Is freelancing during recession time safe?
For many freelancers, operating your business during a recession can be scary. As companies begin laying off their workers and closing their doors, it’s easy to feel your own clients will start pulling back and leave you with money problems.
And yet… many freelancers find they not only survive during economic downturns but also thrive. New business opportunities open up, demand for certain freelancing services increases, and your ability to reach out to desirable clients actually grows.
In fact, you may have gotten into freelancing during a recession after realizing working for a large corporation didn’t guarantee stability. Maybe you started a side hustle to supplement your income out of necessity—then discovered it could evolve into a full-time freelancing career.
However you got into freelancing, all freelancers need to know how to recession-proof their income. Let’s look at the strategies smart freelancers adapt to take advantage of the work opportunities that arise during these difficult times.
Companies that operate out of big towers and throw large corporate events may look impressive, but there’s a lot of overhead that goes into maintaining their operations. Many small and large businesses also have loans and lines of credit that need to be repaid.
And once these businesses start feeling the effects of a recession, they’ll begin making budget cuts, usually by getting rid of workers they deem too expensive to keep as full-time employees.
By contrast, most freelancers keep our business expenses low. We work out of our homes or through our laptops, limiting our overhead to our personal expenses and any subscriptions or fees to business software and services.
Provided we maintain a decent client list and cashflow, freelancers can survive the hardships of a recession much easier than a big company that needs to concern itself with multiple departments and workers.
Of course, that’s only if we keep our operations lean. It’s certainly possible for some freelancers to hire additional staff, rent office space, and expand their marketing budgets in a bid to scale up their operations.
If this is the direction you want to take your freelancing business in, that’s fine — just realize you need to keep your cash reserves high and your debts low. Odds are you got into freelancing to get away from corporate life, so you don’t want to start inheriting its problems.
Just because a company gets rid of workers during a recession doesn’t mean their work responsibilities suddenly vanished. Even if they’re scaling down, businesses that laid off workers still need people to design their websites, write their copy, manage their books, and more.
This offers some job opportunities for your freelance business — but you shouldn’t market yourself as a simple replacement for the person who used to work for that company.
Instead, show how your unique skillset and experience make you the ideal choice to take on job responsibilities in a way that’s leaner, more efficient, and more affordable than the way this company’s conducted business in the past.
That means more than just stating you’re willing to work for less than their previous employees. In fact, you might be able to charge more if you provide multiple services in a single fixed-price package.
For instance, if you’re a freelance digital marketer who’s worked on multiple projects, there’s a good chance you’ve developed expertise in copywriting, website design, managing social media accounts, developing search engine optimization (SEO) strategies, and even coding. Offering some or all of these services as a package deal shows you’re capable of performing tasks usually done by multiple employees. This makes you valuable — and worth paying more.
You can also offer flexible means of payment. In addition to being paid per project, some freelancers enjoy working for monthly retainers where they devote a certain amount of time each month to a client’s projects. The retainer can be less than what a full-time employee would make, while still giving you a regular source of income.
Finally, be sure to offer reviews and testimonials on your website and marketing materials that show how past clients benefited from your services. If some of these clients share how you helped them survive a previous recession, that just makes you a more marketable resource during economic downturns.
Recessions may slow businesses down, but they also provide an opportunity for you to reassess your current practices, learn new skills, and modify your existing talents.
Take advantage of online courses to become proficient in new technologies or business practices. Spend time updating your branding and marketing message. Then, see how your new skills can strengthen your current business model.
For instance, if you already have years of experience as a teacher, consider developing online mentoring courses using pre-recorded or livestream video. Or you could write and self-publish an eBook sharing your expertise in a certain subject. Not only could this lead to an additional income stream, you’ll also have a way of promoting yourself as a lecturer to new audiences, creating additional job opportunities.
Stay creative. Even if these experiments don’t yield immediate rewards, they often generate small financial safety nets as well as new networking opportunities that can pay off later.
If necessity is the mother of invention, then economic downturns inevitably give rise to some innovative new technology.
Take the COVID-19 pandemic. Being stuck indoors for months required people to get familiar with Zoom calls, Slack, livestreaming, and virtual workspaces. It may have not been the ideal situation for many, but it did change how everyone saw businesses could be run.
And smart freelancers took advantage of this. For many, the increased focus on virtual calls and social media offered new ways to get in touch with clients. Likewise, the fact that everyone needed to work from home actually gave many freelancers an advantage since they already knew how to optimize the technology in their home offices.
Increased demand for freelancers has also led to the creation of online tools made specifically for freelance work—like Hectic. This all-inclusive platform allows you to manage clients and projects; build proposals and contracts; track your time; create and send invoices; schedule meetings; update your calendar; and more. Being able to view and manage all of your work responsibilities from one app certainly helps you maximize your efficiency.
Then there’s social media. Not only do channels like LinkedIn and Instagram provide you with new ways to advertise your freelance business, you can also use social media to network. Online communities offer freelancers a way to find support from other freelancers, ask business-related questions, and even advertise job opportunities. When finding work becomes challenging during a recession, knowing how to leverage communications technology is essential to keeping your business solvent.
There was a time when being loyal to a single company was the way to go. Working for the same people day in and day out and being able to bring home a steady paycheck, and eventually pension, was the dream for many workers.
In the freelancing world, however, a job can end the moment a project is completed or a contract ends. That doesn’t mean you can’t have long-term clients that offer a semi-stable income, but you can’t rely on them forever, either.
Because of this, freelancers are constantly working on multiple projects for several clients regardless of how well the economy is doing. Having a diverse client base is simply the norm for working freelancers who recognize the value of earning income from multiple sources. As a result, when they lose a few clients due to a recession, they’re able to find new work much easier and faster.
Being a lean, adaptive freelancer who knows how to network is one of the best ways to run a recession-proof business. Even in the most trying of financial times, if you know how to service a diverse clientele, you’ll be able to survive a problematic economy.
That’s not to say you should let your clients go easily. In fact, <tweet-link>by building a reputation as a reliable, autonomous professional who consistently delivers expert work, your clients will be hard-pressed to cancel your contract even during a recession.<tweet-link> Nevertheless, by diversifying your income streams, you’ll be in a much better position to adapt to economical changes—which, ironically, is one of the reasons businesses will want you on their team during downturns.
Learn more about being a flexible, capable freelancer at Hectic Academy. Our free micro-courses give you the inside track on mastering the freelance mindset and building a viable business model.