One solution is to raise your rates, and if you’re talented and sought after, that may be easier than you think: you can find tips on how to do that in this article. But if you’re new to your career or already short of work, this might not be the best approach. Especially since your customers may also feel the effects of the worsening economic situation.
If so, it’s time to look at the opposite side of the equation and increase your profits by reducing your costs. In this article, we’ll look at a few ways to do that, based on both our own experience and advice from Creative Boom audiences.
Each of these tips might not save you a ton of money on their own, but follow them all, and you might soon find that your cash pile is piling up.
1. Improve your cash flow
What can make an even bigger difference than getting paid more overall is getting paid on time. After all, most of the time when freelancers’ bank accounts are empty, it’s not because we haven’t worked; it’s because we’re still waiting to get paid.
Getting paid in full and on time often feels like a job in itself, and it’s as much about getting our own affairs right as it is finding clients. Because of this, we tend to put off all the things we need to do, bury our heads in the sand, and focus on our creative work instead. But if you’re worried about paying the bills in 2022 and beyond, this approach won’t be enough.
Being disciplined – invoicing as soon as you complete a project and chasing after the standard 30-day payment deadline – can make all the difference. But if you find it hard to do, this might be one of those cases where you have to spend a little to save a lot. There are plenty of services online that help you automate your finances, and many freelancers swear by them.
“I’ve found QuickBooks invaluable for mileage, invoices, and accounting automation,” says illustrator and designer Anna Hamill. “It syncs with my work bank account and makes it much faster and less of a pain.” Freelance designer Mel Gardner, meanwhile, recommends FreeAgent. “It’s great accounting software that makes accounting and time tracking a breeze,” she says.
Cash flow can also be an issue when a project goes wrong and is cancelled. “So always include a ‘running fee,’ in case your client decides to cancel the job midway through,” advises designer and educator Jenny Theolin. “It will cover any work done beforehand, as well as give them a ‘no questions asked’ exit clause.”
2. Enter your expenses
On some projects, your client will agree to cover your expenses. When this doesn’t happen, you still need to carefully track the expenses so you can recover them against tax. And yet, in reality, many freelancers fail to do this as accurately as they should and end up missing out.
“As a freelancer, you have to spend EVERYTHING you can”, emphasizes the artistic director Joe Kibria. “It’s worth checking out what’s included as I was completely unaware that you can even spend part of your rent and even £150 on a (small) Christmas party.”
If you drive a lot for work, it can be hard to remember to log your miles or even know what they were. For this reason, designer and photographer Mike Hindle recommends the Driversnote app. “It records all your trips and calculates your business mileage and the amount to deduct from your tax return,” he explains. “So it’s currently saving me hundreds of dollars every month.”
3. Don’t splurge on technology
You don’t need the latest technology to be a successful freelancer. Indeed, as a general rule, you should avoid getting the latest and most expensive technology when cheaper alternatives are available. And when you upgrade, also try to get money for your old gear.
“Buying refurbished models is acceptable and saves money and helps the planet,” says award-winning designer Berenice Howard-Smith. “Apple’s products are good, and my GiffGaff phone is like new. I haven’t bought new tech in a long time. Trade or transfer, especially that box of cables. Someone will want that mystery lead.”
4. Reduce the cost of subscriptions
Subscriptions to online services can really add up over time, even if the individual amounts seem small. And in truth, most of us continue to pay for services we don’t use.
“Check all your subscriptions for those you don’t use and cancel them,” urges freelance graphic designer and podcast host Liz Moseley. Also, be sure to stay on top of “free trials,” as they usually take your credit card ahead of time and then start charging you if you don’t remember to complete the trial in time.
And with the subscriptions you want to keep, be sure to keep your costs as low as possible. “If you can and you know you’ll use it, pay for apps annually rather than monthly,” suggests designer Dave Smyth. “There’s usually a cost-benefit to doing this, and it also saves time in accounting.”
Public relations and marketing freelancer Carolyn Hughes offers another piece of advice. “Many online subscriptions allow you to have a certain number of users,” she points out, “so I split that cost whenever possible with other freelance friends.” And freelance visual artist and creator Keith Hawkins adds, “Adobe’s Creative Cloud is a negotiable service. So contact them if you are about to subscribe or end a subscription.
This last point can also apply to other operating costs, such as telephone subscriptions and insurance. Typically, companies will increase your fees year after year if you’re just threatening to leave, and they’ll suddenly give you a discount.
5. Review every expense
In addition to the technology and online services you use for your job, there are other ways to cut costs as a freelancer. One of the biggest benefits of working for yourself is that you can set your own hours, and that’s something you can leverage to save money, both during and outside of working hours. .
Essentially anything you can do outside of peak hours you should do. So travel outside peak hours when fares are lower. Visit supermarkets at unsociable hours when the end of the day bargains need to be had. In short, do everything to limit costs…because the more you spend, the more you have to work.
It’s worth taking the time to review all the expenses you have as a freelancer. To take one example, Anna Hamill buys discounted stamps from various websites, saving up to 25% on post orders. Also consider when you can work from home instead of co-working or having an office, and whether you need to spend so much on paper and printer ink in an increasingly digitized world. As senior freelance writer Jonathan Wilcock says, “I used to think I had to print everything, just to be safe. I was wrong.”
Finally, since this article was largely inspired by the rising cost of energy, ask yourself how much you really need to heat your studio or home office.
“Even before the energy crisis, few people could afford to have the heating on all day,” points out Carolyn Hughes, public relations and marketing freelancer. “So I wear a hat and scarf all day, as well as a blanket. I also go for a run in the middle of the day in the winter to warm up my body temperature. Cut those heating bills down!!”