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Peter Bellas: The new ‘cottage industry’

Entrepreneur’s Corner

Posted: September 18, 2013 2:00 a.m.
Updated: September 18, 2013 2:00 a.m.
Peter Bellas Peter Bellas
Peter Bellas

M ost people are familiar with the term “Cottage Industry”. It came from the 16th century phenomena of distributed production where workers produced and sold individual products (or portions of products) from their homes.

Economists have renamed the cottage industry concept to “protoindustrialization” which does not seem nearly as attractive but, I think a more apt analogy for the current time is “freelancer”.

There is debate over how many people fall into this category but surveys indicate the range is from 10 to 40 million workers. Part of what makes it hard to track is what the folks involved in this type of endeavor call themselves.

They go by freelancer, independent contractor or consultant, but they may just categorize themselves as business owner or self-employed. Estimates say that by 2020 as much as 40 percent of the workforce will be employed this way.

As more and more of the workforce moves to this form of work there are a number of services that are being created to assist them. Freelancers Union describes themselves as “a federation of the unaffiliated” and in addition to direct services they provide policy advocacy for their 250,000 members.

Another new trend is freelance “marketplaces” that assist in looking for project and contract work and may even help with everything from background checks to processing payments. Places like are fairly well known but there are literally hundreds of services, many of them niche focused, like for graphic designers and for writers.

Some of the most popular (and lucrative) freelance careers include graphic design, writing, language translation, photography, social media, mobile development, search engine optimization (SEO), project management and insurance inspection just to name a few.

Freelancing has its share of issues and hurdles to overcome but it is more and more becoming a preferred style of business for our generation Y population, who value the flexibility and variety. It is also becoming popular with baby boomers who have decades of skill and experience but only desire to do occasional part-time work, often in retirement.

Freelancing, particularly if unincorporated, may be one of the least paperwork-intensive forms of business ownership, but bottom line, you are still a business. You will need to investigate if licenses or permits are required for the work you will be doing. You will need to make estimated tax payments and report your earnings each year. You may need to complete W-9s with employers and deal with 1099 forms and perhaps issue 1099s if you are hiring other freelancers to assist you.

In addition to the required items above you will also need to consider what it will take to have a thriving freelance business; cost estimate and proposal documents, non-disclosure agreements, contracts and statements of work.

If freelancing might be in your future then College of the Canyons has resources available to help you. There are credit and certificate programs to gain the specific skills you need and the Small Business Development Center can assist you in making your freelance business a success.

Pete Bellas is the COC Dean of Economic Development at College of the Canyons. His column reflects his own views and not necessarily those of The Signal. For more information about the College of the Canyons Economic Development Division, call (661) 362-3521 or visit



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