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How to Easily Conquer Your Cash Flow Problems as a Freelancer

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There are certain phrases out there with the magical ability to simply shut off my brain, regardless of whether they’re relevant to me or not. One of the big ones? Cash flow. – PowerPoint PPT presentation

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Title: How to Easily Conquer Your Cash Flow Problems as a Freelancer


1
How to Easily Conquer Your Cash Flow Problems as
a Freelancer cash-flow There are certain
phrases out there with the magical ability to
simply shut off my brain, regardless of whether
theyre relevant to me or not. One of the big
ones? Cash flow. Its one of those phrases that
sounds like it should come out of Charlie Sheens
mouth in an 80s corporate blockbuster and I
would much rather not listen to Charlie Sheen at
all. This, my friends, is where I have to tell
myself to get over it, because cash flow is a big
deal. For freelancers, cash flow is an epic
deal. Lets unpack this phrase to make it a
little more relevant and less like one should be
wearing a power suit while saying it. Cash
Something We Need, Big TimeFlow Steady,
Continuous Movement Basically, we need cash to
be flowing in and out of our businesses like a
dependable river or a chocolate fountain that
never gets unplugged. And how do we do that? I
think good ole Aesop got it right with his fable
The Ant and the Grasshopper.
2
But first Before we explore an ancient fable
and use it to understand cash flow, I want to
briefly touch on the importance of a killer
invoice when it comes to getting paid An
invoice is one of the most effective ways to show
your clients that you mean business when it comes
to getting paid for your work. A casual, vague
invoice tells your clients Hey, its cool, man.
Just pay me when you get to it, while an invoice
full of specific detail and clear expectations
says, Youre cool. Im cool. I do good work, and
you pay me for it in no more than 15 days.
Cool? So, remember, an invoice should
include -A specific due date as well as your
payment timeline (Net 10, Net 15)-Itemization-Ea
sy payment options Those are just the basics,
though. Click on over here for a more in-depth
look at invoicing. Alright. Back to Ant,
Grasshopper, Cash Flow. In a very small
nutshell, the ant and the grasshopper fable
involves a frivolous grasshopper who sings his
entire summer away, rather than stocking up on
food for the upcoming winter.
3
As the weather cools and the food gets scarce,
he goes to his harder-working insect
counterparts, the ants, and begs them for
food. Those ants totally turn him
down. Obviously, wed all like to be freelancing
ants studiously keeping our heads down when the
pay is good, and not fearing for our lives during
a dry spell. Realistically, though, many
freelancers end up following the ebb and flow of
the feast or famine cycle, becoming intimately
acquainted with Ramen noodles in bulk and the
subtle art of casually mentioning your light bill
is overdue in the presence of you parents and
hoping they write a check. Take a hard look at
your clients. Are you taking in and maintaining
the kinds of clients that will keep your cash
flow steady? Clients who communicate openly, pay
quickly, and want regular work from you are the
ones who will keep you from having to deal with
cash flow problems, and are the ones you should
be focusing on in your search for work.
4
If youve got problem clients, its time to look
at them and reevaluate. Is the work you do for
them minimal enough to not cause problems as you
wait for payment, or are you logging hours of
work and not getting paid promptly? In order to
preserve your cash flow, sanity, and credit
rating, its time to have a serious chat with
your problem clients. If they cant honor your
payment needs, its time to find someone who
will. Another good idea is to diversify your
client base. Do you think those brilliant little
ants are banking on one single kind of food to
get them through the winter? No. Crops die, kids
get old enough to stop dropping food on the
ground, and those ants need options if theyre
going to feel secure. Its no different with you
and your clients. If you put all of your
financial eggs into one clients basket, or even
one specific niche, you run the risk of losing
your entire income. Theres nothing protecting
your biggest client from suddenly going out of
business, and different industries are constantly
in economic flux. Choosing multiple clients from
a few different areas of industry will help keep
you afloat if one of your specialty niches is
sinking.
5
Take a hard look at yourself. A big part of cash
flow is finding the clients to actually get that
cash a-flowin, so its a good idea to check in
with your marketing strategies. Do you need to
spend more time promoting your services? Do you
need to change your tactics? What are others
within your industry doing to promote their
businesses? If youre experiencing a famine or,
at the very least, some freelancing downtime,
ramping up your marketing efforts will make you
easier for new clients to find, and help you stay
consistently busy. The other thing to look at is
your spending habits. Are you following in the
grasshoppers footsteps? Its essential to be
aware of how much you spend on a monthly basis
and what you spend money on. Well talk about
numbers here it a bit, but what Im focusing on
are your habits. Are you aware of how much money
you spend on day-to-day items? Do you even need
those day-to-day items? A freelancer without a
budget isnt a freelancer for long. Take a hard
look at your numbers. Sometimes, the first step
to a more consistent cash flow is to simply see
what kind of cash flow you actually have. This is
a great time to create a basic cash flow
spreadsheet.
6
Now, you can get all crazy with formulas if you
want, but a good look at your cash flow can be
obtained by simply using columns for clients and
months, with a running total at the bottom. This
will show you, each month, what kind of income
you can expect. Coupling this with a spreadsheet
of your monthly expenses will give you a better
idea of how much money youll need, and
when. (If building spreadsheets give you
headaches, youre in luck! Weve created a handy
cash flow spreadsheet for your personal use right
here, so click on over when youre done reading
and get started!) Once youve got your business
cash flow in front of your eyes, youll be able
to create a plan that will send you in a more
financially stable direction. Instituting a
salary for yourself that sufficiently covers your
personal bills and expenses will keep you from
depleting your business stores, and build a comfy
cushion for those times when unexpected expenses
crop up. You can even try changing and
staggering your invoicing dates, if your clients
are willing, so that you can avoid long periods
of time without payment. Stay aware and practice
moderation. I hate to fault that poor
grasshopper for singing its a creative
endeavor, and that in itself is commendable.
Singing all summer long, though?
7
Without thinking ahead? Thats the part that
makes it hard to feel sorry for him. Obviously,
Im using this fable to make a point it doesnt
mean that youve got to follow it to the letter.
To be honest, I dont think those ants had it all
right, either. All work and no singing doesnt
make much for a full life, and since the hope for
a full life is what keeps us freelancing, I think
its a good idea to fall somewhere in between
ant and grasshopper. Stay aware of your
financial needs, sing and eat in moderation, and
cultivate a cash flow for your business that
allows you to live a full and satisfying
life. Article Source  https//www.approveme.com/
freelancing/cash-flow-problems-freelancer/?doing_w
p_cron1468573913.1049399375915527343750
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