What the Gig Economy Means for Small Businesses

Work Life

Dec 26

Recently a report in the Globe and Mail highlighted the term ‘gig economy’. The report, which focused on independent entrepreneurs, said that new businesses are now using different models which range from operating out of their own websites to using platforms that facilitate these independent ‘gigs’.

A gig economy is an environment in which temporary positions are common and organizations contract with independent workers for short-term engagements. According to experts, the trend toward a gig economy has begun. A study by Intuit predicted that by 2020, 40 percent of American workers would be independent contractors.

Entrepreneurs like 32 year old Sam Burke prefer to use all online and offline advertising and facilitation methods to get their word across. Burke’s dog-care business Pugs of Anarchy has its own website and a presence on DogVacay.com, an online pet-care service apart from using traditional flyers, advertising on craigslist and running a Facebook page. Customers also help expand the business by word of mouth and recommendations to their friends.

She recently told the Globe and Mail that while her business could have been successful even without the online platform that pet-care service DogVacay.com provided, being present on the site helped her draw clients to her business. Because of the web portal, by the time she was ready to branch out on her own, she already had reviews and recommendations from clients.

Clients who had come in through DogVacay.com later stayed with her and used her services directy, she said.

This example indicates the growth of a gig economy. As more web platforms offer risk free methods of generating revenue and are reaching out to more people, more successful small businesses are born. This has led to a new type of entrepreneur.

Another example of gig based services provider is Toronto-based service AskforTask, an errand service, which claims to ‘get stuff done’. Types of gigs on the site include jobs for painters, plumbers, cleaners, etc. Small entrepreneurs can directly access customers without having to spend huge amounts on advertising, while customers too can benefit from the choices available.

While every gig service may not be as successful as an Uber, the gig economy is here to stay. The concept of bringing people with skills to people who need to use those skills is one that has long been a necessity in the online world. The concept of gigs also makes life easier for those using the website to order the gigs while providing sustainable income to the entrepreneurs who are enrolled on the portals to find new gigs.

As more people are becoming involved in the gig economy, demand and supply both are growing. The services of AskforTask, for example, are now only available in Ontario, but they are looking to expand across Canada in the next 12 months.

This type of economy does have some disadvantages as well. It is very easy for a business to go bad here since the next customer takes his decision on the basis of a review he reads online or a recommendation of a friend. And as more platforms emerge, customers are more likely to shift and seek out newer and cheaper options.

The entrepreneurs themselves have to bring their A-game to the online marketplace. They have to not only be well organized and provide top notch services, but also remain alert and provide good pre and post sales customer care. In addition to all of this, the portals take a percentage of the earnings made by the entrepreneur/gig worker.

On the upside, when these small businesses are sufficiently successful on these websites, they can move to their own webpage or run the business from their Facebook page.


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