There’s no freer business model than the freelance one. You’re able to be your own boss, work your own hours, and take on the customers you want. However, such freedom can also create uncertainty as you never quite know what your next project will be or where your next paycheck might come from.
For the unseasoned freelancer, such a concept can be daunting. However, the uncertainty will be much easier to manage if you implement some of the following ideas:
Don’t Overburden Yourself with Overheads
Taking on too many financial obligations as a freelancer isn’t always the best idea, particularly when your income changes from week to week. So, rather than taking on an office lease that bites heavily into your bottom line, consider the much more affordable and flexible option of serviced offices.
The lease-free arrangement of serviced offices means you don’t have to worry about whether you can afford to commit to a space long-term. Most serviced offices also come furnished, so there’s no need to purchase anything.
Set a Budget
Receiving that first big paycheck as a freelancer can be exciting. Suddenly, your bank account is looking healthy, and you may be tempted to treat yourself to a few luxury purchases as a reward.
Before you buy a new car or splash out on electronics, think about when your next paycheck will arrive and how much it will be. With inconsistent income a standard part of freelancing life, it’s essential to spread out your payments and make them last the distance.
Only spend what’s necessary for the average working week until you establish a pay structure that allows for regular income. Failure to budget may cause shortfalls you weren’t expecting.
Have a Plan B
No one likes to admit that their freelance lifestyle won’t allow for financial stability, but it can happen. You might have lost a client who contributed to the majority of your income, or you may get hit with a string of unexpected bills.
In that case, make sure you have a plan B. Though freelancing is growing in popularity, you may need to take on a second job or have an emergency fund you can tap into when you’re running low on funds. Sometimes, even just having a plan B can give you the confidence you need to take freelancing risks that lead to success.
Don’t Rely on One Client
One of the biggest mistakes both freelancers and businesses can make is relying on a single client to offer financial security. Even if one client does provide most of your income, make sure you have others who bring just as much to the table. If you were to rely on one client and they reach a point where they no longer require your services, you can be in significant strife.
Set Payment Boundaries
Some businesses are not always that concerned with paying their contractors on time. While it’s no inconvenience to them to manage overdue payments, it can have a significant impact on your financial stability.
Early on, set payment boundaries and enforce them. Send invoices with firm deadlines, and follow up with reminders when those deadlines are missed. Your clients should soon learn that you won’t tolerate late payments.
Being a freelancer can be challenging, especially as both your income and workload can be inconsistent. You may not even be sure if this is the right lifestyle for you. However, the tips above can be how you ride those waves of uncertainty and come out on top.