Let’s be honest here (our Freelancer News circle is a safe space), without making any profits, most of us would be rethinking our careers, and that’s ok. If you’ve ever thought about giving up and going back to paid employment, we feel you. It’s something that crosses almost every freelancer’s mind at least once.
Not to mention business owners and self-employed individuals are being hit harder than ever with the cost-of-living crisis, and prices becoming more expensive by what feels like the millisecond.
We know this doesn’t make you any less passionate about your freelancing work, but the vast majority of us need to (at least) pay our bills. It’s even better if our passions do more than simply cover our business overheads. But what can you do to make sure you’re profitable?
The very nature of being a self-employed freelancer means that your income is likely to fluctuate no matter what. To help you stay ahead, we share our tips for maximising your freelancing profits. You can do it, we’re rooting for you!
What are your key expenses?
Some expenses are absolutely key to your ability to freelance. Depending on what sort of services you provide, this might include anything from rent payments, your phone bill, or printing costs.
When we’re surrounded by them every day, it’s easy to overlook some of the costs that might be putting strain on our financial budget. Reviewing and managing our costs can make a massive difference to how much profit we make.
Do you rent out office space?
You may rent out office or workshop space, but do you really need to? With rent prices skyrocketing, especially in city centre locations, it might be time to review how essential that extra expense really is.
Lots of freelancers work from home as a cost-saving measure (and for the sheer convenience!), and might sometimes rent hot desks or meeting spaces to see clients, or even just arrange to meet up in a coffee shop. Remember, you can claim expenses if you work from home too, so all the more reason to set up your own home office!
Technology is also ever-evolving, with online video calls and screen sharing now accepted as the norm. If your premises are more habit than helpful, it might be time to get shut of the space and keep more of your income.
What are your suppliers like?
It’s not unusual to find a supplier and stick with them until the end of time (we’re creatures of habit so a lot of us tend to stick to what we know). But it’s always best practice to check what/who else is out there, so you’re always aware of the best solutions available.
This helps you stay efficient, and can even help you keep on top of your competitors. When thinking about your supplier, keep notes such as:
- What sort of payment terms do your suppliers offer? Are they beneficial for your cash flow? For instance, if you order printing work for a client, does your supplier give you enough time to recharge the customer before paying the printing bill, or does the cost come out of your pocket first?
- You’re likely to have looked around first before choosing your supplier, but have you checked since? Things may have changed since you first had a look, so find time in your diary to review different suppliers. You never know who you might come across!
- If you feel like their fees are a little high for what they offer, consider trying to negotiate with them while also checking out other suppliers in your area. If you go to networking events or have contacts with other freelancers or small businesses, ask if there’s anyone they’d personally recommend. You’ll find people in your industry will have heaps of knowledge to help and guide you through this sort of stuff.
Never feel like you’re stuck with one supplier, there are plenty of friendly professionals out there offering great prices!
And lastly, remember it’s business and nothing personal, so don’t feel tied down to a particular person for fear of hurting their feelings, especially if it could be damaging your profitability.
How efficient is your business?
As a freelancer you need to ensure you’re making your work life as streamlined as possible. After all, you’re running the whole show!
- Try to track how you spend your time, and where you use up resources. For instance, are there any processes you can change to make them easier or avoid duplicating work? If you’re active on social media a lot, could you plan and schedule more of your posts? Having them scheduled a couple of weeks in advance can make a huge difference to your workload, rather than coming up with content and posting it ad hoc.
- Can you schedule follow-up emails for your clients? You can set up personalised emails a couple of days (or hours if you prefer) after client meetings to check in and thank them for their time, and add any bits of info that you normally would. Personalising these emails is usually pretty easy, and you can set up trigger points to stop anything being sent if they email you first (so it doesn’t look like you’ve automated anything!).
- If you spend a lot of time manually entering bank transactions into your bookkeeping or invoicing clients, it might be worth researching what software options are available to do more of the heavy lifting for you.
- If you create or sell products, is there a way to use up leftover or surplus materials? Do you spend time answering the same questions with each new client? Maybe you could prepare an onboarding guide, or even just write up an email template to deal with them more efficiently.
These are just a few suggestions, but it completely depends on what it is you do. It’s well worth getting a pen and paper to record your day, and see if there’s anything you can do to relieve those pain points!
Are you under-pricing your goods or services?
When starting a business, most of us are worried about putting clients off. So, instead of charging what we’re worth, we massively undersell ourselves and usually end up out-of-pocket rather than making a profit!
Whether you sell your services or products (or both) you need to think of the following:
Always do your research on what other people in the industry are charging – especially your nearest competitors. This will help you decide whether it’s time to put your prices up. We know this can feel difficult, but with time you’ll become more comfortable deciding how much you should charge your clients. Always remember your own worth!
We’re not being dramatic when we say bookkeeping is absolutely essential for every business – freelancers included!
It’s super important for many reasons, from helping you stay organised, to identifying any issues putting strain on your finances – such as repeated late payments from clients.
Keeping on top of everything and get paid quickly
Keep on top of the jobs you’ve completed, the hours you’ve worked and the invoices which have or haven’t been paid. Having everything so visible will help you keep track of what you need to pay, and who still needs to pay you.
You can even use this information to send payment reminders to all your clients, helping you to get paid faster, and review the ones who regularly miss their payment date. This way you can decide whether you want to continue working with these clients, or whether it disrupts your cashflow too much and therefore isn’t worth the stress.
If you have a good bookkeeping system, you can check your income, outgoings, clients who pay the fastest, and services or products that are the most popular. This way you can keep on top of who your best clients are, what services or products they’re loving, and what areas may need a revamp or some marketing.
Have your tax and expenses under control
Did you know you could claim tax relief on some of your expenses as a freelancer? For instance, this might include your travel costs to see a client, or a mobile phone you use for work. The list goes on, but by being aware of what you’re entitled to, and logging it all in your bookkeeping, you won’t be left second guessing what expenses to claim back in your tax return.
Speaking of which, good bookkeeping will also help you keep on top of your earnings, so you can begin to put money aside ready for your Self Assessment tax bill!
Keeping on top of the books will help you spot opportunities or issues in your business. The best part is that some providers offer free bookkeeping software, so that won’t be another thing you’ll have to pay for.
Do you need to look at how you’re promoting your business?
In an ideal world, we’d create a website with our services displayed, and customers would come flooding in, leaving us busy until retirement. Unfortunately, though, that just isn’t the case.
While marketing may be a little scary, it’s vital for getting your name out there. Don’t let the name put you off! Marketing can be anything from handing business cards out to your mates in the pub, to advertising your services in a LinkedIn post.
Before you go to the time and cost of setting up a website, do you actually need one? In some cases, you might just need to set up a sharing link to your portfolio. If you do need to use a website to promote your services, but you’re not too sure where to start, you could take an online course or even hire help from another freelancer.
Without help or training, we don’t want to know where we’d rank in Google. And let’s be honest, we could all hide our deepest and darkest secrets on page 3, and no one would know.
What else can I do to promote my freelance services?
- Have happy customers? We love to hear it! It’s a great feeling, and you should be super proud. If a customer is reaching out to you because they loved your service, ask them to leave you a review! It’s free promotion you should never miss out on if the opportunity arises.
- Look at your marketing strategy. As a freelancer, you need to find what works for you. You could advertise yourself on social media, meet people at networking events, or even reach out to your existing or previous clients. Word of mouth recommendations are a powerful form of marketing! Test what works for you and don’t be afraid to try new things.
- Follow up on any dead ends. It happens to us all. You give someone a quote, they say they’ll get back to you, and then it’s dead silence. Have a follow up email template ready for any quotes, letting your clients know you’re there if they need you. You’re not being rude, sometimes people just need a little chase.
- Remember to be patient: Great things take time, so patience will be required when seeing out a new marketing strategy or building up your customer reviews. It’ll all be worth it in the end.
The main thing to remember is not to be so hard on yourself. It can be extremely difficult being a freelancer, but once you learn how to take action and when, the more your hard work will pay off.
Get more advice and news over on our Freelancer Hub!