In my work with freelancers, I see many great people who can create successful businesses for themselves with impenetrable reputations. A lot of them are experts in their industry and work tirelessly to make sure that they can keep their family fed. But where most fail is in managing their money. There are difficulties associated with earning sporadically, especially when having to chase overdue invoices. In this article are a few tips that have helped the freelancers I have worked with.
Being a freelancer in a saturated market can become extremely taxing and is competitive by nature, you will find that offering your services can become similar to attending interviews for full time work. The nature of this industry means that you can go weeks without having any work, or that you can work through periods where several different companies require your services. One of the most valuable tips to carry with you in this industry is to ensure that you are able to prioritise the jobs based on both your income, and of the experience you want to gain. Getting your name and services about within your respected market takes time, patience and expertise, so it’s important to know what you are getting yourself into, and that you have existing business contacts built up before you embark on this professional journey.
Be realistic with spending
As a freelancer you should be careful to set a realistic budget, depending on the income you expect to receive and regular outgoings.Anyone who is employed is expected to contribute taxes and every company needs insurance. It is essential to make sure you know how much these should cost and when they are likely to be taken out of your account. It is also advisable to seek out a specialist accountant who can help you fill out your tax returns.Just keeping a diary or spreadsheet of when your payments are due is essential to stop you from overspending beforehand.
Set saving goals
If you have room in your budget, try and secure some savings. You never know when you might have a quiet month, and saving during the busier months can be an essential backup to provide income. Savings can also come into handy if you need to purchase new equipment or upgrade your current equipment to fulfil a contract.You should think about saving for a pension. This is where a lot of freelancers can fall, and they find they need to keep working even when they hit retirement age.
Keep business and personal separate
While it’s hard to keep the stress of business out of your personal life, there are a few steps to limit the stress in the first place.When starting a business, you should setup a specialist business account. This can provide you with many benefits such as lower interest rates on overdrafts, and better options for loans. More importantly, is it easier to track your business income and outgoings. This is not only necessary for completing your tax information, but helps protect your personal income against any problems with the business or unexpected outgoings.To further protect your business finances, freelancer insurance will give you protection and advice if you are having any issues with clients, or if you are sick and unable to work for a period of time.