5 Ways Freelancers Can Beat the Odds and Survive Long Term
Freelancing has an unmistakable appeal. You’re able to work flexible hours and wear what you want to the “office.” Your commute time is the 15 seconds it takes you to walk to your couch. And you can travel the world, interacting with clients and completing assignments wherever technology permits.
But before you quit your day job, consider this sobering fact: only a third of all freelancers survive beyond 10 years, and a mere 25 percent are still in the game by year fifteen.
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Though many people may believe that a freelance career is based purely on luck, there are actually definite steps that all successful, long-term contract workers seem to abide by. There are no guarantees, of course, but by following these tips, you can increase your odds of making it past that ten-year mark.
Here are 5 ways freelancers can beat the odds and survive long term:
The biggest problem you will face as a freelancer is cash flow. Some seasons are inherently slower than others—think post-holiday season—and regular clients can vanish overnight on you, taking a percentage of your income with them. This is why it’s so important to plan ahead for those dry spells.
Set aside some money each month (at least 10 percent, but more if you can) to build a 6-month cash reserve. This means that you should have enough money to live for six months in the event that you draw zero income for that period of time. More likely it will simply be your safety net—not to mention peace of mind!—that you can use for emergency expenses and income supplementation without going into debt.
Planning ahead also means consistently marketing, even when you’ve already got plenty of work. You may not be able to market as much when you’re busy, but you don’t want to suddenly have an empty schedule and no leads. Many freelancers do all their marketing on one day of the week or every morning for a couple of hours. By looking ahead like this, chances are when the work slows down, your marketing efforts from last month will pay off.
Your dream job may be simply to ghostwrite autobiographies for celebrities, but the reality of succeeding in a freelance career is that you must diversify. So writers can also be editors or social media strategists. Web designers may do consulting work or video animation. Business consultants should think about teaching or writing books.
Eventually you may be able to focus on one niche, but until then you will have more options if you are willing to expand your list of services. When you take on a variety of projects, you will broaden your skills and be able to charge a higher fee because of this. For example, a freelancer who only writes blog posts will have a shallow pool of work to choose from and rates to offer, but someone who writes articles, is skilled at SEO, and is proficient at online marketing not only has more jobs options, but can charge more for them.
Keep Overhead Low
If you can’t live without an expensive car, a summer home, and five-star dining every week, freelancing may not be the career for you. Certainly many people do achieve this kind of lifestyle, but it doesn’t happen overnight. You absolutely must spend less than you earn, and at first this financial ceiling may be quite low.
You’ll need to keep a tight budget and monitor your income versus expenses, and not just on a month-to-month basis, but on a big-picture basis, too. That way, when you have a great month, you’ll be clear on how much of that money you can freely spend and how much you’ll need to put into savings or hold over for the next month because it looks to be a slow one. Don’t forget to take all the legitimate tax deductions available to you and keep track of your business expenses.
Freelancer’s Union offers a basic overview of some of the most common deductions freelancers can take. It’s definitely worth it to hire an accountant who specializes in freelancers because he or she can give you a list of detailed deductions based on your specific profession.
Act Like a Business
Nobody needs to know that you work in your sweatpants on your couch and burst into tears when overwhelmed. But that doesn’t mean you should act any less professional than a CEO at a large firm when conducting business. Return messages promptly, have a businesslike e-mail address and signature, always be cordial, and deliver quality content on time, every time. Your website and profile picture should convey the same message of competence and approachability as well.
Acting like a business also means paying quarterly taxes (or “estimated taxes”), rather than waiting until April and then having a meltdown because you don’t have the entire sum of money for the taxes you owe. Based on the previous year’s taxes you paid, divide that number by twelve and then set aside the money each month that you will pay every quarter (four times a year). You can set this up with the IRS directly, or if you’re working with an accountant, have him or her do it for you.
Invoice promptly and make sure your bills have your business name and logo. A professional always follows up on outstanding invoices cordially but firmly. If this is a task that you’d rather not do, you can always use a system like Hiveage to take care of invoicing, sending estimates and reminders, and any other related correspondence. You can also use our Free Invoice Generator to create and send quick one-time invoices for free.
Take Care of Yourself
Freelancing is a profession that can become all-consuming, especially during the busy season. It can be hard to take vacations or even full weekends, but if you’re not careful, the stress can wear you down. And if this happens, you’ll suddenly be forced to take time off to recuperate and possibly even leave a few projects hanging.
Here are some things you can do to avoid burn out:
- Make sure you write deadlines down on a calendar so that you know how much time you need to devote to each one.
- Learn how to say no. It can be tempting to erase the word “no” from your vocabulary out of fear that turning down work will suddenly stop the flow of work. But the paradox of success is that sometimes saying “no” can actually help your business.
- Reach for veggies and fruit rather than mindlessly grazing on junk food while you are working. Sugar and other empty calories may give you a quick burst of energy, but it depresses the immune system which will eventually lead to illness or ongoing fatigue.
- Get up and stretch or take a brief walk approximately 10 minutes for every hour that you’re sitting at the desk.
- Ensure that you get a good night’s sleep every night. This means turning your computer off several hours before bedtime so that you can relax and wind down.
- Don’t forget to have fun! Take regular time off to go to the movies, hang out with friends, read a good book, or enjoy yourself in whatever other way suits you.
Going the distance in the freelance world is a bit like running a marathon. Careful preparation and extensive training are needed to develop the stamina it takes to keep going even when things seem hopeless. But the ultimate goal—to be able to support yourself doing something you love—makes every step worthwhile!
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