{"id":16382,"date":"2018-12-03T12:37:25","date_gmt":"2018-12-03T19:37:25","guid":{"rendered":"https:\/\/honeybook.site.strattic.io\/?p=16382"},"modified":"2024-05-27T08:22:22","modified_gmt":"2024-05-27T15:22:22","slug":"finance-payment-report","status":"publish","type":"post","link":"https:\/\/hbb.dev.reliablepenguin.com\/blog\/finance-payment-report","title":{"rendered":"2018 Finance & Payment Report: Why the Creative Economy Needs Gratuity"},"content":{"rendered":"

In today’s economy, we see many workers who either take on a side hustle or leave full-time employment altogether to pursue more flexible or creative work. <\/span><\/p>\n

Ride-sharing services typically snag most of the headlines in the conversation around flexibility, but the reality is that there’s a boon of workers across many sectors turning toward flexible work arrangements focused on high-touch creative services. Self-employed creatives, like the ones on our platform, are one major collective of this workforce.<\/span><\/p>\n

These creatives are highly skilled workers who are almost always passionate about the type of work they perform. They include photographers, graphic designers, web designers, small business consultants and artists, among many others. While they differ from ride-share drivers when it comes to the level of passion about their work, they do appreciate many of the same benefits of flexible work arrangements: the ability to build their own schedules, control how often they work and determine which projects they’d like to take on. And of course, they all need a paycheck to sustain their day-to-day livelihood.<\/span><\/p>\n

As the voice and measure of the U.S. self-employed, creative economy, it is important for us to understand and address trends around how they are getting paid (or not), and that\u2019s why we surveyed these workers in October 2018.\u00a0Read on to see the findings of how payments are affecting creatives.<\/span><\/p>\n

METHODOLOGY<\/b><\/h2>\n

HoneyBook<\/a> surveyed 1,162 self-employed creatives on its platform to better understand their approach to payments and, more importantly, ways to help them.\u00a0\u00a0<\/span>
\n<\/span>
\n<\/span>This survey was fielded from October 4 through October 17, 2018.<\/span><\/p>\n

KEY FINDINGS<\/b><\/h2>\n

One of the most interesting topics we uncovered was around the role tipping plays in payments.\u00a0<\/span>Overall, 76% of self-employed creatives do not even consider asking for tips.<\/strong>\u00a0Unsurprisingly, <\/span>only<\/b> 9% claim they \u201coften\u201d or \u201calways\u201d receive a tip<\/b>. These two findings, meanwhile, are juxtaposed against the startling statistic that <\/span>78% of self-employed creatives worry about making ends meet<\/b>.<\/span><\/p>\n

\"HoneyBook<\/p>\n

Taken together, these statistics highlight a significant missed opportunity for self-employed creatives. Indeed, the data found that those who prompt tipping are <\/span>almost 50 percent more likely<\/b> to be tipped.\u00a0<\/span><\/p>\n

\"HoneyBook<\/p>\n

Beta trials of our Gratuity feature show that, apart from those who are already “often” or “always” getting tipped, self-employed creatives and freelancers who use Gratuity have the potential to earn an additional $4,558 per year.\u00a0Looking at the photography industry alone, this rate could add over $200 million in tips annually <\/b>in photographers\u2019 pockets.<\/span><\/p>\n

That\u2019s why HoneyBook wants to equip America\u2019s creative class to grow their business and increase their profitability by making tipping a standard and enabling an optional tipping functionality on <\/span>invoices<\/span><\/a> to boost their bottom line.<\/span><\/p>\n

THE NEW WAY TO TIP<\/b><\/h2>\n

While\u00a0<\/span>76% of the surveyed self-employed creatives do not prompt tipping, ride-sharing services like Uber and Lyft prompt tipping after every ride. Lyft has included tipping as part of its app since launching in 2012, while Uber added the feature as recently as May 2017 after increasing pressure from its drivers. While the actual percentage of how many passengers tip is inconclusive, both Uber and Lyft are <\/span>reporting increases<\/span><\/a> in overall frequency. This highlights how tipping flexible workers is becoming more habit forming.<\/span><\/p>\n

Point-of-sale solutions like Square and ShopKeep also see evidence of increased tipping for counter services. Often referred to as \u201cguilt tipping,\u201d a customer taps on a percentage or dollar amount at the moment of payment, or the \u201cno tip\u201d feature. <\/span>According to the Emily Post Institute<\/span><\/a>, an authority on etiquette, patrons should offer occasional tips for exceptional counter service but not feel obligated to tip every time.<\/span><\/p>\n

For HoneyBook\u2019s community and other self-employed creatives, it\u2019s important to keep in mind that ride-sharing services and handing someone a pre-made muffin are vastly different from services like planning a wedding or taking family photos. The latter are far more emotionally charged and allow for many more client interactions that could justify a customer being comfortable with tipping. <\/span><\/p>\n

\"HoneyBook<\/p>\n

TIPS ADD TO YOUR BOTTOM LINE<\/b><\/h2>\n

The data shows that the saying \u201cask and you shall receive\u201d holds true\u2014or rather, \u201cif you do not ask, you shall not receive.\u201d For example,\u00a0a report <\/span>commissioned by HoneyBook in October 2017<\/span> found that despite the fact that 73% of creative entrepreneurs, both male and female, hold bachelor’s degrees, over a third of the female creative entrepreneurs still make less than the minimum wage in 15 states. One of the reasons? The top reason reported was the lack of confidence in asking for more, charging a woman\u2019s worth and negotiating with confidence.\u00a0<\/span><\/p>\n

In this case, HoneyBook members who received tips in a beta trial of its Gratuity feature added, on average, 15% more to their bottom line.<\/p>\n

\"HoneyBook<\/p>\n

Self-employed creatives are averaging approximately $1,395 per project with an average of 5.2 projects per month. Those who receive tips are adding to their bottom line, <\/span>with no additional time or operating expense required<\/i><\/b>. <\/b>Thus, these tips only increase net margins.<\/span><\/p>\n

Of those who do receive tips:<\/p>\n