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!