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The Business of Freelance: An Increasingly Popular and Very Viable Career Choice



September 28, 2020 7 min read

Opinions expressed by Entrepreneur contributors are their own.

This article was written by Lindsay Patton, a member of the Entrepreneur NEXT powered by Assemble content team. Entrepreneur NEXT is our Expert solutions division leading the future of work and skills-based economy. If you’re struggling to find, vet, and hire the right Experts for your business, Entrepreneur NEXT is a platform to help you hire the experts you need, exactly when you need them. From business to marketing, sales, design, finance, and technology, we have the top 3 percent of Experts ready to work for you.

It’s time to give freelance workers the credit they deserve. Often looked at as not a “real” occupation, freelance work can seem abstract for some people, when it’s actually a very viable career choice. Freelancers are proving their working model is one that is only getting more popular. It’s estimated that freelancers will become the workforce majority, with millennials and Gen Z pushing for more contract, remote work opportunities. The Upwork and Freelancers Union’s Freelancing in America: 2019 report found that 57 million Americans freelance in some sort of capacity, making up 35 percent of the workforce. Out of all generational groups, Gen Z has the most freelancers, at 53 percent. Between 2014 and 2019, the amount of people who freelance full time rose from 17 to 28 percent. 

With the freelance model trending up, maybe it’s time we rework how we look at this type of career. Because honestly, freelance workers are more than just the projects they take on: they’re running a whole dang business on their own. Just like a business owner, self-employed freelancers have to promote themselves, build relationships, be smart about what they take on and be financially savvy. 

Many freelance workers recognize the work they put in and how closely it resembles running a business. Here are ways the two are nearly identical. 

Freelance workers manage their own financials.

No HR, no accounting, no payroll. It’s all up to you. For some, it’s a dream. For others, it’s enough to induce a panic attack. 

Many self-employed workers prefer the go-it-your-own accounting method, as it puts them in control of their personal finances and allows them to adjust their rates whenever they want. For freelancers who are a little more hesitant to manage their own financials, there are plenty of ways to hire an expert to help navigate this big undertaking. 

Since freelance workers are technically running their own business, they have to do taxes like a business owner. One of the biggest challenges as a freelancer is preparing for tax season. Since taxes are not taken out of freelance checks, it’s on the contractors to set money aside for what they owe on taxes. This often makes or breaks a freelance worker and the most prepared are likely looking at their work as their own business. 

Some people feel confident in their own knowledge to file their own taxes, while others look to services like H&R Block and TurboTax, or hire their own personal accountant or firm to handle their finances. Remember, there is no right way for a freelancer to manage their finances, just the way that is right for them. 

Freelance workers often create LLCs.

Many freelance workers are already business owners, meaning they have filed to become a limited liability company, or “LLC.” 

According to the IRS, “For income tax purposes, an LLC with only one member is treated as an entity disregarded as separate from its owner…” 

Simply put, an LLC protects freelance workers’ personal assets from their company’s debts or liabilities. When freelancing without an LLC, the government views your work as an extension of yourself. Having an LLC separates your freelance taxes from your personal tax return. 

And filing for an LLC is a relatively easy process that is worth the little investment. Each state has different requirements and filing costs, so it’s important to get the details directly from the Secretary of State. 

The number one problem shared among entrepreneurs today is finding, vetting, hiring, and retaining expertise.

Freelance workers often have to outsource help. 

As projects grow, many freelancers have to connect with fellow gig workers to complete the work successfully. It’s the nature of the economy—any good contract worker is going to grow. And being only one person, contract workers have a finite amount of time… unless they can get help. 

For larger projects, it’s common to bring on a contract employee to make sure deadlines are hit and the work quality doesn’t diminish as responsibilities are added. Like any business owner, you have to be choosy about who you hire – they could be the reason you keep or lose a client. 

Outsourcing help for your projects is easier when you work at building your network and promoting your skills. The freelance network is a growing one, and connecting with fellow freelance workers is beneficial for two reasons: 

  1. If you need to bring on help, you don’t have to search hard for a good fit.

  2. If they need to bring on help, they could see you as the good fit. 

Freelance work ebbs and flows. Some weeks and months are light, while others make it tough for you to catch your breath. Nurturing your network and tapping into their resources is beneficial for any type of workflow. 

Freelance workers have to promote themselves like a business. 

A freelancer’s plate is always being rearranged with various helpings and different projects. To keep that plate full, freelancers have to be proactive about marketing their services. They need to attract and keep clients, and getting their work in front of other people is the best way to do so. Like any business, there are key marketing tools a freelancer needs to utilize to keep earning income:

Social media 

  • If the goal is to promote services, freelance workers need to determine which social media platform is best for them. LinkedIn was created for digital networking, so that platform is a must. Secondary platforms are chosen based on how a person’s brand and services translate. If they work in a visual space, Instagram may be the best way to grab attention. If they’re a writer, focus on Twitter or Facebook, where it’s easier to share links. 


  • A professional website is just as important to a freelancer as it is to an established business. A well-built website is easy to navigate, explains services, shows work examples and provides a clear way to contact the owner. 


  • Content is one of a freelance worker’s best-kept secrets. By creating a blog on their website, a freelancer is establishing themselves as an expert in their field and increases SEO for their website. When a self-employed freelancer is continually creating content on their website, they’re bringing in more traffic. 


  • If freelance workers don’t network, it will be harder to connect with gig opportunities. Similar to business owners looking for clients, freelancers are always looking for a new relationship that may be the bridge to their next project. 

Contrary to what many believe, the freelance life isn’t just sitting in front of a computer while wearing pajamas. There is a whole lot of hustle involved including maintaining relationships, keeping workflow moving and on time and always being on the lookout for growth opportunities. You know, just like a business. 

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The Trump campaign celebrated a growth record that Democrats downplayed.



The White House celebrated economic growth numbers for the third quarter released on Thursday, even as Joseph R. Biden Jr.’s presidential campaign sought to throw cold water on the report — the last major data release leading up to the Nov. 3 election — and warned that the economic recovery was losing steam.

The economy grew at a record pace last quarter, but the upswing was a partial bounce-back after an enormous decline and left the economy smaller than it was before the pandemic. The White House took no notice of those glum caveats.

“This record economic growth is absolute validation of President Trump’s policies, which create jobs and opportunities for Americans in every corner of the country,” Mr. Trump’s re-election campaign said in a statement, highlighting a rebound of 33.1 percent at an annualized rate. Mr. Trump heralded the data on Twitter, posting that he was “so glad” that the number had come out before Election Day.

The annualized rate that the White House emphasized extrapolates growth numbers as if the current pace held up for a year, and risks overstating big swings. Because the economy’s growth has been so volatile amid the pandemic, economists have urged focusing on quarterly numbers.

Those showed a 7.4 percent gain in the third quarter. That rebound, by far the biggest since reliable statistics began after World War II, still leaves the economy short of its pre-pandemic levels. The pace of recovery has also slowed, and now coronavirus cases are rising again across much of the United States, raising the prospect of further pullback.

“The recovery is stalling out, thanks to Trump’s refusal to have a serious plan to deal with Covid or to pass a new economic relief plan for workers, small businesses and communities,” Mr. Biden’s campaign said in a release ahead of Thursday’s report. The rebound was widely expected, and the campaign characterized it as “a partial return from a catastrophic hit.”

Economists have warned that the recovery could face serious roadblocks ahead. Temporary measures meant to shore up households and businesses — including unemployment insurance supplements and forgivable loans — have run dry. Swaths of the service sector remain shut down as the virus continues to spread, and job losses that were temporary are increasingly turning permanent.

“With coronavirus infections hitting a record high in recent days and any additional fiscal stimulus unlikely to arrive until, at the earliest, the start of next year, further progress will be much slower,” Paul Ashworth, chief United States economist at Capital Economics, wrote in a note following the report.


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Black and Hispanic workers, especially women, lag in the U.S. economic recovery.



The surge in economic output in the third quarter set a record, but the recovery isn’t reaching everyone.

Economists have long warned that aggregate statistics like gross domestic product can obscure important differences beneath the surface. In the aftermath of the last recession, for example, G.D.P. returned to its previous level in early 2011, even as poverty rates remained high and the unemployment rate for Black Americans was above 15 percent.

Aggregate statistics could be even more misleading during the current crisis. The job losses in the initial months of the pandemic disproportionately struck low-wage service workers, many of them Black and Hispanic women. Service-sector jobs have been slow to return, while school closings are keeping many parents, especially mothers, from returning to work. Nearly half a million Hispanic women have left the labor force over the last three months.

“If we’re thinking that the economy is recovering completely and uniformly, that is simply not the case,” said Michelle Holder, an economist at John Jay College in New York. “This rebound is unevenly distributed along racial and gender lines.”

The G.D.P. report released Thursday doesn’t break down the data by race, sex or income. But other sources make the disparities clear. A pair of studies by researchers at the Urban Institute released this week found that Black and Hispanic adults were more likely to have lost jobs or income since March, and were twice as likely as white adults to experience food insecurity in September.

The financial impact of the pandemic hit many of the families that were least able to afford it, even as white-collar workers were largely spared, said Michael Karpman, an Urban Institute researcher and one of the studies’ authors.

“A lot of people who were already in a precarious position before the pandemic are now in worse shape, whereas people who were better off have generally been faring better financially,” he said.

Federal relief programs, such as expanded unemployment benefits, helped offset the damage for many families in the first months of the pandemic. But those programs have mostly ended, and talks to revive them have stalled in Washington. With virus cases surging in much of the country, Mr. Karpman warned, the economic toll could increase.

“There could be a lot more hardship coming up this winter if there’s not more relief from Congress, with the impact falling disproportionately on Black and Hispanic workers and their families,” he said.


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Ant Challenged Beijing and Prospered. Now It Toes the Line.



As Jack Ma of Alibaba helped turn China into the world’s biggest e-commerce market over the past two decades, he was also vowing to pull off a more audacious transformation.

“If the banks don’t change, we’ll change the banks,” he said in 2008, decrying how hard it was for small businesses in China to borrow from government-run lenders.

“The financial industry needs disrupters,” he told People’s Daily, the official Communist Party newspaper, a few years later. His goal, he said, was to make banks and other state-owned enterprises “feel unwell.”

The scope of Mr. Ma’s success is becoming clearer. The vehicle for his financial-technology ambitions, an Alibaba spinoff called Ant Group, is preparing for the largest initial public offering on record. Ant is set to raise $34 billion by selling its shares to the public in Hong Kong and Shanghai, according to stock exchange documents released on Monday. After the listing, Ant would be worth around $310 billion, much more than many global banks.

The company is going public not as a scrappy upstart, but as a leviathan deeply dependent on the good will of the government Mr. Ma once relished prodding.

More than 730 million people use Ant’s Alipay app every month to pay for lunch, invest their savings and shop on credit. Yet Alipay’s size and importance have made it an inevitable target for China’s regulators, which have already brought its business to heel in certain areas.

These days, Ant talks mostly about creating partnerships with big banks, not disrupting or supplanting them. Several government-owned funds and institutions are Ant shareholders and stand to profit handsomely from the public offering.

The question now is how much higher Ant can fly without provoking the Chinese authorities into clipping its wings further.

Excitable investors see Ant as a buzzy internet innovator. The risk is that it becomes more like a heavily regulated “financial digital utility,” said Fraser Howie, the co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise.”

“Utility stocks, as far as I remember, were not the ones to be seen as the most exciting,” Mr. Howie said.

Ant declined to comment, citing the quiet period demanded by regulators before its share sale.

The company has played give-and-take with Beijing for years. As smartphone payments became ubiquitous in China, Ant found itself managing huge piles of money in Alipay users’ virtual wallets. The central bank made it park those funds in special accounts where they would earn minimal interest.

After people piled into an easy-to-use investment fund inside Alipay, the government forced the fund to shed risk and lower returns. Regulators curbed a plan to use Alipay data as the basis for a credit-scoring system akin to Americans’ FICO scores.

China’s Supreme Court this summer capped interest rates for consumer loans, though it was unclear how the ceiling would apply to Ant. The central bank is preparing a new virtual currency that could compete against Alipay and another digital wallet, the messaging app WeChat, as an everyday payment tool.

Ant has learned ways of keeping the authorities on its side. Mr. Ma once boasted at the World Economic Forum in Davos, Switzerland, about never taking money from the Chinese government. Today, funds associated with China’s social security system, its sovereign wealth fund, a state-owned life insurance company and the national postal carrier hold stakes in Ant. The I.P.O. is likely to increase the value of their holdings considerably.

“That’s how the state gets its payoff,” Mr. Howie said. With Ant, he said, “the line between state-owned enterprise and private enterprise is highly, highly blurred.”

China, in less than two generations, went from having a state-planned financial system to being at the global vanguard of internet finance, with trillions of dollars in transactions being made on mobile devices each year. Alipay had a lot to do with it.

Alibaba created the service in the early 2000s to hold payments for online purchases in escrow. Its broader usefulness quickly became clear in a country that mostly missed out on the credit card era. Features were added and users piled in. It became impossible for regulators and banks not to see the app as a threat.

ImageAnt Group’s headquarters in Hangzhou, China.
Credit…Alex Plavevski/EPA, via Shutterstock

A big test came when Ant began making an offer to Alipay users: Park your money in a section of the app called Yu’ebao, which means “leftover treasure,” and we will pay you more than the low rates fixed by the government at banks.

People could invest as much or as little as they wanted, making them feel like they were putting their pocket change to use. Yu’ebao was a hit, becoming one of the world’s largest money market funds.

The banks were terrified. One commentator for a state broadcaster called the fund a “vampire” and a “parasite.”

Still, “all the main regulators remained unanimous in saying that this was a positive thing for the Chinese financial system,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics in Washington.

“If you can’t actually reform the banks,” Mr. Chorzempa said, “you can inject more competition.”

But then came worries about shadowy, unregulated corners of finance and the dangers they posed to the wider economy. Today, Chinese regulators are tightening supervision of financial holding companies, Ant included. Beijing has kept close watch on the financial instruments that small lenders create out of their consumer loans and sell to investors. Such securities help Ant fund some of its lending. But they also amplify the blowup if too many of those loans aren’t repaid.

“Those kinds of derivative products are something the government is really concerned about,” said Tian X. Hou, founder of the research firm TH Data Capital. Given Ant’s size, she said, “the government should be concerned.”

The broader worry for China is about growing levels of household debt. Beijing wants to cultivate a consumer economy, but excessive borrowing could eventually weigh on people’s spending power. The names of two of Alipay’s popular credit functions, Huabei and Jiebei, are jaunty invitations to spend and borrow.

Huang Ling, 22, started using Huabei when she was in high school. At the time, she didn’t qualify for a credit card. With Huabei’s help, she bought a drone, a scooter, a laptop and more.

The credit line made her feel rich. It also made her realize that if she actually wanted to be rich, she had to get busy.

“Living beyond my means forced me to work harder,” Ms. Huang said.

First, she opened a clothing shop in her hometown, Nanchang, in southeastern China. Then she started an advertising company in the inland metropolis of Chongqing. When the business needed cash, she borrowed from Jiebei.

Online shopping became a way to soothe daily anxieties, and Ms. Huang sometimes racked up thousands of dollars in Huabei bills, which only made her even more anxious. When the pandemic slammed her business, she started falling behind on her payments. That cast her into a deep depression.

Finally, early this month, with her parents’ help, she paid off her debts and closed her Huabei and Jiebei accounts. She felt “elated,” she said.

China’s recent troubles with freewheeling online loan platforms have put the government under pressure to protect ordinary borrowers.

Ant is helped by the fact that its business lines up with many of the Chinese leadership’s priorities: encouraging entrepreneurship and financial inclusion, and expanding the middle class. This year, the company helped the eastern city of Hangzhou, where it is based, set up an early version of the government’s app-based system for dictating coronavirus quarantines.

Such coziness is bound to raise hackles overseas. In Washington, Chinese tech companies that are seen as close to the government are radioactive.

In January 2017, Eric Jing, then Ant’s chief executive, said the company aimed to be serving two billion users worldwide within a decade. Shortly after, Ant announced that it was acquiring the money transfer company MoneyGram to increase its U.S. footprint. By the following January, the deal was dead, thwarted by data security concerns.

More recently, top officials in the Trump administration have discussed whether to place Ant Group on the so-called entity list, which prohibits foreign companies from purchasing American products. Officials from the State Department have suggested that an interagency committee, which also includes officials from the departments of defense, commerce and energy, review Ant for the potential entity listing, according to three people familiar with the matter.

Ant does not talk much anymore about expanding in the United States.

Ana Swanson contributed reporting.


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