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A New Market Gets a New Measure: Independent Workers Earned $1.2 Trillion in 2013

A New Market Gets A Big Financial BoostThe independent workforce is up nearly 10% from 2011 — that’s some 18 million professionals generating over one trillion dollars, according to a new report. These independents, contractors, consultants, and freelancers are not only making a living for themselves, they’re providing work to others. To the tune of $96 billion.

How is that possible?

Here’s the math: more than a quarter of independent workers hire other freelancers, and this year’s MBO Partners State of Independence Report says that these approximately 18 million indies are putting the equivalent of 2.3 million fellow freelancers on the books. To a large extent they’re doing this virtually. The 2013 report reveals that the new virtual team-up is big business, with independents assembling into collaboration teams to meet customer demands.

“This year’s report shows the tremendous economic impact of independent workers,” says Gene Zaino, chief executive officer of MBO Partners. “And [it] validates that independence is more than a viable career path; it’s a job creation engine.”

And there’s no sign of slowing down. By 2023, it is projected that more than half of all private-sector workers will have logged hours as independent pros.

But who are these workers and where are they taking us, exactly? Let’s see what else the study’s numbers have to say.

  • Mainstream Presence: Independence is driving what looks an awful lot like a structural shift. MBO Partners’ 2013 workforce index, a measure created to track the private sector, shows an 8.2% growth since the base year in 2011. And the study’s authors expect growth to hit 24 million by 2018. As it stands, nearly 10 million households can credit at least half of their income to the work of independents.
  • Economic Engine: Independent workers have generated close to $1.2 trillion in total income in 2013. They also spend. When it comes to non-payroll/contractor outlay, on average, they’re putting down about $8,500 per year per solo worker — that’s $150 billion, annually.
  • The Confidence Factor: Sixty-four percent of the indies polled reported a high level of satisfaction with their work style — that’s down a bit from 2012, but still greater than in 2011. The study shows that 77% plan to continue as either sole proprietors (63%) or expand to a larger business model (14%).
  • Multi-generational: Of the 17.7 million independents, 1 in 5 are Millennials (21-33 years old), 36% are Gen X (34-49 years), 33% are Boomers (50-67 years), and 11% are matures (68+).

And here’s one more interesting detail from the report. Independence has a new name, or a bunch of them.

That is, according to MBO Partners, just 3% of independent workers chose freelancer as their primary title. Instead, the survey got responses that ran the gamut, from self-employed to business owner, contractor, consultant and entrepreneur. Seems the independent professional is building a whole new kind of persona. And they’re taking a seat in their own kind of corner office.

 

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Mobile Freelancer, Mobile Entrepreneur: 5 Budget-Friendly Approaches to Your Business Workflow

Freelancers and Mobile ToolsEntrepreneurs and freelancers manage their businesses online just as much as every other kind of owner and corporate project manager, but they often find themselves working with a limited budget.

“We can’t always hire someone to keep certain information organized and structured,” says Sean Mahoney, president and CEO of AndPlus. “Custom software and the use of mobile applications on the devices we carry each minute of every day offer the single and best opportunity for us to place the time spent usually organizing into running our businesses.”

From payroll and ops to low-cost personal-assistant apps, from idea-banks to team-collaboration tools, let’s look at some of the options that can work for the independent entrepreneur and freelancer on the go.

1. Focus on Cash Flow: Apps like Freshbooks ($19.95/month) and Outright (free; $9.95/month premium version) allow you to see your cash flow day by day as it relates to payroll and operations.

2. Task Flow is as Important as Cash Flow: Use task reminders as if they were a personal assistant. A shortlist to check out includes Wunderlist (free; $4.99/month premium version) , Wrike (free; $49–$199/month premium version), and Any.do (free).

3. Consolidate Your Creative Materials: Combine all of your notes, pictures, and recorded audio in one place, using an app such as Evernote (free; $5/month or $45/year premium version). No matter where you are during a day, all of your creative materials are searchable. This can be a life saver at a meeting, during an impromptu pitch, or in any situation that depends on your ideas being instantly at hand.

4. Keep Your Comm Lines Open: Communicate with your team on a platform that allows mobile and desktop interaction. A good place to start: Yammer (free; up to $8 per user premium version).

5. Customize When Ready: At some point, as either your budget grows or your workflow exceeds the free and low-price apps we’ve just considered, you’ll probably want to push your entrepreneurial/freelance toolkit into the customized space. Many of what are the most common actions online professionals needs to deal with every day can be integrated into personalized mobile applications quickly and easily.

“We now are allowed to move forward with our lives and running our businesses in the way we feel is most productive, not the way we feel we’re forced to,” says Mahoney.

The bottom line is, even without a massive line to draw upon, small-business and solo entrepreneurs can create dynamic management tools that put them on the same playing field as their bigger-budget counterparts.

 

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SMBs and the Online Workforce: Long-Term Relationships are the New ‘Gig’

Freelance Opportunities Are GrowingThere might have been a time when hiring freelancer online meant short-term contracts and cost savings for companies, but new research shows that employers are thinking differently about what web-sourced workers mean to a project.

Business owners are hiring at higher salaries and for longer-term arrangements, according to a new report by Elance. The study shows that 50% of the employers it polled are now bringing on online workers to handle multiple projects, not just one. And pay over the past year has increased by 69% year-over-year.

“I’m still re-hiring freelancers from just about every project I’ve done,” said Bill Calhoun of BillCalhoun.com. “Once you get your feet wet and establish a trusted relationship, it’s easy to hire again and again.”

Let’s look further into the numbers, and see what else the Elance study shows about owners such as Calhoun.

One of the trends in online hiring is that business owners are using web-based searches and platforms to find specialists in science, technology, engineering, and mathematics. Elance’s survey showed the following:

  • Demand for data scientists and statisticians is up 200%.
  • The demand for mobile-app developers increased 49% with continued growth in demand for iOS, Android and HTML5 skills. Demand for software application developers was up 62%.
  • The demand for networking and security experts saw remarkable growth with an over 300% increase in hiring.
  • The rise of 3D printing is pushing demand for computer-aided design experts in the U.S. The number of 3D-printing related jobs was up over 200% while the overall demand for U.S. based CAD talent grew nearly 70%.

“The ability to hire the best available person online and on-demand is becoming an essential strategy for agile businesses of all sizes,” said Fabio Rosati, chief executive officer of Elance.

If the numbers in the report bear a message, then, it’s that owners’ staffing strategies are more fully embracing the online workforce. And that leads to stories like those of freelancer Dave Russell.

“In early 2012 I was given a life-changing opportunity to work with a brilliant company,” Russell said. “It was initially just a 30-hour contract, but we got along so well that we continued working together—I was even invited out to Mountain View, California to meet everyone in-person . . . I’ve not only improved my skills, but I’ve also had the pleasure of meeting and working with incredible people.”

The concept of hiring-up via the Internet has become an everyday practice, and pay and contracts are enjoying the parity that comes with increasingly proven success.

 

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What Businesses Want: Collaboration and Group Work Tops New Survey Responses

Ideas and CollaborationYou might call it an idea generation.

A new survey suggests that collaboration is the driving factor behind business’s evolution in the global economy. We may well be among a new breed of increasingly online teams — teams who are defining an era, one group-project innovation at a time.

Conducted by Prezi, the findings in the report show a community that prizes creativity and the kind of bringing together of ideas that fuels growth. That’s a key message. Turning to the numbers, and the participants, we consider what it means for the thinkers and doers that are moving their companies forward.

Idea Economy, Idea Generation

The workplace is changing under the influence of the digital space.

From open-source developers to the advent of the freelance staff and remote-location interactivity, old-school structures are being replaced by something else.

“Our team brainstorms and exchanges ideas everyday,” said Mike Butera, CEO and founder of Artiphon, a Nashville-based company with employees all over the globe that has recently launched a musical instrument that combines iOS and hardwood. “We depend on real-time collaboration tools … to help us demonstrate our instrument to musicians and pitch to investors regardless of everyone’s location.”

Prezi’s survey shows what may well be evidence of the shift that’s manifest in that kind of work environment — a redefinition of what’s essential to how a project unfolds.

  • 97% of the survey takers said the best ideas are team-driven concepts.
  • With team-driven concepts are happening in real time, version control is imperative. 27% of those polled said losing that control is the number one impediment to success.
  • It’s the results that matter. Reputation isn’t a result. In fact, 42% of the respondents to the survey said creativity was more important than experience to a business team, and 37% said that efficiency took a back seat to creativity.

The numbers suggest a kind of proof is in the pudding mentality. Rock stars can be replaced by the next bright young players.

Further still, more than a quarter of the survey participants said that over the past five years their companies have dramatically increased their budget for design. In the realm of the idea economy, businesses want to see new concepts made real, and they’re willing to take the time to foster them. And they’re spending money to do so. Creativity, collaboration, and the ability to work as a group toward a new idea — these are the skill sets of the idea generation.

 

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The Small-Business Report Card: Mid-Year 2013

Small Business Report CardFor small-business owners, the key issue this mid-year is economic growth. Everything else remains a secondary consideration in mid 2013, and some of the numbers are surprising.

Even as Congressional Republicans met during the dog days of July to consider immigration reform, only 3% of owners polled in a new Rocket Lawyer survey said that the matter was a top priority for the country. And, surprisingly, a mere 10% tagged healthcare and the still-evolving reality of healthcare exchanges to be a major factor for them in the past six months.

Economic and small-business growth, however, remained at the top of the list.

Nearly half (43%) of the owners polled said it was the main concern they held for the remainder of 2013, and more than half (55%) said that their small business had grown — or even boomed — during the first part of the year.

Let’s look a little closer at some of these numbers, especially at those surrounding issues that one might have expected to be higher up among owner’s concerns.

Health Care and Immigration: Where SMBs Stand

The healthcare stats tell us that there are two things going on among the more than 1,000 owners who participated in the poll: (1) awareness versus non-awareness of the issues is about evenly split (2) a surprising number of owners who are aware aren’t especially concerned about the outcomes of these matters.

  • Just more than 50% said they are aware of the new healthcare exchanges geared toward small businesses.
  • When it comes to the Affordable Care Act, 59% who are paying attention to it say they believe the legislation will increase employee healthcare costs. However, 29% said it will have no effect.

Immigration issues seem to be more squarely in the radar, but there’s still a remarkable suggestion of ambivalence about the outcome — at least according to the numbers that came back.

  • Some 64% of respondents said they are aware of the immigration reform plan.
  • 23% of respondents said they support reform.
  • 28% claimed they do not support the reform proposal.
  • Nearly 50% said they do not know how they feel about the issue.

The Mobile Equation

What owners did seem sure about: mobile tech is become firmly entrenched in the way that they do business. Close to half (47%) said they use mobile apps every day for business purposes. Within those respondents, the answers break out further along demographics of age.

  • Gen Y (ages 18-30) and Gen X (ages 31-47) reported the highest rates of mobile use: 62% and 58%, respectively, say they use mobile apps every day for business.
  • Only 27% of those ages 67+ say they use mobile daily.

Finally, optimism about what respondents maintain is the main issue this year — growth — seems to be on the rise. That is, 74% of the respondents said they were hopeful for an even better second half of 2013.

“This is good news,” said Charley Moore, founder and executive chairman of Rocket Lawyer. “Main Street businesses are increasingly optimistic and focused on growth.”

 

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Mobile Pay and the SMB: 3 Tips for Now, How, and the Future

The Future of Mobile PayMobile payment is a new idea for many small-business owners. From the farm stand to the conference floor, swipe technology that turns smartphones and tablets into virtual cash registers stands to become the new norm, but implementing the apps and making sense of the process still represents a learning curve.

Like small business itself, the tech isn’t standing still, either. Magnetic stripes are on their way out, some say. Chip-and-PIN devices are picking up steam, say others. One thing’s for certain: it’s important to stay current with the latest mobile-pay possibilities and the best practices that go with them.

With some expert help, we take a look at the now, how, and future of mobile payment — a tip-sheet to help put your SMB on the cutting edge.

Mobile Payment: Getting Started (and Getting It Right)

“The U.S. is a great market for mobile payments,” said Dan Wagner, founder and chief executive officer of Powa.

Wagner offered the following ideas for implementing and refining the technology within the small-business environment, from day one to the point that even more sophisticated choices come into play.

  • Get out there. First, embrace the mobile payment idea as a strategy for growth. Mobile-payment technology is revolutionising the way small businesses can approach their clientele. “The idea is to mobilize your sales team and do business where your customers are, not where your registers have always been,” Wagner said. That is, mobile payments shouldn’t be a reactive addition to your business — something you implement just to keep up. It needs to drive the way you do business, going forward.
  • Trade differently. One example of driving the way you do business is to use mobile phones and tablets to extend your trading capability in-shop. Mobile payment can eliminate daunting line-time for customers during busy periods. They’re easy to bring out as second points-of-sale in an unexpectedly busy afternoon and multiple devices can be deployed by a number of staff over a predictably busy period, whether it’s Valentine’s Day for a florist or Christmas for a toy store.
  • Adapt (and Adopt). There are many different options out there, but one deciding factors should be compatibility. Be compatible; as magnetic stripe cards begin a phasing out process, investing in a mobile payments device that only accepts magnetic stripes will mean you could be left with an outdated piece of equipment. Small-business owners should also resist the temptation to invest in technology for the short term. Wagner expects that chip-and-PIN and near-field communication transactions — already common in Europe — are expected to become prevalent in the U.S. by 2015. Choose an interface that stands to stick around for longer than a few quarters.

Lastly, do your homework. The cost of taking transactions is another major issue that will affect your choice, Wagner cautioned. Some mobile payment devices charge considerably higher rates than others, so shop around before putting down your cash.

 

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The New Vacation: The Always-Connected Employee (and Why Employers Should Pay Attention)

Employees Working on VacationVacation is supposedly a time for relaxation and rejuvenation away from the office, but a new survey of more than 1,000 U.S. employees suggests that we’re not feeling very good anymore when we unplug.

In fact, many of us are not unplugging from work while we’re away at all.

According to a new survey by networking company Pertino, nearly one half of Americans say they are less stressed on vacation when they are connected to the office. And so, nearly 60% of the polled employees confessed that they regularly work — check e-mail, take calls, etc. — while on vacation.

So, if this is the new normal in our mobile-connected world, let’s look at how Americans are staying in touch with the office this summer, and what that means for the business owners for whom they work.

Employee Vacations Have Changed

One reason that employees work from vacation is that mobile tech has made the office only a click or swipe away.

In fact, 36% of the employees polled said that the beach was their office while on vacation, thanks largely to the ever present smartphone and tablet. Combined, these devices account for 81% of the ways workers connect when it comes to putting in hours from their vacation spots.

And while many are working from the locations where they’re supposed to be relaxing, the numbers tip a bit in terms of who is doing all this extra-office labor.

  • 64% of the men polled said they logged in from vacation.
  • 57% of the women polled said that working from vacation was now a norm.

The Vacation Security Problem: Why Business Owners Should Care

One problem with all of this remote connectivity is not so much that business owners are against the productivity that it breeds, but it’s that the way these employees are logging on can pose a threat. Here’s what the survey revealed about that:

  • 32% of work-from-vacation employees are using unsanctioned or unsecured cloud-file sharing services to access business-related data.
  • 35% of the employees in the survey are simply taking their devices away, loaded with important business files.

Neither of these are scenarios that small-business owners or IT departments want to face.

Rule one, when it comes to vacationing employees and remote access: your business’s policy has to be that they only log in via networks that provide authentication and encryption of traffic over public Wi-Fi and the Internet.

The Healthy Employee: Division of Labor and Play

Beyond the potential of compromised data, another overarching problem of employees working from vacation is that, long-term, they’re courting burnout.

What to do? Encourage healthy vacation habits when it comes to working off the clock.

If it’s almost impossible for many employees, especially senior managers and IT pros, to completely unwind while away, then a key to getting relaxed can sometimes be to not unplug.

But vacationing employees should instead develop a schedule that segregates work and play times. Communicate this division of hours to your family and work associates, then keep to it. Set aside a designated time everyday to connect with office and then spend the rest of the time focused on fun in the sun.

 

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Data Visualization for SMBs: Helping Make Sense of ‘Little Data’

Data Visualization for SMBs: Helping Make Sense of 'Little Data'Small-business owners are tapping Big Data more than ever before, but their demand for new data-based insights doesn’t mean that they’re immune to the overwhelming effect that a plethora of options and a flood of fresh ideas can bring.

If your sales team wants to see customer data put to use, give it to them in ways that they can use it on the go. That’s the message owners are communicating, loud and clear. Big Data analysis, meet “little data” delivery. Let’s look at a recent study that shows what that can mean.

Recent Study: Big Data in a Smaller Package

A new report from data-interaction specialists at Roambi shows the explosion of demand for Big Data — and also for simple, mobile, and non-traditional ways to share, use, and assess all this information.

Start with the follow stats: while 83% of the business owners polled said they’d discovered surprising things about their business via Big Data, more than a third of the respondents simultaneously found the scale of of the material to be overwhelming and/or anxiety inducing.

Perhaps it’s no surprise, then, that the top three spending priorities among the business owners, in early 2013, turned out to be:

(1.) Data-visualization tools

(2.) Mobile hardware and software

(3.) Big Data solutions to business-intelligence questions

These three points come together in the following way: it’s data visualization tools that have taken the lead, in terms of mobile apps — second only to e-mail — among the respondents. Specifically, owners said they want new kinds of interactive charts and graphs to highlight what Big Data has to tell them.

Beyond that, what about how we use such tools? The following section takes a look at strategies for telling Big Data stories on a digestible scale.

Scaling Big Data: 3 Steps for Business Owners

Having the right tools, like the ones the Roambi study addressed, is one thing. But bringing Big Data to your next business project also requires some scaling steps on your part.

The following tips emphasize ways to reap the rewards, when it comes to Big Data’s surprising revelations, all the while scaling the experience to a team-friendly presentations and making them accessible business-wide.

— Quality Over Quantity: It’s tempting to cram every juicy statistic or important metric into one robust chart, but the end result can turn out cluttered and overwhelming. Remove redundant information, background colors, and 3D effects. Data visualization is meant to add clarity, not confusion. Know what story you want to tell and identify the specific data that will help convey your key messages and persuade your audience.

— Think for the Small Screen: Bear in mind that most presentations are opened up on mobile phones or tablets. Scroll through a 1,000-cell spreadsheet on your smartphone screen lately? Applications that are mobile-ready are more affordable than ever, so explore and select ones that allow you convey your Big Data findings in bite-size and graphics-supported segments. Think mobile first.

— Take Your Data to the Cloud: Juggling multiple sources of data is enough to handle already, so take the burden out of management and bring your material to the cloud for secure, affordable, and convenient storage. Most of your key business apps are already in the cloud — it’s time for your data to catch up.

And so, the days of text reports, slideshows, and spreadsheets may be on the wane. The next generation of business intelligence demands new — read: mobile and cloud-based — tools that illustrate the trends and connections all this next-generation analysis can provide.

Data sets and the things they can do for business owners may be bigger than ever, but the way we absorb this information has to match that usefulness in your employees’ everyday lives.

 

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The SMB Will: How to Protect What You’ve Built

The Small Business WillLegacy is important. It’s crucial. It’s part of the reason we draft wills. And while it’s a given that caring for legacy is part of what we do when it comes to family, what about when it comes to the infrastructure and ideas that surround your small business?

“There’s a common misconception that a will is just about distributing financial assets,” said Charley Moore, founder of Rocket Lawyer. But company “owners also need ‘business-wills’ to make sure their businesses can live on, even if they don’t.”

Moore and his colleagues offered some advice on how to make a business will happen, highlighting estate-planning tips that owners can use.

  • Address Different Business Structures: When creating a business estate plan, understand the ramifications of the corporate structure you’ve selected. Sole proprietors, partnerships, LLCs, and S-corporations each present different legal challenges.

“It’s important to plan for both disability and death,” said Christopher Johnson, an estate-planning attorney who consults with Moore’s company. “For sole proprietorships and single-owner LLCs and corporations, make sure you’ve given thought to who could take over for you, and how they would do it. This can be done with durable powers of attorney and trusts, and making sure the agent or trustee can handle your business or hand it off to competent people.

“For entities with multiple owners, be sure you have a buy-sell agreement with the other owners and that it coordinates with your LLC operating agreement or corporation’s by-laws,” he said. “If you have an S-corporation, be sure to have ‘qualified subchapter S trust’ language in your trust to keep its tax status. And if you have a trust, be sure to transfer your company to the trust. You can use an assignment form, or re-issue the shares or units in the trust name.”

  • Create a Buy-Sell Agreement: This document details what happens should a principal member of the team leave the business, either voluntarily because of sickness or death.
  • Pick a Knowledgeable Heir: To protect your business in the future you need to designate a successor. Remember, no one knows your business better than you right now, but the next owner has to fill that role — so make sure the heir to your legacy has the smarts and know-how to run things in your place.
  • Death & Taxes: Whether you own your business yourself or share it with partners, consult an accountant, as the IRS offers tax breaks for death and estate taxes.

Digital Considerations

A new survey by Rocket Lawyer showed that 93% of those polled were unaware or misinformed about what would happen to their digital assets should they die.

Don’t leave the decisions about your business’s digital details to someone outside the loop. From your company’s Twitter account to the intellectual property sitting in your servers, each component of the increasingly cloud-based way we work is part of a well-crafted will.

 

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Online Careers: What a Workforce of 1 Billion Means

Online Careers: What a Workforce of 1 Billion MeansA new study of the freelance workforce tells us that there are close to one billion freelancers and that number is growing.

And what’s driving that phenomenon? Productivity, competition for high-quality talent, and reduced hiring frictions.

All of this may be paving paving the way for a future full of “yes” when it comes to small-business employers. Freelance professionals are enjoying fresh attention in 2013.

“What is clear is that online freelancing appears to be an answer to worker happiness in terms of increased flexibility and quality of life, as well as to increased financial independence,” according to an annual impact report recently released by Elance. From what’s driving freelance and business choices to how those decisions are affecting bottom lines — here are some highlights of the study.

1. High Quality Talent Is an Attractor: In the past year alone, there has been a 153% increase in freelancers online with skills in science, technology, engineering and mathematics. That means that employers are increasingly likely get used to searching for the right individuals with the right skillsets in the digital space. The longer that goes, on the more entrenched the concept will become.

2. Online Workers Like Their Independence: Sixty-nine percent that answered the survey said they were happier when freelancing versus working in a traditional onsite job. The average freelancer estimates they have 28 more personal days than they did working in a corporate environment. This is another recipe for keeping the online workforce of 1 billion at those numbers or better. Appealing work environments bring new participants. That’s just intuitive.

3. Small-business Owners Perceive Online Searches as a Competitive Edge. Hiring freelance talent to fill part-time needs suggests a competitive edge to 85% of companies, the study said.

4. Reduced Hiring Friction Helps Bottom Lines: According to a new measure of Labor Department data, the average hiring time under traditional methods is 23 days. That’s time and effort on the part of HR, and that’s lost or negatively affected productivity when a position is left open. By some measures, the survey suggests that online hiring can shave that turnaround to just 3.3 days. There isn’t a small-business owner on the planet who’d balk at that, if the skills and experience of the candidate selected are as solid as anyone hired under the old way.

If bottom lines go down for the employer, and incomes increase for those freelancers getting hired, then the future of this new way of thinking about workers and job fulfillment stands to become more and more the norm in 2014 and beyond.

 

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