If you have recently gone from the office or another job to being freelance – it is easy to overspend. You might look at website packages, accounting software, automation things, and more. And, while you are getting to grips with how freelancing looks for you, it can be a challenge to stay on top of your cash flow.
Over time you’ll build your own flow of work in a way that makes sense to you. But what are the points that you can already start to implement to make sure that you save a little bit of money – and create a workflow that is beneficial?
Let’s take a look at how you can be more productive and save some cash.
Rates
Rates can be a tricky thing to talk about because, for many years, freelancers weren’t talking about what they were charging. Now it is much more transparent, and you can get a good idea of what you should be charging.
One of the biggest ways to improve your bottom line and start saving money for other areas of your business is by increasing your rates. For the first few months, when you are going to be cutting your teeth on being freelance, you will likely be charging less than you are worth. Once you have a bigger portfolio, though, you should take a look at increasing your rates.
Long-term clients might not be as willing to pay more, but it is worth increasing your rates.
Increasing your rates will also mean that you will be doing less work for higher pay and have more free time.
Clients
Short-commission clients will feed your bank account here and there – but it is long-term clients that are the most valuable to your business. Long-term clients are also one of the best ways to start creating a robust portfolio that can show progress and that you are able to maintain long working relationships.
Before the end of a short-term contract, reach out to the client and see if they would be willing to discuss their future business plans and see where you would be able to benefit them.
Automation
Automation is one of the fastest ways to improve the speed at which you work. There are a few big things that are very interesting right now, like ChatGPT or AI content and image creation, that can be very beneficial. It is important that you look at the areas that take you the most amount of time in your day – and how you can make it faster.
Depending on the type of business you run, there are plenty of options. When it comes to dealing with customers and queries, the faster you do it, the better; for that, use the best live chat software; it makes it smoother for your business and the user.
Create email funnels that help new newsletter sign-ups get the information they want, and be sure to create segments so that the right people get the right information.
The trick to automation is the groundwork and integration.
Here are a couple of places where you can take a look at implementing automation:
- Social media scheduling
- Email management
- Workflow management
- Finance tracking
- Prospecting clients
Where possible, ask for a free trial so that you can test the software and gauge how much you will benefit from it. There are two factors to help rank how much impact automation is having; one is that you have more time to work at other times, and it supports your everyday work, and the other is that you earn more money when the automation is in action.
Another place to look at automation to help you out is to make sure that you have an automated saving set up. Figure out roughly what you might need for taxes, and put that into an automatic amount that gets moved into a savings account.
Yearly Subscriptions
For budgeting reasons, you are most likely to get a monthly rolling yearly subscription – because it is cheaper. However, yearly payments usually have a significant discount. Start-ups don’t typically have the spare cash to make a single large payment – but sometimes things are worth saving for.
In the long term, making a larger upfront payment will mean that you save over the year. And those small savings can make a big difference.
Discounts
Before you buy devices, stationery, software, or furniture for your business – always make sure you have searched for any discounts you can get as a small business. There are plenty of places online where you can find discounts for these purchases.
Not only that, but you should shop around too. Once you have narrowed down what it is you want, start looking for the lower price. Always factor in how much postage and VAT will be. Often the great deal on the device could mean you don’t meet the requirements for free postage or any other ‘free’ items.
Expenses
Many freelancers don’t realize just how much they can claim in terms of expenses. It is vital that you look at an in-depth guide so that you can really make the most of it. You are also able to include part of your utility bills for your home.
The best way to make sure that you get the best from your expenses and what you can and cannot claim is by working with an accountant. Yes, the account will cost money – however, it is the only way you are guaranteed to claim all of your expenses.
Here are just some of the expenses you can claim:
- Credit Card Interest
- Studying, Education, and Training Programs
- Home Office Expenses Deductible Taxes
- Travel and Milage (for business)
If you can’t afford an accountant just yet, then take a look at some of the accountancy software so that you can learn to manage your expenses, income, and more.
Time Tracking
It is often the case that freelancers will spend more hours than they need to on their work. Taking breaks, procrastinating, and more. Your time is money; so much time you are spending has a direct (and important impact) on what you are truly earning. If you work on hourly contracts, you should be making sure that your client is getting things accurately billed.
Time tracking will ensure that you are undercharging (which is already something freelancers often do).
Get into the habit of setting a tracker every time you start work. Since freelancers don’t have any of the employee rights and so on, it is up to you to make sure that you are handling your time correctly.
Credit Smart
As a freelancer, you are eligible for many different types of credit – and there are many freelancers who would be happy to take as much as they can. But, the cost that comes with taking credit with your business can be what ultimately sinks your business.
Credit cards are one of the most harmful things to businesses if they aren’t used wisely.
It is often recommended to look at small business loans instead of credit cards, as they are often lower in interest and more accommodating.
Cashback
To reduce spending, you need to watch what you buy – but when there are things that you do need, look for cashback deals. There are some cashback websites that offer a good amount.
One thing to watch out for with cashback websites is that even when the cashback is factored in, they can still be more expensive than elsewhere on the internet.
Secondhand
While there is a little bit of joy in buying new devices and items for your business, there is a high turnover of electronics. Hundreds of businesses update their systems all the time – and that means there are plenty of user devices (that aren’t old) up for grabs.
Take a look in thrift stores, check the newspapers for businesses that have closed and are selling all their items, and look online too.
Essentials Only
It is very easy to be influenced by all of the freelancers and business owners online who share highly polished, interior-designed, and curated working spaces – and feel like that is what you need.
However, it is more beneficial when it comes to budgeting (and staying focused) to only have what you really need.
When you are still early on in your freelancing journey, it can go either way – but you are in a great position to really take stock of what will improve what you do and what won’t. Start reading blogs and articles by other people who do the same as you, and see what they use and do.
Your workflow and productivity will be greatly improved when you have the right setup – and that often comes from dealing with the cents and pennies first. Cutting the costs of your business while making smart decisions about the software, devices, and working area can get you off to the right start.
For those who are a little bit further on than the start-up stage, there are plenty of ways for you to save as you grow: How to Save Money as a Small Business Owner.
