What we get taught in school and what we learn in the real world are often very different. For example, while we’re taught basic math, most of us aren’t taught how to manage money in school. The same is true for a freelancer. Many people start freelancing because they’re really good at something—writing, content development, social media, etc. They love what they do, have achieved a high skill level, and like the perks of working independently.
But there are a number of skills that freelancers may not have picked up in school or their career. Freelancers are generally highly capable in their field but have little knowledge about growing and running a business. Here are five skills that every freelancer should have in order to achieve success.
Creating a Business Budget
When you boil it down, running a business is about generating more money (i.e. revenues) than you need to run the business. And to do that successfully, it’s essential to create a budget—and stick to it.
To do that, it’s good to start by making a list of all business-related expenses that you have in a typical year. That could include (but isn’t limited to) web hosting, business card printing, software subscriptions/licenses, office supplies, etc. Add all those up, and you have an operating budget, i.e. the amount of money you need to make in order to operate your business.
Now, this budget may or may not include what you pay yourself; some freelancers pay themselves a regular salary, while others simply take from the profits. Either way, be sure to have an idea about what you need to live off of, outside of business expenses, in order to ensure you’re earning enough.
Saving for Taxes and Retirement
One thing freelance business budgets sometimes include is taxes and retirement. But putting it in the budget and actually putting it aside are two different things. Getting hit with a surprise tax bill is certainly no fun; neither is waking up one day realizing you won’t have enough money to retire.
One way to ensure you have enough for both (taxes and retirement) is to regularly put aside funds to cover that. For example, if you know your quarterly taxes are going to be due, and that you’re being taxed at a 25 percent rate, put that portion of every dollar you earn into separate savings account every time you receive payment. Similarly, if you know you need to save a certain amount each month for retirement, put it aside each time you get paid. The key is to do it immediately and to not wait. Otherwise, it’s possible you’ll forget.
How to Craft a Proposal
Proposals are tricky things, and they can make or break your business. Freelancers are often expected to send prospective clients proposals regularly, so knowing how to craft them is an essential skill if you want to be successful.
Our recent 4 Essential Items to Include in a Proposal blog post has a number of items you should include. Another idea: Create a template. That will save you tons of time when crafting proposals.
Learning how to manage your time is so important to a freelancer. Not only will it ensure you don’t work insane hours getting all your work done, but it will help you structure your pricing. For example, if you know it takes one hour to do a specific task, and you know what you need to make from a revenue standpoint, you can calculate what your hourly rate should be—and thus the cost of completing that specific task.
Once you do that, you can figure out exactly how much work you can realistically handle as well as how efficiently you’re working at any given moment.
Good communication is the bedrock of every successful freelancing business? Why? Because freelancers need to be sure they understand what clients’ needs and expectations are in order to deliver work that meets or exceeds those. What’s more, clients don’t always clearly communicate those needs or expectations, and it’s up to the freelancer to figure that out. And they do that by clearly communicating with their client to try to get the information they need to do their job. Ultimately, the better you learn to communicate clearly and effectively, the more successful you’ll likely be.
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