Freelance Finance

  • Poll: Do you request part payment before starting a project?


    I’ve been chatting to some freelancers recently about requesting payment for freelance projects before commencing with the job. Not the full amount necessarily, but a decent enough percentage. I have to admit, this isn’t something I’ve practiced. Perhaps because my clients in the past have mainly been long-term, social media or blogging clients where asking for part-payment first wasn’t necessarily required. But now I’m working with more short-term clients and projects, it’s something to consider. We’ve all had to deal with clients who don’t pay or pay late, so this could be a great solution, plus it proves they’re serious about the project.

    In fact Samantha Sparrow, who deals with many freelancers and contractors in her role, explained that not only do many companies understand freelancers asking for a part-payment up front, but they expect it.

    So, I’d like to ask two small things of you today. First, to vote in the poll below to let me know if you ask for part-payment before commencing. Secondly, to let me know in the comments what your approach is. Any advice really would be welcome, as this is an area I’m really not experienced in.

    I personally would love to know what the general consensus is, and I’m sure plenty of other newer freelancers would too!

    So, vote here:

    [poll id=”13″]

    Then comment below…

  • What to do during the freelance famine periods

    One of the handy things about blogging, is that sometimes it helps you address issues that you’re pondering yourself. Sometimes it helps to get things down on paper to clear your thoughts and come to a solution that can help you or your readers.

    Earlier this month, I had a run of misfortune when several of my biggest clients had to end my contact due to budget cuts. Many of them are clients I’ve had since I started, so it left me feeling a lot less secure. Especially with a mortgage to pay and a wedding to save for. This, by the way, is why you need a freelance savings account. For those months when money is tight.

    Looking on the positive side, losing those contracts wasn’t reflective of my services or quality of blog posts. But it did result in a knock to my confidence, as well as to my income. But sometimes, these things happen so you can take on brand new challenges.

    Having spent a while thinking through my options, I’ve come up with a few things to get you (and me) through the tougher times.

    1) Take a breath and reflect.

    To be brutally honest with you, I’m awful at dealing with the emotional side of losing clients. I’m very practical, so emotions often get swept under the carpet. I actually ended up bottling up my worries about business and money until I ended up having a little cry this weekend to my other half. It was only until then that I felt like my mind had cleared and I was able to rationally look at my situation and how to go about rectifying it. Don’t be afraid to mourn the loss of a client if you’ve worked with them for a while! But don’t mourn for long. This is your chance to take on new responsibilites.

    Once you’re done mourning, have a look at your business. Is what you’re currently doing working towards your long term goals? Does the extra time you now have give you the opportunity to try out things you haven’t been able to before? Now might be your best chance to put those goals into practice!

    An extra benefit is that you’ll be able to start with a fresh sheet with new clients – so potentially you can increase your prices to line up with industry standards, input a new contract or code of conduct and change up how you do things.

    2) Reach out to your contacts

    Windows Contacts

    The next thing to do is to reach out to your contacts. When I knew I was about to lose some clients, I reached out to my friends in the industry to find out if they knew of any potential clients or projects I could work on. I’m very fortunate that several got in touch, plus I’ve discussed a few projects with a few friends that will hopefully come to fruition. Those contacts are vital, and better than any advertising option.

    3) Get pitching

    Once you’ve spoken to your contacts, write up a list of clients you’d like to work with. Then pitch to them! Don’t wait for work to come to you, make it happen.

    4) Don’t panic

    Admittedly, this is the advice my other half gave to me. But if you reach out to your contacts, pitch to potential clients, reassess your options and look at all your income options, your work should pay off eventually. It’s now a few weeks down the line and I’ve had contacts from my website and referrals that will hopefully lead to some work next month. I might not be able to relax yet, but it’s good to know the work I’ve done so far is starting to lead to potential work.

    Paperwork

    5) Use your spare time wisely

    Get ahead on your admin. Get out and about in your local area (you never know, it might lead to some business opportunities.) Clear out and tidy your office and home. Take a day or two away to refresh your brain. Hell, enjoy the odd lie in! But make sure you work hard to find new work too. It’s tough out there at the moment, especially in editorial digital media and blogging, but if you can’t find any roles the internet gives you the opportunity to create your own work. Look out for a niche market or something that’s not already out there (or if it is, it’s not done well) and do it!

    Over to you! How do you cope with a freelance famine? 

  • Freelance Finance: Living with a feast or famine income (Guest Post)

    Feast or Famine

    This week, the lovely Leanne has written a guest post on the feast/famine cycle of freelancing – something that a few people have asked about recently. Read on for some useful advice on how to deal with the up and down financial situation of working for yourself.

    There’s nothing quite like being able to work for yourself. It’s liberating to know you’re your own boss and it offers a kind of freedom like nothing else can—yes, it may be hard work but you get to reap the rewards of success, but it isn’t without its issues. There’s one aspect of freelancing that doesn’t always get the attention it deserves yet can be tough to get accustomed to, and that’s the feast/famine cycle.

    Think freelancing means you’re going to be rolling in cash month in, month out? Sorry to burst your bubble, but it’s time to think again. Yes, your earnings can technically be limitless—you’re free to work as much as you want and can set whatever rates you see fit—but it isn’t always that easy. You have to actually get the work in for it to all come together, and unfortunately it doesn’t always go according to plan.

    It doesn’t matter how effective your marketing efforts are or how many steady clients you have, you can never tell what’s around the corner. You don’t have the luxury of having a fixed income each month which means you need to be prepared for the fact that some months will be better than others—in fact, some months you could have so much cash coming in you don’t know what to do with whilst others you’ll be scraping the pennies together.

    And don’t think it’s an issue that only the novice freelancer can face. Yes, it’s always going to take a while to build up a solid foundation but even the most experienced of freelancers can face the dreaded famine from time to time, and that means you need to take precautions. So just what can you do to keep things on an even keel? Well, here are a few tips to bear in mind:

    • Save for a rainy day. You need to get into the habit of saving straight away. It can be tempting to treat yourself when those first few invoices start coming in, and whilst you need to celebrate you also need to start putting a bit of cash away, just in case. You never know when times could get tough, after all…
    • Don’t be cocky with money. When times are good it’s easy to start getting a bit reckless. You might shop in slightly more expensive places, go to pricier restaurants or simply treat yourself more often, and whilst you deserve a bit of luxury you need to stay sensible. Yes, you want to bask in your success, but that invoice you just got paid? It could be the last one you get for a while, so don’t get cocky.
    • Don’t get complacent. You’ve got a steady income, a solid base of clients and plenty of projects to keep you going, so you hold off on the marketing and let yourself relax for a bit. But what about when those projects reach their conclusion? What if clients decide they don’t need your services anymore? It can be a huge jolt back to reality and can put a serious dent in your income, so always keep up with your marketing efforts and keep a lookout for new income streams.
    • Remember the tax man! Ok, the tax man may not be high on your Christmas card list, but that doesn’t mean you can forget about him. He’s reviled for a reason—don’t pay your tax and you’ll suffer the consequences, and don’t leave it too late to start thinking about saving. You may not be getting money automatically taken out of your paycheque but you should treat it in the same way, so make sure to save a bit back each month (ideally in a separate savings account so you can keep track of things) because there’s nothing worse than knowing you’ve got to raise thousands of pounds out of nowhere.

    It’s all about being sensible. Going freelance can give you huge amounts of freedom but it needs more dedication, commitment and perhaps even common sense than any other way of working, so the rule to remember is this—enjoy the feast, but prepare for the famine!

    [custom_author=Leanne Richards]

  • How to set your prices as a freelancer

    how to set your prices

    This week, it’s all about the money. The benjamins. The moolah. The dough. Y’know, the stuff that helps us pay our bills (and pay for shoes).

    I got myself into a bit of a tizz recently, as I was doing a lot of work, but the payoff didn’t really equal it. After a chat with the wise and wonderful JJ from This Little Lady Went To London, I had a look at what I was charging for my work. While my daily rate is about right, my packages were quite a bit cheaper than the competition. So, I’ve raised them! It’s a bit of a scary thing to do, but hopefully my current prices now reflect the time and skill I put into my work.

    So! My challenge this week for you is to do the same. Are you charging the same prices you were when you first started? It’s very common for newbies to charge very little or nothing at all at the start before they gain some confidence. Or perhaps you’re concerned that charging higher rates will cut your customer base. That’s true, but wouldn’t you rather provide a high quality service at justifiable prices?

    Here are a few things to do to decide on your prices (and don’t be afraid to reassess your prices every six months!)

    • Have a watch of this Marie Forleo video for a guide on how to set your prices:

    • Next, check out the London Freelance Fees Guide, which covers lots of freelancing roles and the average price for them.
    • There’s also a great guide on Creative Pool that I’ve mentioned before that has some handy up-to-date prices.
    • There are also some methods for working out your prices in this Lifehacker piece.
    • Lucky Bitch (affil) has a great set of free tips on how to charge premium prices
    • Get researching. Have a look on the websites of those who offer similar services. Many, like mine, list their prices. How do they compare?
    • Finally, ask your friends and family – ideally those in the industry. I’m fortunate to be surrounded by people who will give me an honest opinion.
    That’s your challenge for this week. Have a go, then let me know how you get on…

  • The Three Minute Podcast: How to outsource to improve your freelance lifestyle

    This week’s Three Minute Podcast is all about outsourcing. It’s come from a couple of conversations I’ve had recently – one with my mum about how to make more time, and one with Sally Todd about how to expand your business when it’s just you in the driving seat. I’ve been looking at how to expand my business for a while, but I’ve been somewhat limited by how much time I’ve got – especially when you add chores, a new fitness regime and a social life into the mix.

    So, I’ve been looking at how I can outsource some elements of my life so I can focus on the bits I enjoy, and I’m passionate about (I’m not passionate about cleaning. Definitely not. Hence why this is the area I’m outsourcing). Financially it’s a good decision too, as those four hours I get back a month mean I can work more and therefore earn more. Time is money and all that. This is one area that Americans are much better at – there’s almost a pride thing in the UK, that you have to be a superwoman and do EVERYTHING.

    Got three minutes? Take a break, grab a Kitkat and enjoy this week’s three minute podcast.

    Then, let me know what part of your life you’d outsource in the comments!

    If you’re reading this in Google Reader, you can listen to the podcast here.

    P.s over on the Facebook page, we’ve had some interesting suggestions. Who wouldn’t want a personal chef and a chauffeur?

     

  • Self Employed? Five ways to prepare for your tax return/Self Assessment

    Preparing and completing your Self Assessment in your first year of self employment is a tricky thing to do, particularly if you’re naturally a little disorganised like me. The end of my first year in self employment came around surprisingly quickly, and I was left with a pile of receipts, a bank account that contained far too many trips to Nandos and New Look and a mad panic to get it all into some form of order. I’ve no doubt that this meant I missed quite a few receipts or tax-deductible activities thanks to my own lack of organisation.

    My second year has been a lot more organised, and it’s mainly because I learnt the following lessons…
    Five things to do when preparing for your tax return
    • Keep all your receipts, train tickets and email confirmations in a file/folder, and make a note on each item reminding you what it’s for. Basically, anything you purchase for business reasons. It’ll save you a lot of time when the end of the year comes and you’re desperately searching through your diary/email to find out what a receipt was for. Invest in a decent printer so you can print off any confirmations as soon as you get them. I’ve just purchased this Canon wifi printer to do this, and it’s a bargain at £34.95 (plus tax-deductible)!
    • Consider a business bank account. Or avoid putting trips to McDonalds or La Senza on your card. Neither looks particularly professional (as I discovered), and it makes it easier to work everything out if all your spending activities on one account are business-related. You could always get a credit card just for business purchases if you don’t want to open a new bank account.
    • Set up a great invoicing system, so you can hit the print button at the end of the year. I really like Freshbooks for easy invoicing, and you can enter your expenses there too.
    • If you can afford it, get an accountant. They’ll keep you in check throughout the year, give you guidance and you can hand over all your documents at the end of the year for them to file a tax return on your behalf.
    • Aim to put away 30% of your salary each month in savings. This should cover your tax bill, and any other small business expenses. Then if you’ve got anything left after paying your bill, you can spend it on a little self-congratulatory trip away (Or, in my case, shoes). Much better than freaking out about a chunky tax bill that you haven’t prepared for.

    You might also like to have a look at HMRC’s guide to self employed tax returns to find out how to sign up, fill in your form and what dates your form have to be in by. They’re a fairly friendly and helpful bunch, so you could always give them a call if you’ve got any further questions.

    Do you have any top tips for anyone doing their tax return/Self Assessment for the first time? Or have you made a tax mistake others can learn from? Share them in the comments!

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