Creating a side hustle and a sustainable income stream is one of my key financial goals for 2018;
Upwork offers an excellent platform for me to leverage my skills as a management consultant to achieve the above goal;
Getting set up was super easy.
So it’s been a month since I started out on the platform and here are some results:
I bid for 60 projects;
I won 3 of them;
I generated $650 gross revenue in month 1; and $2,200 gross in month 2. Both revenue will be landing in their respective months;
I now have a client which will potentially be generating recurring revenue.
Here are my key takeaways.
1. Bidding takes time and patience
Upwork is flooded with cheap labour from countries like India and the Philippines for some reason (no disrespect to these countries, some of the best virtual assistants I found on Upwork were from there). Their approach is what I call the “carpet bombing” strategy: to send as many generic proposals as humanly possible in their general area of competency whilst offering extremely low rates, hoping that one or two will hit.
Nothing wrong with this approach. It’s just not how I would have done it as it’s an extremely inefficient use of my time. What this did mean was that I needed to have a different strategy to win my first clients.
I found that some projects were heavily bid(more than 15) whereas others were under bid. Having had previous experience as an employer in Upwork, I knew that as an inexperienced freelancer, my profile was likely to rank lower against the more experienced cohort. This meant my proposal would be less likely to be viewed if I applied to a more “crowded” job than the less “crowded” ones. The action I took to mitigate against this risk was that I always started with projects with less than 10 proposals in order to stand out.
Each Upwork freelancer is given 60 credits (known as Connect) each month to apply for projects, if you are on the Basic plan, which is free. Each project usually costs 2 credits. This meant I could apply a maximum of 30 projects per month. Therefore I blocked out 2-3 hours at the start of January to do nothing but to apply for as many projects as possible until my credits have been fully depleted. I then waited for them to be recharged in February and then did the same again.
I found that as a beginner, Upwork really was a number game – the more projects you applied, the more likely you were to win. Sure enough, I landed my first client after 3 days.
2. Projects can be very interesting if you have a niche
Upwork gets a bad vibe from some reviews and rightly so. There are some very menial jobs out there that would bore me to death (as a client that uses the platform to find freelancers, I can attest to that as I once hired a poor data clerk to enter 20,000+ rows of data on Excel).
Fortunately the niche that I specialise in can very fun and interesting: business planning, business strategy and advanced financial modelling. They require a portfolio of skills:
Advanced cognitive skills;
Ability to understand and communicate complex and abstract concepts effectively;
Highly numerical and logical thinking;
Able to present confidently in fluent English;
This means the funnel for suitable candidates immediately becomes severely narrowed and I was no longer competing with the thousands of low cost Indian workers who would happily to work for $10 per hour.
My field of competition was effectively against 4-5 other candidates from the developed economies, like the UK and the USA.
The first project happened 3 days after completing the first tranche of bidding. It was for an American entrepreneurs based in Thailand who wanted to start a fashion market research consultancy. He needed to a detailed cash flow projection to be created accurately in order to forecast his earning potential and the scalability of his business.
Right up my alley.
The project took just over a day to produce and he was extremely satisfied. I too felt fulfilled as it’s always delightful to be helping others whilst doing something I enjoyed and getting paid for it.
The second project is still work in progress. Technically I bid for it at the end of January but it didn’t start until February so I won’t recognise its revenue until February. The project involved creating a complete business plan for an American medical startup, which fortunately I have expertise in as I majored in Biochemistry. This project is highly complex and requires creative writing as well as financial modelling, thus it will probably take me 4-5 days to complete. In fact at the time of writing, I have completed the project and have landed 2 more gigs with the client. More details on this in the next update.
3. Upwork takes a good commission
Upwork gives you projects, provides the communication technology, handles payments, settles disputes. Obviously a platform with this level of functionality won’t be free. Indeed it current takes around 15-20% of my gross revenue through a tiered fee schedule.
Do I like it? Absolutely not! Nobody likes commissions.
Can I live with it? Hell yes. For every client I take on, I know full well that a payment has been deposited into its escrow account and my work will be valued and paid.
The fee schedule was created to incentivise long-term working partnership with clients (hence its regressive scale), therefore finding a recurring client would really boost your earning potential.
4. You are still trading time for money
So far I have generated a decent amount of revenue on Upwork. I charge $70 per hour or $500 per day, which definitely is at the top 5 percentile on the platform. However currently I am still a one man shop, which means that my earning potential is limited by the number of working hours during the day. This effectively means I am still trading time for money.
That’s OK, for now, because my 2018 aim is to generate a sustainable side hustle income, which Upwork is fulfilling. There’s zero pressure on its nature or the amount. All I needed to do is to persevere on the platform and see how far I get.
My first month on Upwork has been great. I generated $650 in gross revenue with a further $2200 lined in for month 2 (which has since been completed and billed). I am realising my goal of creating a side hustle income nicely.
Upwork is a great platform if:
You are willing to persevere despite rejections
Have a niche skill
Be able to take a more creative outlook on the nature of work.
However since I’m still trading time for money on there, I will be limiting the length of this project to 12 months maximum to see how far I get before shutting it off. Ultimately I want my side hustle to be generating passive income.