What is Freelancing & What Does it Mean to Freelance? [2022]

10 min read

You may be wondering, “so what is freelancing?” Freelancing means to work as an independent company rather than be employed by someone else. Freelancers are self-employed and often referred to as independent contractors.

Freelancers are hired by other companies on a part time or short-term basis, but they do not receive the same compensation as full-time employees or have the same level of commitment to any particular company.

With the rise of the gig-economy, people are talking about freelancing more than ever before. And that’s because there are more freelancers today than there have ever been in history – a 2019 study by Upwork and Freelancers Union shows that 57 million Americans freelanced in 2019.

And according to the same study, 53% of workers aged 18-22 are freelancing.

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Other terms for freelancing

Not everyone uses the term “freelance” or “freelancer” when it comes to work that a freelancer may do. In fact, even most freelancers refer to themselves as “self-employed.”

So other terms you may want to be aware of that relate to freelancing include:

• Contract work: Jobs where you are working to fulfill a short-term or part time contract
• Contract job: Same as above.
• Independent contractor: This is the IRS classification of a freelancer
• 1099: Freelancers are paid using a tax form called a “1099-MISC” as opposed to your typical, full-time W2. Sometimes “1099” is used to refer to a freelancer.
• Contract consultant: This term refers to a consultant coming in under a 1099 contract for a short period of time.
• Contract-to-hire: Sometimes freelancers are interested in full-time employment. Contract-to-hire roles provide a sort of “test period” for a freelancer before they are hired full time.

Why is it called freelancing?

The term “freelance” dates back to the 1800s when a “free lance” referred to a medieval mercenary who would fight for whichever nation or person paid them the most. The term “lance” referred to the long weapon that knights on horseback used to knock opponents off of their horses (think jousting).

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The first literary reference is from Sir Ivan Scott’s novel, Ivanhoe:

I offered Richard the service of my Free Lances, and he refused them—I will lead them to Hull, seize on shipping, and embark for Flanders; thanks to the bustling times, a man of action will always find employment.

Over time, the term continued to mean “independent” but left the battlefield to be applied to politics and finally work of any kind.

How does freelancing work?

Freelancers accept payment in return for providing some sort of service. That agreement is generally part-time or short term.

For example, if I hired a photographer to take new headshots for me, I could pay a freelancer for that session and that would be the end of it.

Sometimes people pay freelancers to work a set number of hours per week or per month. That arrangement is often referred to as a “retainer.”

A retainer refers to when you retain the services or right to someone’s time. A lot of legal professionals work on retainer. Every month, they bill a set amount of time to the client, regardless of whether that full time is used or not.

It’s really one of the simplest and most pure forms of entrepreneurship: the freelancer provides a specific service or outcome, and the buyer pays them a fee directly.

Why are people freelancing?

Freelancing provides a lot of flexibility and control to the individual. Most freelancers choose their own hours, the work that they do, the clients they work with, and may even be able to work remotely.

Freelancing is also a form of entrepreneurship, which means the freelancer has total control of their earning potential. Freelancers aren’t locked into a salary, and so they can earn as much as they are able to bill to their clients.

And as a freelancer, you are your own boss.

Freelancing provides a lot of variety in the type of work you can do, too. If you are someone with a lot of interests and are drawn to trying new things, freelancing can help you explore all kinds of projects and industries.

Historically, freelancing isn’t something people typically do forever. They either hire other freelancers or employees to build a full agency, they build their own products to replace their freelance income, or they go back to working full time.

Freelancing provides the flexibility many people want in order to figure out their next career move.

How much can I get paid freelancing?

According to that same 2019 study, the median freelance income is $20-28 per hour. Of course with so many different freelance jobs available, that number can vary quite a bit.

Transcription services may only earn $5-10 per hour, while software engineering roles may earn $75 or even hundreds of dollars per hour.

It’s best to compare the freelance rates of your particular skill set to get a good estimate of the expected income you could earn as a freelancer.

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What are the risks of freelancing?

Freelancing comes with both financial and some health risks.

In the United States, one of the biggest benefits to full time employment is access to healthcare and other financial benefits outside of your typical salary. That may include a 401K retirement plan or company-provided health insurance.

For freelancers, being hired as an independent contractor generally means companies will not provide those same financial or healthcare benefits to you.

So freelancers are on their own when it comes to planning for their financial futures and enrolling in health insurance coverage.

Not only are freelancers on their own to set these benefits up for themselves, but they are also at a bit of a disadvantage.

When a company negotiates a health insurance policy with a broker, they are often able to get more favorable rates since they are buying in bulk. But as a self-employed individual, you are buying a policy for yourself and your family only.

And, unfortunately, that means your health insurance may cost more.

It is easy to set up your own retirement savings account, but there will not be any matching contributions from your employer.

And finally, freelancers are responsible for all income coming into the business. If you are unable or unwilling to sell more projects and land more clients, your income will dry up.

These risks are all manageable, but they are worth considering before you jump into freelancing full time.

What type of work can I do by freelancing?

Companies are becoming much more open to and interested in hiring freelancers doing many different types of work. So freelancing has become much more acceptable for a wide variety of roles.

Admin Support Jobs

Freelance administrative support jobs include:

• Virtual Assistant
• Administrative Assistant
• Project Management
• Order Processing
• Data Entry
• Transcription
• Online Research

Design and Creative Jobs

Freelance design and creative jobs include:

• Brand Identity and Strategy
• Animation
• Presentation Design
• Motion Graphics Design
• Audio Production
• Video Production
• Voice Talent
• Physical Design
• Graphic Design
• UX/UI Design
• Art and Illustration
• Photography
• Videography

Writing Jobs

Freelancing writing jobs include:

• Copywriting
• Editing
• Proofreading
• Content Writing
• Ghostwriting
• Grant Writing
• Writing Tutoring
• Career Coaching
• Creative Writing
• Technical Writing
• Business Writing

Web, Mobile, and Software Development Jobs

Freelance web, mobile, and software development jobs include:

• Ecommerce Website Development
• Scripting
• Automation
• Mobile Development
• Product Management
• Game Development
• Desktop Software Development
• QA & Testing
• Web Design
• Mobile Design
• Web Development
• Other Software Development

Accounting and Consulting Jobs

Freelance accounting and consulting jobs include:

• Business Analysis
• Instructional Design
• Recruiting
• Tax Preparation
• Accounting
• Bookkeeping
• Financial Analysis
• Financial Modeling
• Management Consulting
• HR Administration
• Training and Development
• Financial Management
• Virtual CFO

Legal Jobs

Freelance legal jobs include:

• Business Law
• Corporate Law
• Tax Law
• International Law
• Securities and Finance Law
• Intellectual Property Law
• General Counsel
• Labor and Unemployment Law
• Regulatory Law
• Immigration Law
• Paralegal

Data Science and Analytics Jobs

Freelance data science and analytics jobs include:

• Data Mining
• Data Analytics
• Data Extraction
• Deep Learning
• Machine Learning
• A/B Testing
• Data Engineering
• Data Visualization
• Data Processing
• Knowledge Representation
• Experimentation and Testing

Sales and Marketing Jobs

Freelance sales and marketing jobs include:

• Marketing Strategy
• Social Media Marketing
• Community Management
• Display Advertising
• Telemarketing
• Lead Generation
• Public Relations
• Market Research
• Email Automation
• Marketing Automation
• Search Engine Optimization
• Search Engine Marketing

Customer Service Jobs

Freelance customer service jobs include:

• Customer Service
• Technical Support

IT and Networking Jobs

Freelance IT and networking jobs include:

• Network Security
• Information Security
• Solutions Architecture
• Systems Engineering
• System Administration
• Systems Compliance
• Database Administration
• DevOps Engineering
• Systems Architecture
• Network Administration

Engineering and Architecture Jobs

Freelance engineering an Architecture jobs include:

• Civil Engineering
• Structural Engineering
• Architecture
• Mechanical Engineering
• Electrical Engineering
• Sourcing and Procurement
• 3D Modeling
• CAD
• Interior Design
• Chemical Engineering
• Product Design

Translation Jobs

Freelance translation jobs include:

• Legal Translation
• Language Tutoring
• Language Localization
• Technical Translation
• Written Translation
• Medical Translation

How do I start freelancing?

You can start freelancing any time by simply accepting payment to complete a job for someone else.

Most freelancers will want to go a step further though and formally incorporate their company, open a bank account, and create an online presence for their freelance business.

There are three main paths to making money as a freelancer:

Working with clients directly

Working client direct refers to finding and communicating directly with clients through your own means. That may be networking, existing relationships, or word-of-mouth referrals.

This is one of the hardest paths, but has the highest margins since there are no middlemen in the transaction.

Freelancing client direct also creates more resilient relationships if you plan to freelance for the long-term.

Subcontracting

Some freelancers don’t like the hassle of finding and communicating with individual clients. For those freelancers, another option is acting as a subcontractor to another company or agency.

The model is pretty simple. Typically, an agency sells a large project to a client, and then they break that contract into “subcontracts” to be completed by other agencies or freelancers.

For example, a web development agency may sell a full website project, but subcontract the copywriting to a freelance copywriter outside of the agency itself.

A lot of agencies only employ a small number of people full time, and frequently will subcontract specialized parts of projects out to freelancers.

This is great for keeping your plate full, but it also removes a level of control. If the agencies you subcontract for run out of work, so do you.

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