Keeping your freelance finances in ship shape
Ask any freelancer what their biggest concern was before they took the plunge into the choppy waters of self employment and they’ll say the money. Nothing gets your heart pounding and the cold sweat dripping quite like realising that you’re solely responsible for bringing in the bread. Nobody ever said leaving a guaranteed salary behind was easy but what they do say is that it is worth every single toss and turn in sleepless nights to be the captain of your own ship. All it takes is a little care and attention to keep your finances in ship shape in those first few tumultuous months. Here’s how…
KEEP THAT FEAST OR FAMINE MENTATLITY
While we’re not likening it to the birth of your first born or tying the knot with your dearly beloved, getting your first hefty invoice paid as a freelancer is right up there with the greatest days of your life. The bank balance is revitalised – you probably deserve a bit of treat, right? After all, you’ve worked hard. Before you know it you’re a shopping spree down and a new TV or holiday up. While cash coming in sporadically can be hard to get your head around, finding the balance between staying frugal and splashing out is key to keeping your head above water in your first year or so.
RETAINERS FOR THE WIN
Retainers are the Holy Grail for the self employed. Get enough of them under your belt and you’ll be laughing all the way to the bank, with work paid for often before it has even begun and the uncertainty of ad hoc projects left in your wake. Retainers benefit your clients too, giving them peace of mind that their projects are at the top of your to-do list each month and allowing them to factor working with you into their budget and forecasting. It’s a win win all round, so don’t be afraid to broach the subject of retainers when you start working with someone new.
BE UPFRONT ABOUT PAYMENT UPFRONT
Brits are good at a lot of things – making a brew, complaining about the weather, pleading the case for Henderson’s Relish on your Pukka Pie…the list is endless. But talking about money? Well that’s a whole different ball game. While it might not be in our DNA, getting comfortable with having those cash conversations is a non-negotiable if you’re going to do a good job of sailing your own ship. Setting solid payment terms and agreeing rates that fairly reflect the work you put in are the basics but asking for payment up front is the real game-changer for freelancers. If you’re taking on a big project, asking for part-payment in advance protects you from non-payment on completion, something which has the potential to cripple a fledgling freelance business before it has even get off the ground.
Having a freelance crisis of confidence? Our Helm mentors are waiting to help you do what you love and realise your passion…think of them as the first mates you need in the stormy seas of self employment. Get in touch today.