How Freelancers Can Weather the Coronavirus Outbreak

freelancer guide coronavirus

In the span of a few months, coronavirus has disrupted the economies of countries everywhere. Businesses and workers alike are struggling to keep up. 

Freelancers, especially, are faced with unexpected challenges that may harm their livelihoods. With freelancers comprising 35% of the U.S. workforce, they’re bracing themselves for the worst. 

Gigs are getting canceled. Companies are initiating hiring freezes. And discretionary project spending is slashed left and right. Moreover, freelancers and contract/gig workers lack many of the safety nets that traditional jobs offer. They’re not entitled to paid sick leave or time off that salaried employees enjoy.

If you’re one of these 57 million freelancers, you might be wondering how you can adjust to this new reality. Keep reading for five ways freelancers can prepare for coronavirus.

5 Ways Freelancers Can Prepare for Coronavirus

Whether your business has already experienced a hit or not, take these precautions to make sure you’re in the best place possible if COVID-19 affects your freelance income.

1. Enforce Your Contract

Before beginning any work with a client, you should always have a contract in place. It will outline the scope of work and your payment terms. With your contracts moving forward, you’ll especially want to add a clause for last-minute cancellations. Often called a “kill fee,” this clause entitles you to payment should your client attempt to back out after the contract has been signed and work has begun.

And with more businesses buckling down, you might have more than one client asking to cancel any pending or upcoming projects with you. If this happens, remind them that per your contract, backing out will incur a cancellation fee.

Depending on what contract language you use, the payment terms may vary. If a client cancels on you, you may want to charge by:

  • Number of hours already worked
  • Percentage of the project fee
  • Flat fee

You may also want to specify in your cancellation clause that you retain ownership over the work you’ve completed. This, at least, allows you to salvage the work you’ve already completed and then pitch it to a future client.

2. Obtain Insurance

If you’re a freelancer or other self-employed individual, you don’t have standard benefits provided by an employer, including insurance.  Instead, you have to obtain your own insurance as a freelancer. If you’re lacking coverage, now is a good time to change that.

Health Insurance

For certain health insurance agencies, the open enrollment period is over. In the wake of coronavirus, however, enrollment has reopened in some states for a limited time.

Even if you’re trying to reduce your monthly expenses, you shouldn’t skip health insurance. Some insurers cover the cost of COVID-19 screening and tests. When it comes to your health, it’s a prudent idea to follow the “better safe than sorry” philosophy. You’ll be happy to know you have insurance in the event that you’re slapped with a sky-high medical bill.

If you’re interested in registering for health insurance, be sure to check out this list of states offering open enrollment, and read our guide on health insurance for freelancers.

Unemployment Insurance

When it comes to financial aid from the government, freelancers and gig workers are often excluded. That’s why the freelancing community was pleasantly surprised by the newest coronavirus aid bill

President Trump recently approved a $2 million stimulus package that will aid Americans whose livelihoods were affected by coronavirus. Unemployment insurance varies by state but workers receiving it are usually paid about half of their weekly wages, up to a maximum benefit amount, according to the Center on Budget and Policy Priorities. Under the new stimulus package, workers will be paid an additional $600 per week, for up to four months.

Fortunately, this relief bill now extends to freelancers. If you’re worried about your financial prospects, this financial aid could help keep you afloat for a few months. To see if you’re eligible, check with your state’s Department of Labor, as the requirements and details may vary between states.

3. Assess Your Financial Situation

In uncertain times, you want to make sure you’re as prepared as possible. Here are some ways that freelancers can prepare financially.

Revisit Your Budget

In any economic climate, it’s pragmatic to have a savings and emergency account. A good rule of thumb to follow is saving at least three to six months’ worth of living expenses. Should anything interrupt your regular cash flow, you can rest easy knowing that you can afford your current lifestyle for a few months.

Not all freelancers, however, have such a financial cushion in place. If you find yourself in this situation, we recommend that you revisit your budget (if you don’t have one, be sure to check out our guide on how to create a business budget).

When reviewing your budget, see what unnecessary expenses you can cut. Perhaps there are certain subscriptions you can cancel. Or maybe you can reduce your food budget by cooking more at home. Nurturing a frugal mindset will serve you well during any financial dry spells.

File Your Taxes Later

If you haven’t filed your taxes yet, you might be pleased to learn that your first quarterly payment has been pushed from April 15, 2020, to July 15, 2020. This deferment will give you a few months to make some shifts in your finances if needed. 

This extra breathing space, though, may not apply to all states. Be sure to check with your state’s tax agency to confirm the tax requirements within your state.

Saving for Estimated Tax Payments

It’s worth noting that you should do your best to stay on top of your estimated tax payments. Unlike traditional employees where taxes are already deducted from their paychecks, freelancers must set aside state and federal taxes themselves. Accruing tax debt can land you in financial quicksand, and it can be challenging to escape. Be sure to factor your estimated tax payments when adjusting your budget.

Defer Payments

If you’re still paying off loans, some loan agencies may be willing to work with you to defer your payments. Those with student loans, for example, are seeing some relief due to the COVID-19 national emergency. For example, loans issued by the U.S. Department of Education will have interest waived. You may even be allowed to halt any loan payments for a specified period. To see if you qualify for student loan forbearance, you can review the details on the Federal Student Aid website.

Some credit card and utility companies are also deferring payments for those who need it. If you need extra time to pay your bills, call your utility companies or credit card provider. You may be able to negotiate a payment plan or deferment.

Open a Low-Interest Credit Card

Having a dedicated line of credit for emergencies can ease your financial stress. With coronavirus creating sudden economic shifts on a global scale, you may need to rely on your credit cards to help you through.

Even if you have an emergency fund, using credit can still be useful. However, be prudent with your spending—you’ll still have to pay off the balance, after all.

Leverage Your Resources

The COVID-19 outbreak is affecting the livelihoods of freelancers everywhere. And perhaps you need additional forms assistance than the ones we list here. The Gig Workers Collective recognizes this need and has compiled a list of resources for gig workers and freelancers. The resources range from rent assistance to medical aid. They also offer a breakdown of resources available by state. These programs can be your lifeline as you make adjustments in your personal life and freelance business.

4. Be Flexible With Your Skillset

While it may feel like our economy has ground to a screeching halt, freelancers are still out there hustling.

Freelancing often demands ingenuity. You learn not only your chosen skillset but also how to start a business and how to market yourself. Now is the time to leverage your resourcefulness to its fullest capacity.

Is there a market or need rising in response to the coronavirus outbreak? For example, look at content creators within the fitness industry. A quick search and you’ll see a rise in at-home exercise routines—perfect for those who want to exercise in quarantine. 

How can you apply the same philosophy in your own freelance business?

Maybe you’re a business consultant that offers seminars. How can you overcome the need for in-person workshops? Perhaps you transform those physical workshops into Zoom meetings. Or you can create an online course that is accessible to business owners and employees remotely.

How about gig workers, like freelance photographers, that rely on in-person photoshoots? Due to social distancing and event cancellations, you may struggle with finding regular gigs. Instead, you might need to rely more on related skills like photo editing. 

As our economy changes in response to coronavirus, so must your skills and business strategy.

5. Maximize Your Extra Time

If you’ve lost clients, you might have some extra time on your hands. Don’t make the mistake of squandering these precious hours. Here are some useful ways to fill in the gaps in your schedule:

Learn a New Skill

Let’s say you’re a freelance copywriter that specializes in sales pages. You’ve wanted to expand your skills to include email marketing but always struggled to find the time. Use this opportunity to register for that emailing marketing course you’ve been eyeing. 

Or maybe you want to make a dramatic shift in your business. Let’s say you’re a freelance photographer but want to transition from gig worker to entrepreneur. You can use your extra time to build a paid online photography course, creating a semi-passive income stream.

Increase Your Marketing Efforts

In some industries, your pool of prospects may have shrunk. But there are still clients out there who are seeking contract workers.

It’s your responsibility to put yourself in front of these clients. Your marketing efforts will help determine whether your business thrives, stays afloat, or struggles during this pandemic. Here are some ways to boost your marketing:

  • Double or triple the number of cold emails or cold calls you usually do
  • Update your small business website
  • Optimize your social media profiles for SEO
  • Build your email list
  • Grow your credibility with content marketing 

Keep in mind that finding clients is often a numbers game. The more cold emails you send, the more likely you’ll find a client. The more helpful content you publish, the more email subscribers you gain.

Use your extra time to multiply your output. Your upfront efforts will eventually be rewarded with high-paying clients and increased brand authority.

Enjoy Yourself

It’s easy to feel guilty about using your extra down-time for leisure. But maybe rest and enjoyment are exactly what you need. A healthy work/life balance eludes many freelancers. A mandated quarantine is the perfect opportunity to restore that balance. During this time, you can:

  • Catch up on sleep
  • Cultivate a hobby
  • Spend quality time with your family and pets
  • Declutter your home
  • Maintain a morning and evening routine
  • Follow a home workout program

You don’t need to spend every available hour on business development. Give yourself guilt-free permission to relax and recalibrate.

The Bottom Line

Yes, your business and cash flow might be suffering from the coronavirus pandemic. As a freelancer, however, you are not helpless. As our economy shifts, so can you and your business. In these uncertain times, we hope that you are staying safe, healthy, and productive. And hopefully, this article has empowered you to take action by preparing yourself mentally and financially.

Sally Lauckner

Sally Lauckner is the editor-in-chief of the Fundera Ledger and the editorial director at Fundera.

Sally has over a decade of experience in print and online journalism. Previously she was the senior editor at SmartAsset—a Y Combinator-backed fintech startup that provides personal finance advice. There she edited articles and data reports on topics including taxes, mortgages, banking, credit cards, investing, insurance, and retirement planning. She has also held various editorial roles at, Huffington Post, and Glamour magazine. Her work has also appeared in Marie Claire, Teen Vogue, and Cosmopolitan magazines. 

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