With technology increasingly intertwined with all aspects of business, [email protected] can help you — from prosumers to small businesses with fewer than five employees — get started.
The self-employed worker is becoming increasingly popular among software vendors.
And there’s a good reason for that. There were 15 million people self-employed in 2015, according to the US Bureau of Labor Statistics. That sum equates to more than 10 percent of the workforce. These self-employed workers generally have anywhere from one to five employees.
Meanwhile, Accenture estimates that the workforce will become more liquid as contract and on-demand workers surge. The management consultant estimates that nearly half of workers will be contractors, freelancers and small businesses.
Intuit’s August fourth quarter earnings highlight the market for self-employed workers. Intuit CEO Brad Smith said the customer base for QuickBooks Self-Employed has quadrupled over the past year. Intuit has been quick to add features such as the ability to separate personal and business expenses.
Smith also noted that Intuit has been bundling TurboTax and QuickBooks Self-Employed. The bundle enables the self-employed to track and deduct business deductions. Intuit had 390,000 self-employed subscribers to QuickBooks Online, which has 2.38 million subscribers.
“Self-employed is one of the more exciting things I’ve seen in my 15 years here. We talk about a total addressable market of 800 million small businesses around the world. 750 million of those qualify as self-employed or businesses of one,” said Smith. “Today, this is about 34 percent of the workforce around the globe. It’s going to be 43 percent in the next handful of years. And it’s a very real phenomenon.”
Smith said that the aim is to add features that enable self-employed people to manage cash flow, find new gigs and link up with accountants and other service providers.
Intuit’s push into the self-employed market was prompted in part by competition from Xero, which offers cloud accounting software and launched mobile tools for self-employed workers. Xero, which recently passed the 1 million subscriber mark, was specifically targeting the gig economy.
Xero CEO Rod Drury has said the company is betting on artificial intelligence to automate tasks for small businesses. In Xero’s fiscal 2017 earnings release, Drury noted that the company anticipates a “shift in employment from large enterprises to small business and an increase in part-time employment” globally.
The self-employed growth market theme also emerged as Indian software provider Zoho launched an all-you-can-eat buffet of apps called Zoho One. Zoho makes a bevy of applications to manage finances, customers, documents and workflow and has historically charged for each service individually.
Under Zoho One, companies pay $30 a month for about 35 applications. Raju Vegesna, Zoho’s chief evangelist, said Zoho was initially targeting small businesses, but has seen strong interest from consultants and contractors. “We are targeting anyone who does work. This isn’t a traditional way of looking at the business market,” he said.
FreshBooks, which recently raised a funding round of $43 million, has also been targeting self-employed workers. The company’s cloud accounting software is layering in analytics to help the self-employed price their services in major markets such as Seattle, San Francisco, New York and Austin.
What FreshBooks found is that self-employed creative professionals charge a median rate of $60 an hour and earn more than similar workers inside a company. FreshBooks is focused on the self-employed business owner and its software includes expense tools, automated invoicing, time tracking and collaboration for contractors.
Bottom line: This duel for self-employed workers will mean that the [email protected] base will have more options and innovation among cloud service providers.