A number of contractors also want to start or have started freelance businesses. Freelancers are self-employed and not committed to one particular employer long-term. Building their own business is often a way to productively fill the down time between contract assignments. How might people who are also freelancing know how well their independent business is doing? Well now there is a new source of information from Gallup about “micro-businesses” (i.e., businesses with 5 or fewer employees).
Freedom FishThe first report tells us that 1 in 3 of those who have microbusinesses depend on some other job for the majority of their incomes. When you look at the published table which arrays the length of time someone has been in business with what their main source of income is, you are able to see that businesses appear to become the main source of income for more than 50% of the owners somewhere between 6 and 10 years out. Gallup also reports that the majority of microbusinesses (62%) have annual revenues of $100K or less with almost half of the first-year microbusiness owners having revenues of $10K or less. $50K seems to be the breakpoint for when business owners stop depending on other income sources for the majority of their income.
Not surprisingly Gallup also reports that how much income business owners are receiving from their businesses affects what issues they perceive as most important. When income is mostly from another source, the two most often cited issues reported as a “major” issue by microbusiness owners were “the cost of taxes” and “having the right kind of marketing.” When the business was their primary source of income, the most often cited major issues shifted a little with “the cost of taxes” still being most often cited but “complying with regulations” taking the second most cited spot. Not surprisingly, those who have two income sources report that they are confident about their business in terms of knowing what customers want now and in the future, and how to attract new customers.
This is information that we have not had before. But be aware that exactly who makes up this random, national sample is not totally clear. Gallup says that the sample was drawn from people who were in past Gallup polls and indicated they were business owners and were willing to be contacted again for a future survey. This means that people who never planned for their business to provide them full-time income are likely to be included along with people who had much bigger hopes and plans. Also a poll takes a snap shot in time so it does not track particular businesses to see how they grow (or not).
What does this mean to freelancers starting up? Probably the time estimate for becoming a main source of income is too high but it also strongly suggests that contract work may be a good way to supplement your income in the early years.



For a short report mostly on second jobs click here.

For a longer report on research thus far click here.

Sally Power, Ph.D. is a writer, researcher, and personal consultant accelerating successful career transitions.

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