Self-employment and freelancing can be fun but it can also be stressful. These tips will help you boost self-employed income and hopefully, get back to more of the fun side.
How to increase self-employed income
If you’re self-employed, you’ll want to optimise your working hours, boost your income and raise your morale.
Put money first
If you’re a freelance writer or designer, you might baulk at this idea. Money’s dirty, right? Wrong. Money buys food and pays for petrol and your pension. Those small, creative, low-return jobs might be mighty sexy, but they won’t pay your mortgage. Add some balance by chasing bigger, better-paid gigs, too.
There’s always a balance, of course. Your small or even unpaid job may lead to bigger things down the road. Or it may lead to you borrowing money from your mum. Learn how to prioritize between the two.
Don't put all your eggs …
You know the rest. Letting one client dominate your order books can be a recipe for disaster. If you rely on one customer for most of your work and that client goes under, you’ll lose most of your income. The steady work is nice while it lasts, but don’t get dependent on it. Actively market yourself to find work from a range of clients.
Log time spent on projects
Being paid £1,000 to draft a case study or design a website sounds great. But if it takes you 50 hours to write it, you’re barely working for minimum wage. That’s after you’ve factored in taxes, overheads, pension, heating, lighting and more.
To a wage slave, £25 an hour might sound like a lot. It’s not. That’s why you should track the time you spend on each project to weed out those that aren’t worth your while. There are a variety of online tools or apps which you can use to track your time.
Tighten up your expense claims
You can boost your self-employed income by maximizing your expenses claims. Don’t forget all the things you can claim for: uniforms, stationery, utilities, travel costs and more. Use apps to help you, such as MileIQ, which logs your business mileage.
Remember, the more legitimate expenses you can claim, the lower your tax bill will be. Lowering your tax bill can be just as effective as growing your revenue because it leads to more money in your pocket.
Keep your rates up
As a freelancer, it’s so tempting to drop your hourly rates to try to secure the work you want. If you reduce your rates by 20 per cent during a recession, once the air has cleared, you’re stuck with that lower rate.
Don’t wait for clients to give you a pay raise. It doesn’t happen. Instead, demand one yourself. That might mean clearing out low-paying clients and finding more lucrative ones. If you’re affordable to everyone, you’re not very special.
Set minimum fees
Take a look at your order book. Are all your projects in the £100-£300 range? Are they all one-offs? This is not good.
Every new client demands a new learning curve and a bunch of admin work. Find yourself clients who can offer repeat work. Or better still, set a minimum project fee that can incorporate all your costs. For the above example, this could be around £500.
Turn down pro bono work
What? That’s like torturing puppies, isn’t it? No, it’s not. Doing work for free might make you feel good, but it won’t put bread on the table.
Set a limit for your pro bono work—maybe one project per year. Remember, you and your business must first be a success before you can really start giving effectively to charities.
Outsource
Yes, you’re self-employed and you like to do it all yourself. But spending all that time on admin means you’re not spending time on things that drive value. That could be marketing yourself, making sales or doing the thing you’re good at. Outsource the humdrum stuff while you chase new work.
