It’s one thing to work as a freelance designer, web developer, illustrator, journalist, copywriter—pick the description that suits you best—to cover expenses and pay your bills. Playing at the level where you’re meeting your commitments is something to be proud of.
But still, that just-enough lifestyle brings with it a lot of uncertainty. What if your big project doesn’t continue? What if funding runs out when your champion leaves the company? What if all of the jobs that look like they will come through don’t? These are the kinds of questions and anxieties that plague freelancers of all varieties.
Covering expenses is important, but it’s by no means a key to a successful freelance lifestyle. To build something with staying power, you have to think about where you want to be in a few years, not simply about how you’ll meet your commitments this month. Let me give you a guarantee: if you’re only looking at freelancing as a month-by-month battle, that’s where you will continue to be until you begin thinking of it as a lifestyle.
Here are some ways to help you build a successful freelance career.
Consider taxes as you go
One of the worst mistakes anyone who is self employed can make is to ignore the issue of taxes until the end of the year, or fiscal year, depending on how you file your taxes. Coming up with what is a very significant portion of income in many countries isn’t easy. That’s why you need to put away tax money each and every month, in proportion to the money you earn. I pay my taxes quarterly, and set aside the money each month. However you pay your taxes, put the money aside and don’t touch it. Unfortunately, it’s not your money!
The end of the year causes many of us to consider our taxes and how we would help ourselves if we were more organized. If you’re not organized, you’re probably losing out on tax benefits by not tracking expenses. If you work from home, get smart on whether or not to claim a portion of your utility expenses and related costs. That can benefit you significantly.
Also track all of your expenses, including work related transportation, postage, copies, office supplies, meals, etc. When I added all of these up this week I was very happy that I kept my receipts. I spent considerably more this year than I thought I did.
Save for rough spots
If you’re looking at your freelance business as an as-you-go venture, you’ll make the mistake of spending your money pretty quickly after you make it. This is a recipe for disaster.
As everyone who has signed their own paycheck knows, you will have bad months, dismal months, months you hope to never live gain. But you will re-live them and some will come at you back to back to back. Even if you have a healthy number of invoices outstanding, you’ll have those clients who simply will not pay on time.
That’s why you need to have money put away so you can withstand those rough spots. Experts tell us we should have six month’s worth of living expenses in our savings account. This is a good rule of thumb, especially for freelancers.
And of course, it goes without saying that you have to be saving for retirement. Without an employer to help with your 401k, you’ll need to take the initiative and be sure you’re making money for now and for the future.
Embrace a routine
One of the best reasons to go it alone is to set the kind of flexible schedule that suits you best. But a routine is also very helpful for most of us. It will probably help you to feel grounded and moving in a positive direction. It will give you command over your days so you don’t look back at your week and say, “I don’t feel like I actually got anything done!”
How can you get on track with a routine that maximizes your productivity and your successful freelance lifestyle?
Honor your boundaries
This is a common theme for me at this phase of my life. As a freelancer we will find people who expect us to be at the ready no matter what. Just because we’re not tethered to an office or a corporate board doesn’t mean we’re available at every client’s and prospect’s whim.
You can’t build a stable freelance business if you drop everything to meet every demand. If clients think you are available at every hour of the day and that you’ll turn around projects at record time, they will always expect you to work that way. It makes it very difficult to grow.
Set income goals
If you aren’t growing your freelance business, you’re going to be in trouble. You must set annual goals for revenue. What do you need to earn in order to not only cover expenses, but meet unexpected expenses, increase your standard of living and save for retirement?
January is a great time to look forward to the next year with high, yet attainable expectations.
Grow influential partnerships
One of the best ways for freelancers to improve their lifestyle is to develop and nurture important partnerships. Who are the agencies and people in similar industries in town (or around the globe via your social network) that you could collaborate with? Maybe you have a specialized skill that a partner doesn’t have, and that you could provide through a win-win relationship. As a marketing strategist and copywriter, I have a few of these relationships. They’ve proven to be very useful in the short- and long-term, and opportunities increase as we continue to work together.
The right partnership can be a boon to a freelancer.
Keep your connections
A bit over a year ago, a colleague who I had worked with on committees at my church approached me for a short-time consulting arrangement that helped me cap my year an a very proper footing. Make sure your colleagues and friends know what you do so you are positioned to one day reap the rewards! Anyone who’s been in business any length of time will tell you, business will come from unexpected sources!
The right relationships and a healthy dose of trust can really help boost a freelancer’s bottom line.
Develop your business
This can’t be overstated. You must always be working to develop your business. Whether it’s social media, physical networking, connecting with partners, blogging or any number of other marketing opportunities, if you plan to have a successful freelance business and reap the rewards of this lifestyle, you must always and actively be working to grow your business. Spend all your time delivering for clients at the expense of gaining new ones, and one day that well will run dry and you’ll be left very thirsty.