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Selling Freelance Services in a Recession




Photography: Wallyg

Start freelancing during a boom and it feels that nothing can go wrong. Companies have more work than employees, more money than they know what to do with and more gigs to pass out to freelancers than available contractors. You’ll be picking and choosing your jobs, demanding higher prices each time and wondering where it’s all going to take you.

Presumably then when the economy hits a wall, freelance opportunities dry up, money is short and the future a wave of instability. Recessions should be good for no one, including those with no one employer and no permanent contracts.

In practice, hard times don’t seem to put people off trying. According to the US Department of Labor, the percentage of employed people describing themselves as “independent contractors” remained level at 6.7 percent from 1995-1997, fell slightly during the Internet boom years from 1999-2001, rose sharply in 2005 and is now back to the 2001 level of 6.4 percent. Whether the economy is growing or not, people still seem to see independent work as a solution.

It’s the problem however, that might be different and that should affect how freelancers market themselves in tough times.

Recession Strategies 101

During a boom, companies outsource because they want to grow fast and haven’t found enough qualified people to do everything themselves. In a recession, companies outsource because they want to save money and only want to pay for the work, not the employee.

So as the sales shrink, they keep the core staff – the programmers who make the software and the engineers who build it – and they start laying off the extraneous stuff: often, the copywriters and designers who make the products look attractive.

But once the product has been completed, the marketing still has to be done, so often those laid-off workers will get a call from the same personnel department that wielded the pink slip a few months before, asking how they’re doing, whether they’ve found another job… and inviting them to work – on a freelance basis — on a product that’s ready to roll. From the company’s point of view, it’s an obvious winner: they get someone who’s not just experienced but who knows the product and the company; they don’t have to pay benefits; and when the project is done, they can fire the worker all over again and this time without compensation.

And for the worker, if they’re looking for a job, it’s better than nothing. If they’re freelancing, it’s just another gig, and one they’re familiar with.

For other freelancers though, these sorts of situations are also opportunities. Not all laid-off workers are still available — or willing — to work for a company that’s told them to clear their desks.

So a company that’s known to be laying off should also be seen as a company with needs that can no longer be met in-house. That makes a cold call worthwhile. Ask for the personnel department, enquire whether they ever use freelancers and show them your portfolio. Not every company will need someone at the time you’re pitching but some might… and all of them will keep your contact details ready for when they do.

It’s also possible to look beyond companies to industries as a whole. FreelanceSwitch recently listed a number of industries that are likely to be looking for freelancers during a bust.

The best strategy is probably to combine both approaches. Identify industries that are most at risk during a recession, check the news and company press releases to see which are laying off workers then make your enquiry.

“You’ll Save, Not Grow”

Whatever you say in those cold calls though, the thought that will be going through the mind of the hirer is that now they can get the services they need for far less than they’d pay an employee. They’re thinking savings, not growth.

That should affect all the marketing you do during a recession.

The change from what you during the good times doesn’t have to be big. Smart marketing should use measurable data to show the value of a service or product. But often it shows how much income a product will generate. During tough times, focusing on how much money that service will save a business should bring better results for services aimed at firms.

You can think of this approach as a mirror-image of information products that promise to make the buyer rich. Courses that teach people how to generate a seven-figure income always sell, and they sell especially well at times when there seem to fewer paths for individuals to grow. But when marketing to companies, it pays to focus on how your service will save a company seven figures – and keep it alive until the next boom – rather than turn it into the next Microsoft.

The bottom line is that in a recession companies worry about the bottom line first. As freelancers, that gives us an advantage. We take care of our own pensions, our own health insurance and create stability by having a number of different employers. We might charge more per hour than a hired worker to make up for those expenses but for companies looking for someone in the short-term, that extra amount is worth paying.

Recessions are a time to worry. For freelancers, they can also be a time to grow.

[tags] freelancing [/tags]



2 Comments

  1. Paul Says:

    I think this post was pretty blunt and non-descriptive. It seems everybody wants to write about how to make money on the internet, but no real meat in the article because likely the writer has never done what he/she is writing about. I've found that the internet is also in a recession. So in theory yes getting rid of the employees and hiring internet savvy specialists can fill in, the problem, there is so many of us. It seems everyone wants to make money blogging. Even I can't really come up with a solid solution instead of the normal mail order junk trying to motivate someone to buy my "make money on the internet, grants, ex". Can you agree?

  2. Marc Says:

    Contract work is in -- I've certainly picked up some great assignments that I wasn't finding a year, year and a half ago -- But still, I could certainly take on more work (more income). Blogging is all well and good, but like Paul said, it's over-saturated.

    Anyone try selling their articles or photos on a syndication site like thesyndicatednews.com/ ? I've been thinking about trying it out.. thoughts?

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