Prefer App Aims to Reinvent the Gig Economy with Client Relationships

The gig economy has given so many more options to professionals looking to provide services, and to businesses and individuals looking to hire skilled professionals. But the process hasn’t always been very personal.

Typically, when someone is looking to hire a professional, they might look for reviews online or even use an app to find the closest service provider. But now, there’s an app that’s aiming to make personal recommendations a bigger part of the process.Prefer App Aims to Reinvent the Gig Economy with Client Relationships

The Prefer App

The app is called Prefer. It’s one part review site and one part social network. Instead of simply searching for a service provider and seeing a one-dimensional ratings scale, you can use the app to connect with people you know and trust and then see their personal recommendations.

This type of thing could be a big win for those working in the gig economy. If you’re a professional who values building relationships with clients and providing really top-notch service, personal recommendations can be a whole lot more effective than a simple star rating that’s based mostly on the opinions of strangers.

Personal recommendations have always been a big part of how small businesses succeed. But for ages, those referrals have taken place mainly by word of mouth. If an app like Prefer can help businesses and professionals leverage technology to increase the reach of those personal recommendations, it could mean a big boost for the gig economy as a whole.

Currently, the service is only available in New York City. But those interested in using the Prefer app in other cities can sign up to be alerted when it becomes available.

5 Industries Struggling with the Current Economy

Now that the market is strong for many industries, and banks are feeling more generous when it comes to lending, entrepreneurs around the country are considering business startups. However, it’s important to recognize that the market has major ups and downs, and with 90 percent of startups failing, it’s best to avoid a tanking industry. Here are a few things you should know about struggling industries and how to avoid any detrimental experiences.

1. Oil

Oil and gas companies are struggling severely right now. While oil and gas experienced an economic boom at the end of the second quarter in 2014, things have made a turn for the worst. The number of operating oil rigs has diminished significantly, as the price of a barrel of oil has been cut almost in half since June 2014.

Hundreds of thousands of workers have lost their jobs as a result of uneven supply and demand. In the United States, oil production has nearly doubled over the last six years. It was booming at the start, but since that time, we can’t keep up with the endless supply of oil that has been drilled.

Though every oil company has taken a direct hit, many have been able to fight the economic downturn by improving their efficiencies.  This involves cutting capital expenditures and reducing debt. By cutting down on any unnecessary expenses and labor costs, these companies have been able to find a productive niche in a difficult economy. This will keep them going until the oil industry improves.

2. Gas Stations

As a direct result of the oil downturn, gas stations are also having a difficult time turning a profit. Gas and diesel prices are among the most competitive in the country, and since gas stations have had to lower their prices significantly to stay competitive, revenues have remained fairly stagnant. Sales have fallen 1.4 percent as gas stations struggle to stay afloat in an economy where oil is at a surplus.

Once again, the best way to fight against this struggle is for gas companies to improve efficiency. Reducing labor costs, improving facilities, and making employees more productive can reduce debt expenditures.

3. Grocery Stores

Though food is an ever-present need, small-chain grocery stores have struggled recently. This is mostly due to the boom of online shopping. Major retailers have begun providing online shopping for groceries, which makes it difficult for the little man to compete. In addition, big box stores often receive products in wholesale quantities, which means that they can offer far better prices than smaller stores.

Independent stores have their work cut out for them when it comes to beating out their larger competitors. In this instance, it’s best for storeowners to take a look at their marketing tactics. What can they offer to consumers that big stores can’t? Focus is generally on better customer service, weekly sales, event sponsorships, and local marketing. Even though large corporations are known for their better prices, smaller companies can be known for their pleasant atmospheres.

4. Metals and Minerals

Companies that specialize in metal-related industries have experienced a slight drop in sales over the last year, indicating that the industry is facing some challenges. The prices have been forecast to drop as much as five percent over the next year, as well. There is a direct correlation between the drop in oil prices and the drop in metalworking. The dollar has also been getting stronger, which has a negative impact on gold, aluminum, copper, and other metals.

Unfortunately, there isn’t much that can be done on the business end about the current reduction in metal pricing. This one relies heavily on the economy and its volatility. The one thing that could help would be if the Fed finally raised rates. This would help multiple areas of the economy, as well as debt reduction.

5. Paper Companies

Not only is everything going digital, but the economic movement is also taking a toll on the paper company. As more companies and consumers switch to paperless, paper companies are struggling to keep up.

Honestly, when it comes to paper, the outlook isn’t good. Even though paper is an important part of business processing and likely won’t die out completely, it will become increasingly difficult for paper companies to maintain their sales. The best advice is to take a look at products and services and consider how to augment them.

For example, instead of offering only paper products, companies can offer accessories, like printers and compatible technologies. Some paper companies are even turning to selling digital software in order to enhance their sales when companies decide to reduce their paper use.

The main takeaway from this discussion is that just because an industry is difficult, doesn’t mean you shouldn’t give it a try. If you understand the ups and downs of the industry, and how the market is currently operating, you’ll better understand how to turn the market around for your benefit. Once you jump into a struggling industry, your ideas for improvement will have free reign.

What’s Yours is Mine? The New Sharing Economy and Small Business

In recent years, many workers have found new ways to earn a living, becoming their own bosses as they enjoy a freelance lifestyle. Whether they’re offering rides to the airport through Lyft or Uber, or running errands through TaskRabbit, people are redefining the way they earn a living and blazing a trail for future generations.

But there are downsides to working this way. For freelancers, the unpredictability of work and changing pay structures make it sometimes difficult to make a reliable living. But for businesses and the American economy as a whole, the impact can be far more widespread.

Pros and Cons of Our New Sharing Economy

Pro: Growth of Outsourcing Opportunities

The increase in freelance workers gives businesses a great alternative to hiring full-time, salaried workers. Instead they can outsource work on a per-project basis and continue working with those employees if they do well.

Additionally, errand services like TaskRabbit give professionals the ability to outsource mundane personal tasks, like picking up dry cleaning or running errands. They can then focus on their own work. For traveling professionals, Lyft and Uber have proven to be a better alternative to taxis and public transportation, allowing them to call for a car and pay all on their mobile devices.

Con: Shortage of Skilled Workers

Unfortunately, a sharing society also means fewer professionals in the workforce. As the unemployment rate drops, this could result in there being a national labor shortage, where businesses scramble for help from what is a much smaller pool of skilled workers who are willing to work a structured office schedule.

The Millennial generation is now filling the workplace, and they have expressed their preferences for a fun and flexible workplace. The workforce of the future will require a performance-based workday rather than one that is measured by time clocks and traditional 40 hour work weeks.

Pro: Entrepreneurs Working Together

The ad hoc environment can be very good for business owners, who can take advantage of the large variety of skilled freelancers available.

More shared work spaces like Canvs are opening up across the country, providing desks and meeting space for a variety of talented independent workers and small businesses. Co-working spaces encourage collaboration, prompting entrepreneurs to learn from and help each other as they build their businesses.

These centers also serve to help build the local economy by encouraging business growth.

Con: Wage Degradation

There are some who are concerned about these shared labor concepts. Economist Dean Baker pointed out to the New York Times, that the wages workers make in these gigs can equate to less than minimum wage. He expressed concern that in time, this could create a downward pressure on wages overall that could impact the earning ability of mainstream America.

However, for the most entrepreneurial-minded workers, this type of work can help build the confidence they need to start their own businesses.

The new sharing economy opens opportunities for both consumers and workers, allowing people to work on their own terms. With the unemployment rate still high, this sharing economy is enabling people to make money while they wait for job opportunities to open up.

It seems to me that the freedom of being your own boss is empowering and has the potential to inspire many to start their own businesses – which benefits the economy as a whole.

How to Use the Sharing Economy to Benefit Your Business

Running a small business has a lot of perks to it.

A huge budget usually isn’t one of them, so small businesses have to continually look for ways to stretch a dollar and make the most out of the operating budgets they do have. Finding ways to save on expenses while increasing profits is necessary to stay afloat.

One way for small businesses to save on costs associated with running a business is to utilize today’s economy of sharing.

With the nation’s workplaces being filled with Millennials, companies are changing the way they do business. Instead of larger corporations keeping their cubicles filled with life-long, dedicated employees, companies are now hiring employees who are more caring, sharing, and have a lower level of commitment than their older peers in the business world.

For smaller businesses with fewer employees, this millennial mindset and the sharing economy, sometimes called “collaborative consumption,” can save money on operating expenses and raise profits if done correctly.

Let’s look at a few ways that small businesses can utilize the sharing economy and make it benefit the bottom line:

Raising Capital

Unless you’ve been stranded on a desert island for the last 5 years, you’ve likely heard of crowdsourcing, and the sites that aspiring entrepreneurs, those raising funds for medical expenses, and others use in their fundraising efforts.

Instead of going door-to-door selling wrapping paper or candy, or hitting up relatives for capital, small businesses can turn to crowdsourcing as a means for raising capital. Although video games and movies are the most funded projects in crowdsourcing, anybody can put an idea out there and offer special perks to those willing to invest in it.

Crowdsourcing can save time for businesses when raising capital, and also be an easier way to come up with funding than applying and qualifying for a traditional bank loan.

Business Trips

With business hubs in the United States being mainly on the east and west coasts of the country, there will most likely be a need for business travel now and then for small businesses.

Costs in transportation and lodging can really add up, and since ride sharing for airplanes hasn’t really caught on yet, businesses can save the most by using shared car rides and accommodations. Whether it be a ride to the airport, or to a meeting from the hotel, small businesses can save on transportation costs by using services like Uber and Lyft.

Small businesses can also save on local transportation by using these services instead of purchasing and maintaining a fleet of vehicles. Small businesses can save up to 50 percent of lodging costs by using services like Airbnb.

Outsourcing Small Tasks

Small businesses can outsource a lot of small tasks to outside providers. Handyman services, painting, cleaning, and maintenance can be outsourced to the lowest bidder on sites like AskforTask. You can also find the services of a logo designer, app developer, and writer from freelancers on sites like Fiverr.

Monetize Space

Do you have extra offices in your building that aren’t being used? Space for a cell tower? Unused parking spaces? You can turn all of these assets into money for your bottom line by utilizing the sharing economy to rent them out. In some cities, parking spaces are worth $50,000 a year.

Hiring Temps

Using a service like Wonolo, you can hire temporary employees to work just 3 hours, 3 days, or 3 weeks. You can even use these services to hire temporary to permanent employees. You can use a service like this just to find temps to perform menial tasks like sending out mailers, but more and more businesses are using them to fill longer term positions like web design.

When done properly, and small business can use collaborative consumption, or the sharing economy, to save money in the short term and the long run. Small businesses can also form relationships with individuals and other businesses that can be mutually beneficial to both.

37 Percent of Discussions on Gig Economy Negative, Study Finds

Media calls it the force that could save the American worker. But independent workers feel differently about the gig economy.

According to a new media analysis by Cision, on behalf of The Rockefeller Foundation, about 37 percent of overall discussions on gig economy is negative.

Clearly, there’s a “disconnect between news coverage of the independent workforce and the voice of independent workers on social media channels.”

Is the Gig Economy Bad for Small Businesses?

Highlights of Cision’s Media Analysis

The analysis identified four groups of independent workers: parents, retirees, recent graduates and small business owners.

Some interesting insights that emerged from the analysis are:

  • Most negatively toned discussions were on taxes, worry and insurance.
  • Retirees often go online with their questions about taxes and retirement plans.
  • Thirty-five percent of discussion from recent graduates were about looking for work, discussing additive work, or using gig labor to supplement income from a primary job.

“Workers are trying to find ways to make ends meet and they are going online to find advice from each other on how to do just that,” said Caitlin Jamali, Cision’s senior insights analyst.

Over one-third of the conversations about the gig economy are negative. Is this a sign of uncertainty or is the gig economy bad for small businesses?

Small Businesses Worried About Income

A closer look at the discussions led by small business owners reveals hourly rates and not being able to earn enough money are their top concerns.

It’s also worth noting that about 12 percent of the small business conversations are related to general worry.

Cision analyzed more than 540,000 news media and blog articles as well as 132,000 social media posts for the report.

What Founders Can Learn from the On-Demand Economy

Has there been a business model that has earned as much attention, funding dollars, and as many spin-offs as the on-demand model? Certainly not in recent memory, and certainly not so quickly.

But just a handful of years after the first on-demand companies rose to become economic powerhouses, the model is experiencing problems, and the many smaller companies in that space have to reinvent the system. The problem is multifaceted and is in part due to the sheer volume of companies competing for consumer adoption. Services that span the full range of customer needs are fighting for traction, and many are falling out.

Last year the sum of venture capital funding that was given to on-demand startups collapsed by 50% compared with the year prior. In fact, the on-demand model often referred to as the “Uber of X,” is also being called the “Uber of failure.”

But out of the mayhem, valuable lessons are slowly being learned. Watchful founders are identifying the symptoms of failure. The model can work when the right service is paired with the right operational support and the right vision. But it has taken billions of dollars in funding and hundreds of failed companies to understand what that mixture should look like.

Lessons to Learn from the On-Demand Economy

While by no means a comprehensive list, these are a few things that founders in and out of the on-demand economy can learn from the last few years:

Copy and Paste Doesn’t Work

It should go without saying, but even though imitation is the highest form of flattery, it doesn’t always make for a good business. That has been proven out in the on-demand space where hundreds of companies copied the Uber model with little to know innovation or even customization to the particular service they were providing.

Lessons to Learn from the On-Demand Economy

But by the same token, the on-demand companies that are still receiving venture capital funding and acquiring users are the ones who have built on top of the model. Scot Wingo, founder, and CEO of on-demand eco car wash service Spiffy put it this way, “Entrepreneurs who are succeeding in the on-demand space today do not operate like the original on-demand companies. They have changed their backend operations, changed their corporate cultures, and are going back to the basics of how to run a quality company and putting the customer first.”

Perhaps the single greatest takeaway is that the first responsibility of an entrepreneur is to innovate, even if only by a few degrees.

Fundamentals Still Apply

At the beginning of the on-demand era, there was an enthusiasm about the model that it was a gold strike. People rushed to open up their goldmine confident that they would also find incalculable wealth without needing to experience the drudgery of building a business in a traditional industry.

Of course framing any opportunity as a gold rush is easier to do in hindsight. In the beginning, it was hard to be a voice of reason and bet against something that had such universal appeal. But there were concrete signs at the beginning that ignored by many entrepreneurs.

No business model in the world allows you to ignore the basic tenets of good business. Every business needs a brand, a path to profitability (one that doesn’t assume the idea will go viral on its own), and core values that consumers can identify with. Most on-demand companies lazily attached their brand and values to the notion of convenience. But consumers want to be able to relate to a brand for its unique qualities – its commitment to excellence, passion for the environment, or desire to help the under served.

In other words, the fundamentals of business are essential in every industry, however great the hype.

Value is Greater than Hype

“Businesses solve problems,” says Wingo. “If your business is not solving someone’s problem or meeting someone’s need, it is not a viable business. So just because people have clothes does not mean they will use an on-demand dry cleaning service. There has to be more to the idea; a value proposition that connects with people.”

Good entrepreneurs have the ability to understand in a meaningful way what value is. Maybe it is instinct, perhaps it is just careful observation, but the most successful entrepreneurs can tell whether a value proposition makes sense or not. That is not to say that they are immune to hype and dollar signs, but that is the difference maker.

Testing every business idea against that principle is also what is changing the makeup of on-demand companies which are increasingly purpose-driven, slow growth, and laser focused on value. Wingo’s startup Spiffy has several of those earmarks, slowly launching in select cities, emphasizing its commitment to the environment, and using full-time employees instead of contracted workers. The industry is likely to see more changes as the winnowing of on-demand services continues.

Founders should pay close attention to those changes and learn from the on-demand saga.

Small Businesses Do 40 Percent of the Hiring in the Gig Economy, New Study Says

Over the course of the last decade, the so-called “gig economy” has rapidly expanded to become one of America’s most crucial labor markets. Around one in three American workers are now freelancers, and more than one third of Millennials.

And according to a new study compiled by LinkedIn (NYSE:LNKD), it’s small business owners that are the driving force behind that exponential growth.

The Gig Economy and Small Businesses

The Gig Economy and Small Businesses

Researchers at the world’s largest professional networking site found that small businesses are now responsible for an estimated 40 percent of all hiring activity across the wider gig economy, with midmarket companies and enterprises accounting for 35 percent and 25 percent, respectively.

The study also found that 93 percent of contractors and freelancers as a collective are likely to consider working at a small business — which comes in at three percent higher than the global average for business professionals.

Software and IT services tops the list of industry segments with the largest number of contractors and freelancers in the gig economy, boasting a talent base of some 223,000 professionals. Media and communications comes in second with 166,000 contractors, followed by healthcare with 164,000.

The Gig Economy and Small Businesses - Top Industries

It’s also worth pointing out that, according to LinkedIn data, 70 percent of all contractors who switched jobs in the past year also moved to a different industry.

“This means that if you’re not having luck with recruiting contractors within your industry, you may have much more success if you look outside it,” researchers said.

“The healthcare, real estate and construction industries have gained contractors over the past year, while public safety, retail, and the arts have lost them.”

The Gig Economy and Small Businesses - Industry Migration

As one might predict, the majority of that talent has migrated to either the East or West Coast.

Cities like Seattle and Portland have experienced a net population gain of eight percent over the past year in terms of available contractors, with San Francisco experiencing a six percent gain and New York’s gig economy increasing four percent.

That being said, Denver bucked the trend by posting an eight percent net gain in the size of its freelance pool. The survey also classed Denver as a “hidden gem” due to its high supply of freelance professionals, at approximately 38,000, but relatively low demand.

The Gig Economy and Small Businesses - Supply and Demand

Bearing in mind that the median job for an American contractor lasts for some 11 months, the study suggests that a substantial number of freelancers are indeed willing to relocate — with 13 percent of contractors who switched companies over the last year also moving to a new region.

The data from LinkedIn’s study is aggregated from a range of public LinkedIn profiles, with contractor status having been determined through member supplied position titles and behavioral analysis.

12 Rules for the New Economy

A few weeks ago I had the pleasure of speaking at a holiday event. Instead of one of my usual (but awesome) presentations, I wrote some thoughts on a piece of paper and shared what I thought these businesses needed to know to align themselves for 2015. Here’s what I shared. I hope these rules (guidelines) help you.

1. Word of mouth alone won’t work — relying on word of mouth for all of your marketing is “ok”. However, if you want to boost revenue, increase profits and take your business to new heights, you MUST create a purpose built marketing plan. Word of mouth alone won’t cut it.

2. Sales as usual is not enough. You need to educate with content marketing. — While traditional sales will always be important, you must also learn how to SELL through education. This means that instead of FIRST asking for money, FIRST take the time to understand the customer’s needs and educate them on the value your product or service has for them. Online content is a GREAT way to show value and educate your customers.

3. Barrier between small businesses who do use technology and those who do not. — While many business owners are leveraging the power of technology, there are still many business owners who are falling behind. These business owners are afraid of technology, don’t appreciate it’s benefit to them, fear it’s too expensive or some other reason. Which side of the technology barrier will you fall on? The tech laggard or those who use technology as a strategic asset?

4. Every business is ripe for displacement — this is the Uber economy. See what Uber has done to the taxi industry. See what Hulu, Netflix (the Internet) and RedBox have done to Blockbuster? Well it’s how OLD SCHOOL technologies have been disrupted and displaced by NEW technology and NEW ways of doing things.

5. Customers expect convenience, speed and efficiency. — Your customers are used to using apps to check in to airlines, having the Starbucks barista ask for their name, etc. If your business is not able to adore your customers and shower them with love and speed of business you’ll lose.

6. Personal brand solidification is a must (The Local Celebrity Entrepreneur) — Sure Nike has spent billions so we all know “just do it”, but you don’t have billions. You probably don’t even have a few thousand a month to spend on marketing. However, you MUST invest the time (and maybe some dollars) to build your personal brand. Be The Local Celebrity Entrepreneur in your market.

7. The phone is the tool of choice for everything (mobile web site and apps). Take your phone out — look at it. That tiny computer is POWERFUL. Ensure your web site is easily viewable on it’s tiny screen and enable your customers to interact with your business on their phones. Can they check orders on their phones? Can they use your app to engage deeper with your company?

8. Hyper local targeting — not targeting everyone. Instead of trying to go BIG it’s best to go even more narrow. Master marketer Casey Graham speaks about this with me here and Seth Godin most recently wrote about it here. Local does not just mean geography but it also refers to specialization.

9. Social media is not everything, but it’s important. F.R.E.A — Frequent, Relevant, Engaged, Analytics. You can read more about my thoughts about social media marketing here.

10. Your marketing must change — Attract. Sell. Wow. The principles of Infusionsoft’s Lifecycle Marketing — are VITIAL in how your marketing mindset needs to change. Check out my presentation on it here.

11. Design, how you look, is important. Logos, clothes, branding, business cards, etc. — Listen, how you LOOK, how you SPEAK, how you SMELL is important. Not just your personal appearance of course but also your overall branding — business cards, logos, web site and more. Upgrade yourself and OVERALL LOOK better!

12. Deeper connection to customers. (Wow) — Finally, beyond making it easier to work with you, you must always work HARDER to ensure you know your customers. What are their needs, their challenges and the problems YOU can solve for them?

5 Faces of the Gig Economy: New Study Reveals All (Infographic)

The gig economy is growing at a pace faster than some might have imagined. And driving it forward are freelancers who are redefining the modern workspace.

Not all of these people are gravitating to freelancing for the same reasons. A new infographic created by LinkedIn ProFinder and Intuit (NASDAQ:INTU) reveals there are five different types of freelancers in the gig economy today. They have different income levels, career objectives and motivations.

Types of Freelancers

Side Giggers

As the name suggests, side giggers are into freelancing because they want to earn extra money. As a result, they are most likely to have a traditional job as well.

These freelancers are driven by financial security and job flexibility. And their current gig helps them earn about 19 percent of their total income.

On average, they make $7,600 a year.

5 Types of Freelancers Revealed: New Study Reveals All (Infographic)

Substituters

For this group of freelancers, a gig provides an opportunity to make money after losing a job. They tend to take on multiple gigs and rely on them until a traditional job comes along.

Their current gig makes up for about 22 percent of their total income. They make $9,400 on average.

Career Freelancers

Career freelancers are the most diverse and satisfied group of freelancers. Their primary objective is to gain more experience and learn new skills to advance their careers.

They also look at gigs as opportunities for social interaction. Not surprisingly, this group mostly includes millennials who are into part-time freelancing.

Their current gig generates about 26 percent of their total income and they make $9,700 on average from freelancing, per year.

Business Builders

For business builders, gigs are an effective means of supplementing or expanding an existing business. These freelancers like being their own bosses and dislike answering to a supervisor.

Their current gig contributes to around 30 percent of their total income. On average, they make $12,300 a year.

Passionistas

These freelancers love what they do and it’s their passion that drives them to look for gigs.

They are well-educated, value flexibility, work the fewest hours, but earn the most per hour from their gig work.

At present, their current gig generates 25 percent of their total income. They make $9,000 a year, on average.

Planning to Hire a Freelancer?

As the infographic reveals, it’s worth remembering that not all freelancers have the same motivations. That’s why you should be careful when you hire one for your business. For example, if you are looking for someone to stick around for longer, you should probably not pick a substituter.

A good understanding of a freelancer’s job expectations and career plans can benefit your business.

For more information on the five types of freelancers, check out the infographic below:

5 Types of Freelancers Revealed: New Study Reveals All (Infographic)2

Images: LinkedIn, Intuit