Editor’s note: This article was first published in July 2010, during Spain’s economic crisis. Its remarks on the scarcity of secure, well-paid jobs and on companies currently favouring freelancers describe that moment.
I’m sure that many of you, when looking at job listings, especially for sales reps, have been seeing the term freelance more and more often. For those looking for a fixed paycheck at the end of the month, the idea clearly isn’t very appealing, but sometimes you have to take the plunge, precisely because in times of crisis, job offers with high, secure salaries are few and far between.
Let’s start with a simple definition of a freelance professional.
A freelance professional is someone who is self-employed but works for one or several companies, although when you see one of these job offers in the press, the company usually wants you to work for it exclusively. In that respect, in short, you carry the full tax burden of a self-employed worker (an autónomo, in Spain), but your services belong to the company you’ve signed a commercial contract with.
Put that way, you may not like the idea. That said, a freelance professional has quite a few advantages, even though the disadvantages can’t be ignored.
Why companies want freelance sales reps
However they dress it up, the only reality is that companies look for freelance sales reps because they’re cheap workers. The company doesn’t pay Social Security contributions for them, nor does it pay them a salary. It only pays commissions if that person sells, and the commission is already built into its profit margin on the product.
Without a doubt, for a company, hiring a freelance professional or sales rep is the best option; in fact, it’s what companies are doing right now.
Pros and cons of freelancing
Disadvantages: Here I’m going to be tough, honest and realistic. Apart from the biggest disadvantage, which is having to pay your self-employed contributions every month, all the disadvantages a freelance professional may face come down to that person’s lack of professionalism when it comes to:
- Choosing the company and product: You may be offered high sales commissions, but if you know beforehand that the product will be hard to bring to market, or that it will take you a very long time to do so, you’re better off walking away immediately, although you might still consider doing it part-time.
- Not making a business plan: A business plan? But I’m not starting a company. That’s not entirely true. You are the company, and it’s extremely important to do more than a business plan: a study of costs and expenses, so you can calculate exactly how much you’ll have to pay each month whether you sell or not, and, once you know that, how much you need to sell to cover your fixed costs and still earn a more than decent salary. Keep in mind, too, that if you’ll be using your own vehicle, it will also break down, need servicing and need new tires. Studying fixed and variable costs as you would for any company will help you judge whether the project is viable.
- Sales: Freelance work keeps people who sell a lot happy and leaves people who sell little feeling let down, so weigh up your prospects as a professional or sales rep in that sector before taking the leap.
Times change, and so do types of contracts and ways of hiring. Specifically, becoming a freelance professional has some advantages.
In most people’s eyes there’s no difference between a freelancer, a self-employed worker and a free agent, but they always end up associating it with being self-employed, which causes a certain panic. If we move to the world of the free agent, things change, because, as we’ve discussed in other articles, a free agent generally isn’t limited to a single product.
A free agent usually has a main product with which they build up a client portfolio, and then introduces other kinds of products. Let’s say that, as with investing, they diversify both their risk and their products.
Never forget that with freelance contracts, if anyone wins, it’s you and the company, but if anyone loses, only you lose. So the more products and services you master and bring to your client portfolio, the better.
Remember: there are freelancers and free agents who quit, disappointed, before their first year, but there are others who earn around €150,000 a month, so success, once again, lies in daily work, mindset and consistency.
Further reading
- How to analyze fixed and variable costs
- How to overcome the fear of starting a business
- How to start a business with no money
- The entrepreneur’s mindset
Featured image: Seth Sawyers, CC BY 2.0, via Flickr.
