I suppose I should start this article with the caveat that I have only been self employed on a full time basis for about four months. I am not a financial expert or advisor - heck, I don’t even know what they really do in the city. I certainly don’t have a glass ball or any other means of seeing into the future. But I have an opinion.
If the media is to be believed (and I’m not doubting them) we are in the midst of a global economic crisis possibly more serious than that of the great economic depression of the 1930s. The banks have lost trillions, whole nations are going bankrupt, the cost of living is going through the roof, unemployment is on the rise, etc etc. ‘Doom and gloom’ doesn’t come close to describing the nature of this wretched pessimism and hopelessness that has dominated the news stands for the last few weeks.
Whilst I believe the media can be guilty of over-egging it from time to time, lets face facts: the banks have lost that money, my car is a lot more expensive to drive than it used to be, and people are losing their jobs. This is real. Yet I, and I say this with sincere modesty, am experiencing better times than I ever anticipated before I went self employed.
And looking around I’m not the only one standing with optimism: Benjamin Dyer believes the tech world has a lot to be positive about; Paul from Getextra cites evidence that Internet marketing may avoid the credit crunch; Catherine Ward-Brown writes in .net magazine how web agencies can position themselves to beat the credit crunch.
Is this fools optimism? Are we raising our heads above the financial parapet more in bemusement than optimism? Does the great economic depression of 2010 have our heads in its sight?
The truth is, as freelance web designers we have good reason to be optimistic. With slashed budgets, marketers may increasingly turn to email, viral and web marketing as they seek better value for money and return on investment. And when companies begin to lay off staff, it is often the freelancer who benefits when they step in to complete the work that starts overflowing.
But before I give the categorical (and naive) impression that there’s nothing to worry about - credit crunch, what bloody credit crunch - let me pour in a massive dose of realism. Today has been dubbed as Momentous Monday, there is a feeling within the media that the worst may have passed… for the banks maybe - but for you and me, this thing ain’t got started yet!
The credit crunch is but one contributing factor to a myriad of combining forces that will ultimately lead us into a recession. How deep this downturn will be is anybodies guess, but no one is in doubt that it’s coming. To say that anyone, no matter what their industry, will fare better than anyone else, is massively premature.
If the last few weeks have taught us anything, it is that it’s impossible to know what lay around the corner. If, for example, the local web design agency goes under - that’s a dozen more freelancers working on my patch. If for any reason the work does dry up, then it won’t be many weeks before I’m twiddling my thumbs wondering how to pay next months bills.
The truth is, we are heading into uncertain times. Optimistic we can and should be, but cautious we must be too.
Are you noticing the downturn?
This article posted in response to reading Sarah Parmenter’s thoughts on the topic. How about you, are you noticing a downturn or is business better than ever? Have you taken any actions to minimise the effects of a downturn?
8 fantastic comments
I’ve got to say that I’ve been busier this year than I ever have before.
Of course it’s not all down to the ‘credit crunch’ I would naturally expect my business to grow year on year and I’ve completed some really high profile jobs recently which have helped a lot.
But still, I’ve been making lots of money myself and many of my jobs have been working for new startup companies who certainly haven’t been put off by the current situation.
I can’t help thinking that the ‘credit crunch’ is over hyped. Even taking it’s meaning literally, i’ve had no squeze at all put on my credit either.. quite the opposite, my credit card companies are only too keen to extend my credit limit without me even requesting it.
Great article Aaron, it’s certainly food for thought isn’t it. I don’t expect for one minute the storm has passed, as you say, it’s only the beginning and it’s going to be an interesting wave to ride with everyone.
Great post Aaron. I haven’t felt any sort of hit from this economic downturn…and I live in the States where it is even more serious than the rest of the world right now in terms of how fast it is crashing.
Last week was one of the most historic that the US stock exchange has ever seen, yet the number of inquiries from potential clients my company received last week was a record high! It is true that some businesses take economic downturns and use them as a chance to market more effectively…but I did not expect it to happen the same week as the market crashing below 9,000!
I will be applying for a mortgage soon and it will be interesting to see if I am still approved …I was about to buy a year ago and was approved fine…but I am not so sure about it this time…loans, mortgages etc are going to be tough to get from here on in for the next few years I think.
I moved back to Northern Ireland with the intention of finding a mortgage (Edinburgh prices aren’t very appealing), but will be holding off for a while yet, as I expect prices to continue falling until the market ‘rights’ itself.
There’s something seriously wrong when a property you could rent for £500 per month needs mortage repayments of £1,000 per month.
Brian, good luck in your own mortgage search.
Anyway, back on topic, business has been great for me, so I’m in agreement, Aaron. Freelancers and those with low overheads are in a better position than most in these times.
@Shaun - Glad to hear business is good. It seems a lot of people are saying that too. And I agree I’ve had no shortage of credit card companies littering my mailbox with crap. I just hope we’re still saying it’s over hyped this time next year.
@Sarah - Yeah, probably a wave we’d rather not be riding, but here’s to us posting about this next year and how we got through it!
@Brian - Good luck with the mortgage app. Hopefully with the hundreds of billions of tax payers money the banks have received of late, you’ll be alright. If not, then I think as a tax payer you’d have good reason to be a bit annoyed!
@David - Also, glad to hear business is good. Good luck with your own property search and mortgage app.
People who are out of work are often forced to get creative, so many are launching new online initiatives, which is great for us! But I’ve noticed a lull in activity from established small businesses.
Aaron, that’s a great article. I am glad things are going well for you in the land of self employment.
I really do think we have a lot to be positive about, our industry has a resilient ability to bounce back and people turn to us to find cheaper better solutions. That said there is going to be pain and we will all feel it.
Hi Aaron,
just like David and Brian, I have not been effected by recent work requests. Infact, it’s quite the opposite. The trouble is, I feel clients are looking for cheaper quotes…but at least the work is still there. I think now more than ever, designers ought to expand their skillset into Marketing, especially online..this is where the money lies.
Not that ant true designer does it for the money, but reality does bite! Great post…
What are your thoughts?
