Sharing for Dollars: The “Sharing Economy” Business Model

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Perhaps one of the most important lessons you learned in kindergarten was to share. And now, that life lesson takes on even more meaning if you’re an aspiring business owner. The sharing economy has made it possible to leap in the world of entrepreneurship using assets you may already possess.

What is a sharing economy?
There is no specific definition that accurately illustrates what, exactly, a sharing economy is. As Money Crashers points out, it’s been called many things including a peer economy, collaborative economy and gig economy. Whatever moniker you choose, a sharing economy is simply one that allows members to lend their assets to others for a predetermined sum.

Investopedia explains that the sharing economy has quickly evolved and is now an all-inclusive term that refers to any sort of online transaction initiated and completed by two individuals, or in some cases, two businesses, outside of a traditional goods and services relationship. A few examples of shared economy businesses include Uber, VRBO and ThreadUp. Freelancing platforms including UpWork and Fiverr operate as networks for people to come together and share their talents and skills. These connections are vital in a sharing economy.

Pros and cons
There are multiple pros and cons to this new type of economy. For one, freelance work allows an individual the opportunities and freedoms to work on their own terms. They can charge what they want for their services. It’s an attractive situation for people who like to travel and those with children still at home. On the downside, work is never guaranteed and there is always someone else with a bigger, brighter room for rent, vehicle to ride in, or more stylish outfit up for grabs.

Getting started
It’s not just enough to simply want to make money. If you want to be successful, you must be willing to take risks and adapt to your environment without notice. There are certain personality traits you can look for, including tenacity and problem-solving abilities that can give you a better idea of whether or not you’re suited for self-employment. Being an entrepreneur requires self-discipline and the ability to get up when you get knocked down. Always be prepared for success and failure. You’ll need to be a skilled multi-tasker and have the ability to understand the fundamentals of running your own business.

Once you have decided that you’re ready, you’ll need to decide what service you will provide and how much to charge. When determining your rates, keep in mind that you will be responsible for approximately 15 percent in employment taxes paid directly to the IRS. As an employee, your boss paid this; as an entrepreneur, you arethe boss. Start slowly and avoid the temptation to take on more than you can chew. One of the biggest mistakes you can make is failing to deliver your best to your first few clients. They won’t come back, and it may be more difficult to convince others that you’ve gotten your act together. When it’s time to grow your business, hold onto this mindset and go at a steady pace. Remember, you are a one-man (or woman) show and you can only stretch so far without flexing your abilities first.

Sharing economy gigs
There are no rules when it comes to what products or services you can sell. But a few ideas to get you started include:

  • Rent a spare room in your home
  • Rent your vehicle when not in use
  • Sell space on your car windows for companies to advertise
  • Rent your boat
  • Delivery groceries
  • Use your muscles to help people move
  • Walk dogs
  • Post social media updates for other small business
  • Utilize Skype to teach music

With nearly 50 percent of all Americans now working as freelancers or contractors, the sharing economy is only going to grow. If you’re not satisfied as an employee, there has never been a better time to become an entrepreneur.

Image via Pixabay