So you’ve finally decided to go the freelancer route. All things considered, the day-to-day management of a freelance project shouldn’t be too difficult and most of it is pretty obvious. As a freelancer, your job (ideally) should be pretty cut and dried. But there are a few things no one tells you you should do.
Here are just a few things we observed successful freelancers do:
6.) Get the most out of Existing Clients
The more cynical would call this whole exercise “milking it”. However, building new relationships with new clients and suppliers takes a lot of time – time that could be spent working on other things directly related to your business. Try to make yourself indispensable to their business. If you can manage it, make sure your clients need you – and know it.
5.) Invest in a Back-up System
If there’s any component that’s absolutely integral for your business, you should be able to replace it should something go wrong. It’s not just equipment either. As we discussed in a previous post, specific knowledge and valuable data shouldn’t be at the mercy of some freak event.
Speaking of data, those of us who’ve been using computers since the 90s are all too familiar with the Blue Screen of Death and catastrophic hard disc failures. These things happen a lot less often, but they’re not the only bad things that can happen to your data. Theft, employee mischief, natural disasters, and other unforeseen events can cause mayhem to your data- and your business.
The Boy Scouts know it pays to be prepared. And you should too. Fortunately, cloud computing and services like Google Drive make this a lot simpler.
4.) Ask For Help When Needed
First off, any freelancer will tell you it’s frustrating dealing with clients who don’t know what they want. Ask them! Having clear guidelines on what needs to done will make your life a whole lot easier.
Secondly, you aren’t superman. Even freaks of nature like Nikola Tesla and Michelangelo had assistants – why shouldn’t you? Ask friends and family to help you out when you need it. But always be careful about how much you’re asking from them – ask too much and your relationships can be put at risk.
Always be prepared to compensate third parties who help you fairly, and be careful about whom you owe favors to. The most expensive things are those you get for free.
3.) Have A Financial Safety Net Ready
One thing most new freelancers will not have a lot of is financial security. It’s advisable that you try to hang onto a day job for as long as you can. Or at least until you can save enough to get you the right amount of working capital to kick off your business.
How much should this be? It depends on how much you expect to earn from all of it, as well as your expenses, available lines of credit, inventories, accounts payable, and the length of your operating cycle.
You’ll need to figure out what your working captial ratio should be. To find this, divide your total current assets by your total current liabilities. From the resulting ratio, you should be able to figure out how liquid your business needs to be in order to meet its obligations.
Businesses with a long operating cycles ideally need a higher working capital ratios than ones with shorter cycles. Remember, even profitable businesses can grow bankrupt if they lack the liquidity to make payments on time.
So… yeah. Hang on to that day job.
2.) Spend Wisely
One of the brutal realities of freelancing is that there’s a huge chance you’ll come up against hard times at some point. No one who isn’t an app developer *really* needs a new iPhone or a new iPad. One area where freelancers can really save money is on transportation. You might want to consider selling a car that you don’t really need anymore in favor of something you might – like a pick-up or a delivery truck.
1.) Learn to Say NO
One thing many freelancers fail to appreciate is the value of time. This is especially true of many inexperienced entrepreneurs. Simply put, not everyone is worth dealing with or even listening to. For these people, a “no” is the only answer that would make sense.
Who should you refuse? You’ve got to develop your own criteria for this, as the value of some projects does not merely boil down to “profitability/time”. Branding and networking opportunities, as well as personal satisfaction should also figure into the mix.
Keeping people hanging on the line can lead to bad word of mouth. Think of it this way. If you’ve ever applied for a job which was worse – getting a refusal, or no reply at all?
While you can’t always respond to everyone on time, do your best to say “no” as soon as you could, if you’re not planning on dealing with them right away.
Freelancers have it tough, but for many the freedom is all worth it. What other tips can you share?