell someone else’s stuff with a Shopify store.
Because more and more people are turning to independent work, there is a growing need for tools and resources that helps self-employed professionals save time and manage their finances. This will bring more standardization and repeatability to the task of managing finances. Additionally, the people who dabble with independent work will treat it as a side business and avoid the expense of a local accountant.
Right now, 37% of self-employed individuals have incorporated businesses. While incorporation isn’t the best choice for everyone, that percentage will grow as online education improves and the tools to incorporate shift online. Additionally, as self-employment matures as a viable and exciting career choice, more people will choose to incorporate for potential benefits related to liability, taxation, and access to capital.
All in, 2018 should be an exciting year. The trends affecting self-employment can lead to increased engagement and success for many professionals. From Uber to TaskRabbit to Etsy to FreshBooks, new technologies and philosophies have enabled people to turn creative pursuits and spare time into a bit of extra cash or a completely new career.