Tips on How to Find Success in the Gig Economy
Today, many Americans — many of whom are parents — are ditching corporate 9-5 jobs to work in the gig economy. After all, 82 percent of working parents with school-aged children desire a more flexible work schedule. They are transitioning to short-term and freelance work while building businesses on their own terms. Is starting a gig economy business the right move for you?
How You Can Benefit From the Gig Economy
Today’s gig economy is actually a booming business. In June 2018, a U.S. Department of Labor study found that over 10 percent of the workforce in 2017 were people involved in “alternative work arrangements,” a term that describes the gig economy. Those numbers were down, but according to this information from Quartz at Work, they are inaccurate. Other data shows that up to 36 percent of the U.S. workforce is involved in gig work, and that number is expected to grow.
So the gig economy is thriving. Can it benefit you and your family? Harvard Business Review states that there are winners and losers, but winners include:
- Anyone with specialized skills or expertise.
- People who work in in-demand industries.
- People with an entrepreneurial mindset that can move from good jobs to great careers.
Gig workers are really running their own businesses. If that sounds like something that interests you, let’s dig a little deeper into what you’ll need.
Starting Your Own Business
The dream of running a successful business can be very alluring. Setting your own schedule, following your passion, and unlimited income potential often top the ‘why’ list, especially for parents who are trying to spend more time with their children now and leave a legacy for them later. However, there are many other factors to consider before you take the leap.
First and foremost, making this dream a reality requires forming a legal business entity with the state. There are a number of business types that can be created, from a traditional C-Corp to the often misunderstood LLP. But for those launching new business ventures, forming an LLC offers flexibility and security and can usually be completed in about 5 steps.
Another thing to consider is something The Balance calls “profit angle.” Is this service in demand right now? Will enough people pay for it so that you can earn a living? If not, you may experience cash flow problems, which Medium reports were an issue for 57 percent of gig workers in 2017.
Remember, it’s not just a salary you’ll need to cover. Going into business for yourself means you need to provide your own sources of insurance coverage and retirement income, as well as a nest egg for business downturns and expenses.
Finally, you’ll need some practical business skills, such as marketing, finding the right clients, and basic accounting to keep track of your income and expenses for reporting business taxes.
Why Parents Make Great Entrepreneurs
Before starting a business, you’ll need to have or develop certain character traits in order to be successful. Luckily, parents possess many of these traits intrinsically. Still, it helps to be aware of potential challenges and have a plan to address them.
- The tenacity of hard work.
Can you stick with something to see it through to the end? Are you willing to sacrifice time and money to see results down the road? Those are some reasons why tenacity is necessary and why, according to this article at Huffington Post, it beats waking up early. - The courage to take risks.
All entrepreneurs need to be risk takers. That means you’ll take some chances that won’t pay off. However, wise business owners know how to gauge risk. - The ability to adapt.
In business, things can change unexpectedly. Social media giants change their algorithms, making marketing more difficult. Popular trends suddenly die out, making an innovative product obsolete. Your best-laid plans come to fruition only to find that some aspect of your business or career is no longer marketable. That’s why you need to embrace strategic adaptability in your business, as this post from Chron.com advises. - The ability to successfully solve problems. All businesses run into problems from time to time, many of which are unexpected. Do you have the skill to solve both business-related and personal problems that complicate your ability to earn? Learn the seven problem-solving skills that all entrepreneurs need from Profitable Venture.
- The wisdom to share the load. You can’t do it all alone. While hiring help is an added expense, you really can’t afford not to outsource certain areas. For example, reputation management is one area most individuals don’t have the skillset or time to manage. Don’t worry, though. Digby Media can help.
Today’s gig economy provides a great opportunity for people to try their hand at new businesses, but it’s not a guarantee that you will be successful. Make sure you have the traits to survive – and an emergency fund – before you leap.
Best, Sarah Bull sarah@economymom.com Economymom.com Photo credit by Unsplash