4 Easy Tips Towards Strong Financial Management for Freelancers

financial management for freelancersA freelance business can be a very productive and lucrative but only if it’s managed really well. Otherwise, it can be a complete waste of time, effort and a whole lot of cash. Learn these simple financial management tips to help you succeed as a freelancer:

Plan everything.
Cost increases for every mistake that you make. And for each mistake you make, you throw away money that could have gone back to your business.

To avoid or at least minimize mistakes, start your freelance business with a good plan. Know how much you’ll be spending for equipment, facilities, promotions, ads and marketing, supplies, etc.

Watch your expenses.
As a freelancer, earnings will be irregular. Sometimes you’ll have to wait weeks (even months) before the next big check comes along.

To avoid getting into financial trouble, learn to manage your finances well. Watch out for unnecessary costs and don’t spend on unnecessary things. Remember your bottomline and keep a record of everything.

Price your products and services well.
Be careful with pricing because this is one area that many freelancers find troublesome. Price your product or service too high and you could drive away clients. Price them too low and you will be selling at a loss.

Know your break even point.
Earnings do not translate to profit, at least not after you’ve deducted all your expenses. Learn at which point you will break even so you can compute if your freelancing business does give you return of investment. This will help you determine if you’re doing things the right way and to make corrections in time.

  • Great post! Definitely pricing is tricky but of the utmost important, and knowing one’s break even point is essential to pricing correctly.

  • Thank you for sharing these tips. It is important because now a days it is increasing in everywhere.

  • Great post. Good advice for all finance management. Keep up the good work.

  • thank you for sharing this. i think this will be help full for all.

  • One thing I’d like to add is: when you have money at the bank (or a coop), get a loan even if you don’t need it, then pay for it on time. The rationality of this is, it’s easier for banks to lend money to you when they know you have collateral (especially funds deposited at their bank), than when you have none.

    If you build enough credit history with your bank, the next time you borrow when you really need it, you’ll get the funds easier than when if you hadn’t done this earlier. It’s a fallback safety net when projects aren’t coming your way much and you need the funds to sustain yourself during slow times.