In today's freelance tip, we're going to talk about money, particularly, your financial cash-flow. One of the major differences between working a 9-5 job and working as a freelancer is the unpredictability of income. Unlike your regular job, you get a specific or a more regular amount of income every 15 days or so. With freelancing, you're the captain and you're in charge how much you'd like to receive. The possibility of earning beyond your minimum wage is so high, you'll probably even earn 10 folds if you have the skills and the will to really work hard.
For six years working as a freelancer, I've gone through the different financial cycles of freelancing. There were times when the business picks up and clients are just coming in from everywhere. But just like the waves of the sea, there is the ebb and flow that you need to be constantly aware and be prepared to tackle once it gets on your way.
In today's tip, I'm sharing with you some things to remember so you can ride the tide and maintain a healthy cash flow for your business.
1. Sell Your Services Directly
If you find all your freelance work from bidding sites like Upwork or Freelancer.com it's time for you to make sure you have a website where you sell directly to clients. With this setup, you can ask for an upfront fee and receive payment right away. There's no need for you wait for another 3-5 or even weeks days before you actually get your pay. You also reduce the possibility of not getting paid for the work you do.
2. Diversify your income source
Freelancing is not the be all and all in terms of making money online. You'll be amazed at the many different ways to earn. Owen Burek of Save the Student listed 40 Easy Ways to Make Money that you can explore and possibly find one or two that you can do on your spare time. While my main service is providing podcast management, I actually have other gigs working on websites, managing video editing assignments, and not to mention Adsense income from my YouTube Channel, The Freelance Channel.
3. Invoice on time
If you don't invoice, you don't get paid. So make sure to setup your invoice and setup a reminder when to send it and when to follow up. Right now I'm making use of Zoho Invoice and it's working perfectly for me. I really look for invoicing software that has an app for Android and iPad and Zoho offers those two apps which is very convenient to use specially if you are on the road or away from your desk.
Aside from sending your invoice (early) make sure to have an automated system that will remind your client if the payment has been delayed. My current practice which has been working quite well is to email my client and let them know that I've issued an invoice.
4. Save, Save, Save
If for some strange reason your clients just stopped sending you their business, how long would it take before you end up borrowing or taking a loan from a friend or the bank? For those who don't save, it's probably not very long. So before you come to that point, be sure you start adding this in your to-do list every time you receive your income. It took me a while to get into the habit, but if you know how hard it is to be without savings, you'll probably take second thoughts of splurging your hard earned money for things that don't really matter or not necessary. Saving for the rainy day is one of the most basic thing to do but it's one thing we almost always neglect. Defer your plans of buying new gadgets and put it in your savings first. Otherwise, you might end up selling those gadgets for a bargain when you no longer have money.
5. Invest – Make your money work for you
While this topic of investing can take a blog post of its own, I'll just say a quick note that as a freelancer, once you've taken cared of the saving part, the next thing you can do is to start learning how to invest your money and make it work for you. In my next blog posts, I'm going to share with you how I'm using my earnings to invest in the stock market and mutual fund.