Sixty Million People Make Up Gig Workforce, Larger and Potentially More Valuable than Assumed per McKinsey
Research from McKinsey & Company, one of the leading consulting firms, provides deeper understanding of the Gig Workforce. The Gig Workforce is the growing number of freelance workers,contractors and independent businesses since the Great Recession. In October, McKinsey reported that the gig workforce is much bigger than previously thought. “Up to 30% of working-age people in the United States and Western Europe are engaging in independent work, either as their primary source or supplemental source of income,” said Susan Lund, partner at the McKinsey Think Tank. About 60 million people in the U.S. are in the domestic gig workforce. Furthermore, 70 per cent of these people choose to be independent to have more creativity and more opportunity to learn and grow.
It was great to see that the study shattered the common perceptions that the gig economy was composed of primarily Uber and Lyft drivers. The report did not mention that many Uber and Lyft drivers may be between jobs while they look for professional or career satisfying positions. The report noted that these independents do grow into businesses and hire other contractors or employees.
What is important to me was the last line of the report which noted that gig workers represent all ages, genders, incomes and education levels. They acknowledge that “independent work is growing and we (in America) need to redesign what it means to have a career or a job.”
I am pleased to see that the talent and business moxie of 60 million people is finally recognized as an important sector of the economy.
My research indicates about 15% of independent workers and solopreneurs do form businesses and continue to grow. For those 9 million future independent growth businesses here are my three tips from transforming from a solopreneur to a business:
1.Validate customer demand and the profile of your ideal customer
2.Create a vision of success for your business and hold on to it
3.Learn about business at a pace you can absorb and make improvements in your business
1.Validate Customer Demand and the Profile of Your Ideal Customer
First, think about who your current ideal customers are who recognize your value. Write down the key characteristics of these customers. Also describe customers that do not work out as expected. You want to avoid taking on clients with those characteristics. For consumer products and services, business owners have to be specific about demographic characteristics of customers like age, gender, cultural profile and lifestyle. With public information verify the number of ideal potential customers and find out where they gather.
2.Create a Vision of Success for Your Business
If you and your family are dependent partially or fully on cash flow from your independent business activities, then plan and work to be successful. Start with describing, visualizing and setting goals for the success of your business. Be realistic and aim for a sales level that covers your baseline needs and allows for cash to invest in future growth. Growth may require a credit line or capital from friends, family or crowd funding.
3.Learn About Business at a Pace You Can Absorb and Make Improvements in You and Your Business Work
You are now in business so learn about it. You can start with free workshops on money management, marketing and sales, and staff hiring and management. It is also important to learn about yourself especially your strengths and weaknesses. Of course build on your strengths. If you are a good writer then improving your marketing and communications skills can help initially. But at some point you have to decide if paying for marketing and promotion assistance is better so you can lead your staff toward your vision of success.
As independents, we have to acknowledge our shortcomings and make improvements in our skills and behaviors. We have to be honest about our receptivity to making change or hire a specialist to just close the gap. Beating ourselves up or ignoring our gaps is non-productive. Our job as owners is to fix problems and keep moving forward. We have to manage the whole business to be successful.
I'm a Business Growth Consultant who wants to help the vast majority of small and mid-size businesses to grow. This blog shares content, resources and tools for business owners. Look for guest blog posts on related topics.