Becoming a freelancer is an exciting and scary prospect. There are lots of dangers involved and plenty of benefits to take advantage of, but before you take the plunge and make your first steps into the world of working as a self-employed person there are a few things you should know that can help you maximise your time and profits. Paying your bills on time is a problem we all face, but cashflow is the single source of frustration for most freelancers and start-up business owners, especially in the early days.
With a few simple steps you should be able to manage cashflow, pay your bills on time, and of course, pay yourself too! It can be very easy to miss one payment and suddenly find that you are behind with a number of payments. Debt is difficult to get out of once you are in a cycle of it. Here are a few tips to keep you on the front foot as a freelancer.
Save Money When You Can – When work is going well and you are bringing in a number of contracts and paydays it can be easy to think you’ve made it. At these times the worst thing you can do is to go all out and splash the cash. At some point in your freelancing career there will be bad times, where you are bringing in little or no work for periods at a time. When the going is good, you should do all you can to put money aside to cover the potential bad times.
Pay Your Bills on Time – Whenever you receive a regular payment make sure that you pay your bills first before anything else goes out. If you can guarantee that you’ll have enough cashflow for certain dates, set up direct debits to cover some bills. In terms of tax, always put aside enough money to cover your tax and national insurance payments, that way, when it comes time to fill out your self assessment and pay the tax man, you are never left short!
Be Thorough with your Records – Make it a habit that you keep a dedicated and accurate spreadsheet with all the information relating to your freelance work. This should include all financial outgoings and incomings, all client details, invoices that have been sent out and payments received, including dates and all other pertinent information. You should also back-up this spreadsheet on a regular basis.
Have Set Work Times – Being a freelancer does provide you with the flexibility to not have to get out of bed at stupid o’clock in the morning to commute to work. It also means you can have days off when others are in work, without asking for leave from your boss (because you are the boss). Remember though, habits are hard to break, so in order to stay productive give yourself set work times that make the most out of freelancing, for instance 10am-6pm. That way you’ll have the work covered without having the pressures of the daily commute.
Our Free Download section offers free templates including:
– Business Plan Template
– Cashflow Forecast
– Personal Survival Budget
– Profit & Loss Forecast
– Sourcing Finance
– Start-Up Costs