Managing the Ups and Downs of Your Freelance Finance

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Categories: Accounting, Business

Managing the ups and downs of your freelance finance

Managing the ups and downs of your freelance finance can be challenging since most of us don’t receive regularly scheduled payments from our customers. Typically, we start a project with a deposit and do not get paid until the project is completed. This in itself is a challenge for some since projects can go on hold or linger which puts a lot of time between the deposit and payment for remaining balances. This creates a lull in our payment cycle and can cause us to come up short some months depending on how many hours you have out in a project. There are a few things that we can do systematically that can help reduce these highs and lows to level off our payment cycles. Some are easier than others and do take practice to develop good practices.

Project deposits

Project deposits help kickstart our money flow and help get projects off on the right foot. Starting a project off with a 30-50% deposit can quickly put us back on track when we’re experiencing an unusually slow month. The bigger our projects are the bigger our deposits are. I outline the payment requirements in my proposals using Bidsketch, then invoice as soon as I have sign off with Blinksale. For me, a 50% deposit has proven to work well for both myself and my customers. This creates an income boost for me and allows my customers to become invested in the projects. Once the project is complete I’ll bill the remaining balance.

Getting paid

At times customers will take their time submitting payment which can cause money flow problems as well. I typically give my clients 15-30 days to pay invoices depending on whether it’s an initial down payment or a final down payment. If the customer is in a hurry, I’ll ask for payment due upon receipt to speed projects up. When a customer is late on a payment I follow up immediately. I don’t wait a few days with hopes that they pay. I follow up the day after their late to show them that I’m paying attention. Giving them those extra days after the invoice is due says that you may not be paying attention or may not be following your own policies. Following up on invoices promptly reduces the amount of days you’re going to wait to get paid.

Retainer agreements

All of us remember the days when we had regular full time jobs and our checks came every pay cycle no matter what. Retainer agreements are about as close as we can come to this as a freelancer. Retainer agreements are harder to find but are an excellent way to balance our monthly cash flow. They’re typically for a set amount of hours and pay each month, which provides us with a set amount we can depend on. If you don’t currently have a retainer agreement, look at your current customer list to see if any of them are good candidates. Typically a good candidate would be a customer your working a good amount of hours for each month rather than one-off projects. This offers a more predictable amount your customers can budget for and helps smooth out your monthly income.

Forecasting

Nothing is more valuable than planning your finances ahead of time. This requires knowing, down to the penny, your monthly expenses so you know where you stand. If you’ve had an usually busy month, you may find yourself in good shape financially for months to come due to having the extra hours to bill. On the other hand, you may come up short with an unusually slow month which means you should probably start following up with past clients to drum up opportunities for work or you may want to shift your efforts over to marketing to get the work coming in a again. Looking ahead 2-3 months at a time will tell you where you need to spend your efforts. A good tip for marketing though, don’t wait until the last minute. Have a regular marketing plan in place that allows you to stay in touch with past clients and prospects.

Saving

Of all of my tips, I’d say this is probably the most challenging for some. A good method is to have a set amount of savings you’re comfortable with and shoot for that goal. Is it $5,000, $10,000, or maybe more? Whatever the amount, work toward banking that amount over time. Having saved this amount will give you peace of mind that you can cover a gap of slow time, which WILL come eventually if you’re a serious freelancer. You may hover above or below you goal, but try to bank it and leave it. Create a separate account if it helps you separate it from accounts you spend from.

Managing cash flow is always a big topic for freelancers. It’s a challenge for all of us, but an issue worth conquering for the opportunity to be a freelancer. This is how any business runs and we shouldn’t treat our freelance businesses any differently. Money comes in and goes out and some months are leaner than others. This is the nature of our work and we must embrace the change to be successfully long term.

This topic was taken for our free 101 Simple Freelancing Tips download. If you haven’t already downloaded it, get our copy today.

Benefits of getting out of your home office

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Categories: Freelancing

Getting out of your home office

I’ve worked from a home office for several years and I’m usually able to focus and be productive during my day. At times though, I get cabin fever and need to get out or grab a cup of coffee at the coffee shop. It’s refreshing to meet new people, see different perspectives and opinions from others.

Working from home can be productive, but can also be quiet at times. As a freelancer you don’t typically have someone in the cubicle next door to talk about ideas. I reach a point where I need outside influence to talk about a project, hardware upgrades, or design trends. That’s when I get out to meet with a friend or to work on a project. Even though I’m used to a quiet office, I’m able to concentrate just as well in a noisy coffee shop. It’s energizing to be in a room full of freelancers or small business owners with similar goals. I always find myself talking about projects or handing out a business card to someone new. I always tend to have a different experience and usually meet someone new.

Sitting at the same desk, with the same surroundings ever day can get monotonous. Most of us are not meant to sit for 8 hours a day staring at a computer, doing the same things over and over. We’re meant to have variety in our lives to keep us motivated and energized about our work. We need outside influence to give constructive criticism or passing ours along to others. It broadens our perspective on how others perceive our work and helps us improve.

Meeting new people is always refreshing. I like to listen to others and how they approach their businesses. I listen to how others approach problems, solutions and how they’ve become successful or failed. There are lessons to be learned from success and failure. No matter what your business, it’s likely that you’ll have things in common with other small businesses owners.

Having a home office can be great, but let’s not forget to get out and network with others. Set up a meeting with a friend or local business owner to talk about what they do. Learn how they go about their business, how long they’ve owned their business, and what their plans on for the next 5 years. You’ll be surprised how willing people are to share their business experiences with you. We learn from others by listening to their experiences. So get out of that home office and get refreshed.

This topic was taken for our free 101 Simple Freelancing Tips download.  If you haven’t already downloaded it, get our copy today.

5 Ways to Stay Creative When You’re Busy

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Categories: Freelancing

5 Ways to Stay Creative When You're Busy

As a freelancer, I sometimes find it hard to be creative when I have several projects going at once and multiple deadlines to attend to. Even the best planning and forecasting can sometimes fall to the side when issues come up or more urgent requests come up. When this happens, it’s easy to work long hours with little sleep to try to accomplish everything that needs to be done. What’s happening is that we’re tricking ourselves into thinking we’re being more productive when in fact we’re getting outside our regular routine which causes us to be less productive in the days ahead. We need a certain amount of sleep, food and breaks to stay creative and productive. When we don’t receive these things, we start to lose focus and struggle to stay on task. Think of our days activities as a rhythm we repeat day after day. When we get outside of that rhythm, that’s when things start to fall apart. That said, here are a few things I focus on when I’m busy to stay focused and creative.

Take regular breaks

I find that I typically work well in 90 minute sprints. After the 90 minutes, I feel myself starting to lose focus. At this point, I’ll read a book for 10-15 minutes or take a short walk to get the blood flowing. I try to take this break away from my computer screen or phone since I get plenty of that during the day. After that 10-15 minute break I get back to it for another 90 minutes. This creates a rhythm throughout the day to keep yourself energized and creative.

Get plenty sleep

I try to go to bed around the same time every day. For me, I’m in bed about 10:30 at night and get up around 7:00. This is going to be different for everyone depending on how much sleep you require, family schedules, etc. The important thing is to keep regular times so your body knows when to start winding down and when it’s time to rise and shine. Without this regular routine, it’s possible you’ll feel groggy with a later bedtime or restless with an early bedtime. All resulting in less productive time during the day.

Exercise regularly

I try to exercise everyday. Some days it’s 30-40 minutes, others only 15-20. To me the daily frequency is more important than the length of a particular day to stay with the habit. It’s the days when I’ve had two or three days between workouts that are the hardest to exercise. Exercise gets the blood flowing which is great for creativity and maintaining focus. It’s not unusual for me to have ideas or solutions come up while I’m exercising. For that reason, I’ll keep my phone or a notepad nearby to jot down notes.

Don’t skip meals

Food is fuel for creativity. Trying to sketch ideas for a new logo, or planning a new website are nearly impossible for me on an empty stomach. This is one of the easiest things to overlook when you’re busy working toward a deadline or trying to launch a website. You work, work, work until you’re exhausted and hungry which reduces you’re energy levels to a point where you’re running on fumes. It sometimes takes hours to recover and at that point the day may be close to being over. Eating regular sized meals at regular times of the day keep you fueled throughout the day without running out of gas.

Stay with your routine

Like I mentioned, even though you’re busy it’s important to stay with your regular routine. If you’re a successful freelancer, chances are the work is going to be there regardless of if you’re working until 1am or 2am every day or if you’re taking care of yourself by getting proper sleep, eating correctly and exercising. Burning the midnight oil night after night may feel like you’re getting more done, but you’ll eventually find yourself experiencing burn out caused by lack of sleep which will show in your work. Take care of yourself and you’ll find yourself more creative over the long haul and you’ll do better work as a result.

 

Three great apps for freelance designers

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Categories: Business, Freelancing

Three Great Apps For Freelancers

As a freelancer I’m always looking for web apps, or native iOS apps that make my project tasks easier. I’m not always sitting at my desktop computer, so any app that stores it’s data in the cloud and is mobile friendly is going to be at the top of the list for me. Creating wireframes and flowcharts are a key part of my web design process. I have two apps, Moqups and Slickplan that make these two steps easy and fun to work on. I also use Prevue for a very quick and simple way of sharing and recieving feedback on design mockups. Here’s a quick summary of the three apps.

Moqups

Moqups is a web based application for creating wireframes for websites or web applications. It allows you to create the pages you need for your website or application and lets you link your pages together to create a semi-functional prototype. The toolbar has all the web page elements you need to create your pages. You simply drag over the element where you would like it to be and drop it on the page. Once your element is on the page you can customize it to fit your needs. Most elements give you the option to customize the color and border treatment to fit your look along with more options depending on the element you’re editing. It’s easy to create wireframes for mobile or desktop purposes since it offers web elements for both platforms. I’ve tried a lot of different applications for wireframing and feel this one has everything I need, looks great and has a great workflow.

website: www.moqups.com
price: $9 / month

Slickplan

Slickplan is a web based app for creating flowcharts for websites or applications. The interface is clean, simple and allows you to quickly create flowcharts with multiple levels for pages. You have the option to select a predefined color scheme or you’re welcome to create your own. I’m picky about color schemes for flowcharts so this was an item that caught my eye right away. It also allows you to designate a page type for each page such as a form, listing, gallery etc. to better define your pages. If your page type isn’t there, you can create a custom page type for your purposes. One of my biggest concerns with any app I use is workflow. I feel like Slickplan nailed it by providing multiple ways to share a link to your flowchart by giving options to email it, post it to Basecamp or even share it on Facebook, Twitter or LinkedIn. You can easily export it as a PDF, EPS, PNG, or a web page depending of what’s best for you.

website: www.slickplan.com
price: $3.99 / month

Prevue

Prevue is a web app that lets you upload, manage and share your designs through a super clean and simple interface. Prevue has taken the simple and clean user interface to the max by having a simple left hand sidebar with all of your projects in the center of the page. You can create groups for your projects that can be shared or protected depending on your needs. The commenting feature allows your viewers to leave feedback on your designs within the app so everything is organized. A stats tab allows you to see what template was viewed and how many times it was viewed to be sure your designs are being viewed. Sharing options include a dedicated URL to each project and a Twitter sharing link. You can also add annotations if you need to call out particular elements if your projects.

website: www.prevue.it
price: $25 / year