Strength, Weakness, Opportunites, and Threat or SWOT Analysis of Freelancing for Self-Employed Individual Freelancers Working from Home
You will read everywhere on the Internet freelancing is very to start. One can make a decent amount of money quickly. There is a flip side of it as well, and many freelancers have survival issues.
The SWOT analysis of self-employed individual freelancers can help us analyze internal and external factors that can make or break a freelancer.
So let us do SWOT Analysis on freelancing as a choice of career for an individual freelancer who prefers to work from home (WFH).
What is SWOT Analysis?
SWOT Analysis is an acronym of Strengths, Weaknesses, Opportunities, and Threats. It helps us analyze the same (Strengths, Weaknesses, Opportunities, and Threats) of a project or person or business or partnerships. You can read about SWOT Analysis on Wikipedia in more detail.
So let us look at the Strengths, Weaknesses, Opportunities, and Threats or SWOT analysis for solopreneurs or individual entrepreneurs and freelancers.
The strengths in the SWOT Analysis of Freelancing
- Low break-even point – Overhead for an individual based service business is always less. So freelancing is no different. Less overhead means an individual can start quickly and reach a break-even point in a brief period—further Reading: How to Calculate Break-Even Point.
- Ever growing industry – Outsourcing is an ever-growing industry. Only on Upwork, I see more than 1 Billion Dollar of Freelancing projects being posted annually. That’s a big industry with sizable growth.
- Talent for Hire – There are a lot of freelancers and small-size companies available to work. One doesn’t need to hire them full-time and pay if they deliver.
- Flexibility – The flexibility in what you want to be working on and how you want to work. Moreover, where you want to work on, and how much you want to work. Also, read the Advantages of Freelancing.
- GEO Diversification – You can diversify your freelancing clients’ different geographical locations as well as many sources of getting new clients. It not only provides stability but can help you take advantage of fluctuating forex markets.
The opportunities in the SWOT Analysis of Freelancing
- Partnership – There are lots of synergies one can form with other individual freelancers. If you are a web developer, you can partner with an Android developer or a web designer.
- Skill Development – Individual freelancers can develop new skills very quickly and almost instantly. So many online courses on sites like Udemy and you can learn many new skills in less than a week’s time that a few years back may have taken ages.
- Work from Home Mantra – The world is moving from a traditional work environment towards work from home. Even many fortune 500 companies are offering their employees to work from home.
- Marketing opportunities – May not only get clients from freelancing sites like Upwork but can easily set up other sources of clients like a blog or get started with online marketing with Google or Facebook Ads with few clicks.
The weaknesses in the SWOT Analysis of Freelancing
- Individual Dependency – There is a lot that depends on the individual freelancer. As it depends on an individual, it also becomes essential what is a skill and expertise a freelancer has. Expertise in high paying niche skills makes things easy for a freelancer.
- Scale Up – There is a limited time in a day an individual can work. So it becomes tough for an individual to scale up the business. Need partnerships and synergies to scale it up.
- Client Dependency – Solopreneurs and individual freelancers can’t work for more than a few clients at any given point in time. So if a large client moves on, it can mean a lot of impact on earnings for the freelancer.
- Uncovered Risks – No freelancer ever prepares for something that can go wrong. What if one day your computer doesn’t start? I have experienced it. So now, if my MacBook doesn’t start, there is very little I lose because I keep all my data on iCloud and DropBox.
- Working for the business – When an individual freelancer is working for the company to meet deadlines and complete the deliverables, he is doubtful to work on the business. There is very little work done on the planing a roadmap to take it to the next level.
- Price competitive nature – In some technologies like web design or data entry, clients are often looking to get the job done for as little as possible.
The threats in the SWOT Analysis of Freelancing
- Freelancing site shuts down – If a freelancer depends only on one site for clients, it can mean one can lose everything overnight if the account is suspended. Many freelancers who relied heavily on Elance for clients found it tough to thrive in the Upwork environment.
- Bad reviews and feedback – One bad rating on freelancing sites can mean a loss of many more business opportunities in the future. It can also mean no work from the site for the foreseeable future.
- Data Loss due to Hardware Failure – The computer doesn’t start. You consult a technician to get data backed up from the hard disk and found that your hard drive has crashed, and you can’t recover any of the data from it.
- No entry barrier – There is no entry barrier. One can start now and compete with the person that has decades of experience. As long as you can get the job done and provide value, you are more likely to win the project over the experienced guy.
- Accidents – Anybody can hit an accident. What if the individual has an accident.