Tips for Entrepreneurs Looking to Jump into the “Gig Economy”
I was recently asked to speak to Orfalea College of Business students at California Polytechnic State University, San Luis Obispo about working in the new “Gig Economy.” People who work in the “Gig Economy” are paid by the task or project, as opposed to workers who receive a salary or an hourly wage. It occurred to me that after one year doing consulting full time, I could offer students a few things to consider before taking the first step into “gig” work.
Acquire a skill
This is a simple statement, but no less important. As a consultant, you are a subject matter expert. Your client looks to you to deliver high quality output with minimal direction. Clients will not pay you to learn on the job. Established companies offer young professional the opportunity to be paid to acquire skills, learn from the best and discover what excites them. Students can acquire skills and learn in non-traditional ways, but it will take longer and require more conscious effort to seek out mentors/teachers. The students mentioned it was common for “gig” workers to feel exploited. The “feeling” experienced is simply the worker overvaluing their time compared to what the market is willing to pay. The more skill you acquire the more your time will be worth. The longer you work, the more in tune you will be with what skills are valued, and by how much.
Don’t undervalue your time
If you are able to acquire a valuable skill, you should command a premium for this expertise. As a consultant, you will bear more taxes and overhead costs than an employee, that should be reflected in your rate. Don’t make the mistake of offering a discount rate to start with the hopes of raising it later. That won’t work well. Do your research. Test out different prices for different work. Honestly value your time. Some clients will pay, some won’t, but if you’ve priced it right, good clients will always pay.
Be effective, not productive
You only get paid when you work. When you begin to charge for your time, you will quickly realize it is very hard to bill 8 hours every day. Spend a week tracking every hour of a day and this fact will be clearly revealed. When you hear people brag about working 80-hour weeks, they aren’t. To succeed as a consultant, you must of effective. I don’t mean you must be productive or a good time manager. I mean you must be able to create high quality output proficiently. There are countless books on this topic, pick the ones that address effectiveness, not how to “crush” your To-Do list. For students this is particularly important. School is a structured environment with pre-defined deliverables and timelines. The workplace is not this organized, and it’s even less organized for a consultant. You set the timeliness, deliverables and execution schedule. The better you are, the more money you’ll make. If you’re not good, you’ll be making less than minimum wage before you know it.
Satisfaction
There is a great deal of satisfaction in bringing your expertise to clients who truly value your help. Savvy consultants find this work holds more purpose and meaning than salaried corporate roles. But it’s important not to discount what can be learned at established companies and think carefully about the trade-offs before “giging” your way into the workforce for the first time.