Financial Tips for Freelancers

Financial Tips for Freelancers

Finance management

While being self-employed comes with a variety of perks, including remote working and choosing your ownflexible hours,it also comes some potential difficulties, such as lack of job security and having to manage your own finances. Starting out as a freelancer can seem like a daunting process: how do you find clients, negotiate costs, handle cash flow and put money aside in case of emergency?

As experienced freelancers will tell you, it’s not easy, but it is possible. Whether you’re just entering the world of self-employment, or you’re an established freelancer in a spot of financial difficulty, read on for top financial tips for freelancers.

Invest in yourself when looking for work

As any established brands worth their salt will confirm, a marketing budget is absolutely vital to success; as the age-old adage goes, “You’ve got to spend money to make money”. As a freelancer or self-employed worker, you’ll need to invest in yourself and your brand in order to secure business. Investing in yourself could mean paying to have business cards made, or securing yourself a web domain and producing a website. It could mean hiring an expert careers coach or renting a studio space. The way in which you initially invest in your business is dependent on what you think will best bolster your chances of success. Most importantly, you need to consider the value of every investment carefully: how much will it help you succeed, can it be purchased further down the line if all goes well, or is it truly a necessity for you to get started?

Many professionals would insist that a website is a crucial business tool, regardless of the type of work you are in. These days, there are lots of free and inexpensive tools to help you build your own website, saving you costly web development fees that you may not genuinely require. Also, consider the role of social media in your business or brand. Social media can be an effective, no-cost platform to sell your offer. However, it’s worth identifying which medium works best for you. LinkedIn might be the ideal platform, whereas Twitter may not be, or visa versa.

What to do if you’re not getting work

Sometimes, regardless of how much you try, work is hard to secure. It happens in all sectors, in all businesses, across the world, at some point, so try not to worry. Nevertheless, it’s good to have a contingency plan in place should you come into somewhat of a work drought. Try to plan in advance while work is in a steady flow, and put some money aside to act as a buffer for any future slow periods.

If you feel like you can’t understand why you’re not winning work, after all, your name is out there; you’re approaching companies for business, your portfolio is sound. However, have you considered your credit score? It might sound bizarre, but some companies will assess your credit rating before offering you work, especially if your role will revolve around that business’s financials. If you have any concerns that your credit score is affecting your employ ability, there are a number of reliable and professional credit repair companies who can help you regain a healthy rating.

How to negotiate fees and learn to stand your ground

The majority of people don’t like talking about money, and it can be especially nerve-racking to enter into the world of fee negotiations as a fresh freelancer. Rest assured, not all negotiations are truly like a scene from The Godfather. As long as you approach negotiations with a figure in mind, one that you’d be happy to attain, then you’re stepping off on the right foot.

If you worry you’ll get nervous when negotiating, there are simple techniques you can adopt to help you feel more in control of the situation. Some would say that as a freelancer you shouldn’t reveal your desired fee first. Instead, you should rather let the client suggest a figure and then negotiate from there. Don’t be afraid of silence, give yourself time to think, and then you can respond. Similarly, you might want to consider starting high, higher than you’d expect the job to be worth, assuming that your client will start low. Then, you should hit a happy medium that both parties can agree. If you feel you’re being bargained down on your desired rate, you can turn down the offer should you wish to. You should consider your current situation, this strategy may work when you’ve got other prospective work in the pipeline, but less so if things are looking tight.

Invoicing: state your terms to ensure control over your cash flow

Once your employment contract is in place, and you’ve completed the work, you’ll need to submit an invoice for your payment. You’ll find lots of helpful tools and templates for invoices online, but remember to state your payment terms clearly.You don’t want to allow clients to take many months to complete the payment, as that might put a strain on your planned outgoings. As a general rule, the clearer and more informative your invoices are, the faster it will be processed. Therefore, you want to make it as easy as possible for your client to put through your payment. Use job names, or agreed ID codes, explain the work in clear quantities (either how many days you spent, or specific tasks performed) and consider stating itemized costs if you believe this helps explain the final total. Think about what information will help make your request clear. Don’t be overzealous, imagine if you were receiving this invoice, would you know what to do with it?

There is a myriad of reasons why people choose to become self-employed or a freelancer, but they are all joined together in need to be smart with their money. Hopefully, these tips will make you feel more prepared to take on the adventure of going it alone.Remember to invest in yourself to get the ball rolling, negotiate hard and be upfront with your payment terms. Then, you’re setting yourself up for success.