Why the new freelance economy is great for your small business

The freelance economy is the future of work. At least, that’s how the labor market sees it. An estimated one in three Americans—or 42 million people—is a freelancer. By 2020, it’s predicted that the ranks of the self-employed will grow to become half of the U.S. workforce.

“The freelance economy is exploding at exactly the same moment that companies are undergoing a major shift in how they hire,” wrote Jeff Wald, cofounder of WorkMarket. “Talent is moving from a fixed cost to a variable cost, with companies staffing up and down as needed.”

Meanwhile, the market for full-time jobs is sluggish. CNN recently reported that 2013 ended with the weakest job growth in years, which means meaningful full-time opportunities are scarce. It’s no surprise that professionals are pursuing the entrepreneurial track.

The new face of expertise

The old stereotype, that freelancers are just people who can’t find full-time jobs, is years—even decades—out of date. The contemporary freelancer is an experienced professional with a specific set of skills, whose track record and personal brand are strong enough to support a thriving business.

They’re talented businesspeople like Steve P. Young, who founded a content marketing consulting firm after running marketing at a reputable startup. They’re writers like Kristi Hines, an expert in social media and online marketing.

These independent consultants control their clients, projects, working hours, and income. They are good—and even great—at what they do. Many have committed significant time and effort into continuing their education, refining their skills, and adding new ones. This depth of skill is just one of the reasons that businesses large and small are embracing the value of freelancers.

Widening your business’s lens

Cost is a major factor driving the shift away from full-time hires toward the freelance model. But freelancers are more than just a solution for cost-conscious business owners facing uncertain economic times.

Businesses are increasingly using freelancers on a per-project basis, bringing them on for specific initiatives for which their skills and expertise are suited. Plus, the freelance model allows companies to harness the abilities of multiple consultants, often for the price of a single full-time hire with a more limited skill set.

“We work with subject matter experts because they bring deep expertise into the unique business issues our clients are addressing,” said Glenn Glow, CEO at Crimson Marketing. “If we’re going to help a large technology company enter a new market, we will bring in consultants who understand that market. Our clients win because we help them get to market faster.”

“One of their strengths is that they have solved a particular business problem before, so they can help an organization be smarter and faster,” he added.

Another way freelancers increase speed to market is by leveraging their networks. Because freelancers typically rely on many different clients for business, their networks tend to be extremely well-developed. They can use these networks to introduce your business to valuable contacts who can help you enter new markets and avoid costly missteps.

Get in line

One of the biggest challenges of working with independent consultants is that they’re often in high demand.

“A consultant is different in that they have multiple clients, so that they are not dedicated to you,” explained Glow. “The way around the availability issue is to create ongoing relationships with multiple consultants in each subject area that’s important to you.”

With the kind of depth and breadth of expertise and experience now available in the freelance space, there’s no limit to the number of consultants a company can leverage—and the benefits they can receive in doing so.

About the author

Ritika Puri specializes in business, marketing, entrepreneurship and tech. She writes for American Express OPEN Forum, Forbes, Investopedia, Business Insider, CMO, the SAP Innovation Blog and others.

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