Freelancing: Cash Flow is King
I thought I’d talk a little bit about the ins and outs of making freelancing easier and less stressful by structuring your invoices and finances in a way to make your life better. Cash flow as a freelancer is usually a big problem, because everything about your businesses risk, lead generation, sales, etc, comes from you. Usually you don’t have an agent or a sales and marketing team to get you what you need in terms of jobs. So bad, uneven cash flow can be a real nightmare if you need to pay rent in a few days and have zero money to do so, and three of your invoices are due a week out from when you need them.
That’s why adequate cash flow, and tracking your invoices is so critical to relieving some of that stress. Personally I make goals for when I will invoice a client, and I typically look at my invoice schedule at least once a day to spread out invoices in a way that makes my life easier. I also write on my invoices that payment is due within 30 days of being sent. This helps me both keep track of when I’m supposed to have the cash on hand, what invoices are outstanding, and when I can expect pay off my credit card bills, rent, utilities, etc and hopefully be able to save a decent amount as well.
Another step to making cash flow less of a horrible stressor is to try and build up some savings as soon as you can while freelancing. If you have extra money and no dire need to splurge in on something like a new piece of equipment, or a luxury item like a movie, or something else, saving your money is the best thing you can do. A hefty rainy day fund will help relieve you on the ups and downs of freelancing. If you have a month where you don’t do well at all, or a string of months where you’re struggling, it’s best to prepare for them ahead of time.
Figuring out other revenue streams is also a good way to subsidize your income and relieve some of that stress. Selling things on your site through something like WooCommerce plugins, creating webinars about subjects you’re an expert in and selling them, creating workshops, etc can all be good ways to bring in some extra income.
Hiring an agent eventually might be a good idea as well, but I only really recommend that after doing your research and having enough money to covers your expenses for the most part already. It saves you more money overall to search for and find leads yourself. The right commissioned agent can be great, but remember that a bad commissioned agent will just eat into your bank account if they generate a lead, do nothing about it, and take a cut without doing any of the leg work for you. I’ve heard about that happening to a number of nice people, so just be very careful who you partner with.
Good luck on there freelancers! See you next week!