New Study Reveals the Biggest Challenges Freelancers Face
Freelancing, done right, is a lucrative and fulfilling career. You work with great clients and make more than you would in a full-time job. But even when you control for the pitfalls of freelancing, there are still a lot of big challenges freelancers face on a regular basis. A new study by Skynova revealed what those challenges are.
According to the study, the biggest challenge freelancers face is meeting unrealistic demands. Over 43% of respondents labelled it as their top challenge. This is closely followed by fighting to win new business. 43.5% said new business was their biggest challenge, which may only get harder as demand for freelancing increases. Many of the other challenges are baked into the freelance model: ensuring on-time payment (40.4%), having to do it all (35.5%), distractions (27.4%), long hours (25%), loneliness (22.8%), and not having coworkers (22.4%).
Nearly a quarter of all freelancers (23.3%) face the issue of people thinking they are unemployed. While freelancing is often something people do in between jobs, it’s increasingly become a full-time career for tens of millions of people around the world.
Common freelancer mistakes
With all the challenges freelancers face, sometimes it’s due to their own mistakes. The study also looked at the biggest mistakes freelancers make, and many correlate to challenges.
The biggest mistake freelancers make is not sending invoices on time (36.2%). From there, the second biggest mistake is starting work before a contract is signed (24.5%). The third is not following up on late invoices (24%).
When money does come in the door, 23.7% report forgetting to withhold or save money for taxes, which could land a big bill come tax time. Interestingly, 22.8% report setting Net-30 payment terms (meaning payment is due 30 days after the invoice is sent) as a key mistake. This seems to be in contradiction with earlier studies that suggest being paid within 30 days is the average in America.
How freelancers get paid
Freelancers usually have to be flexible and work with their clients on payment terms. According to the study, the most common method of payment is PayPal, with 58.3% of freelancers using it for payment. The second most common is cold, hard cash, something 57.1% of freelancers accept. This is direct deposit (48.5%) and fourth is check (39%). Some freelancers also use Google Pay, Venmo, CashApp, or Square Card to accept payments. Interestingly, the survey did not include credit cards as a common method of payment.
While flexibility is important, many freelancers actively avoid certain payment methods. Leading the pack is payment by check, which 46% of freelancers avoid. The second is Google Pay (34.4%) and third is cash (34%).
Over 88% of freelancers are willing to start work before receiving payment as a rule (40.7%) or occasionally (47.6%). Only 11.6% say they will not start work without some form of payment. For those that don’t start work without payment, the average will charge a retainer. 20.3% of freelancers charge a retainer that is one quarter to one half of the total payment, whereas 33.3% charge a retainer fee that’s up to three quarters of the total payment.