The doom-mongers have been out in force, as Brexit uncertainty and global forces have sparked reports of an upcoming recession and drops in business confidence. And this negative trend has inevitably trickled down to freelancers, with a recent survey from the IPSE finding that confidence amongst self-employed professionals has taken a hit, along with freelancer pay in the last quarter.
While the doom-mongers may yet be proven wrong, as a freelancer it is worth taking some precautions to prepare for uncertain times ahead. Even if your workload and pipeline look healthy at the moment, it only takes a couple of budget cuts or cancelled projects for that to change. So, it makes sense to look at how you can mitigate for a downturn now, while things are still looking rosy. ‘Make hay while the sun shines,’ as they say.
- Diversify: Do you rely on just one or two clients – or just one niche industry - for all your earnings? If so, that could leave you more exposed to sudden changes in fortunes. Instead, try to minimise the risk by having a number of different sources of work, so that losing one doesn’t feel like the end of the world. You can do that by expanding the number of industries you work in, while being careful not to rely on one client for too much of your work. That way if one of your income streams drops off a cliff, you have the others to fall back on, while you line up some new projects to fill the gap.
- Focus on your finances: If your ‘rainy day fund’ is looking a little low, then now is the time to top it up, to ensure you’re covered for any dry spells in the future. Have a look at where you can cut out unnecessary spending, both from your business and personal accounts and try to put away a bit more than usual every month, ensuring you pay off any outstanding debts while you’re at it. And don’t forget to leave plenty in your account for your tax bills, which can come as an extra shock if your earnings drop. There are now loads of digital apps and services that can help you keep on top of your money – have a read of our top finance tools for freelancers for some of the best.
- A mix of retained and short-term clients: Just working on short-term, ad hoc projects can be tiring and inefficient, as you’re constantly having to look for new work and build new client relationships. Plus, it makes it much harder to plan your earnings on a month-to-month basis, making feelings of insecurity all the more likely. If you can, it’s therefore better if you can secure a couple of retained clients that guarantee a certain income every month. Read our blog on How to secure long term clients. You can for example, see if any of your regular project clients will commit to an ongoing retainer, and if not, spend some time targeting longer term projects on The Work Crowd and elsewhere.
- Get it in writing: Most clients are totally trustworthy and wouldn’t dream of doing a runner without paying for your hard work, but that doesn’t mean you shouldn’t take precautions, particularly at times of uncertainty. So, even if you don’t have a formal contract in place, make sure that you have agreed in writing the activity, deliverables, how much you are charging and payment terms, with all your clients. That way, if there are any disagreements down the line, you have something to fall back on. For ad hoc projects, it can also be a good idea to charge 50% of the fee upfront, to give you additional security.
- Give your business (and skills) a refresh: Less work means more competition, so now is the perfect time to think about ways you can give your business a new lick of paint to stand out from the crowd. It could be adding new services to your offering, updating your skills in a certain area, or investing a bit of time in jazzing up your marketing and new business tools. Your business check-up can also extend to reviewing what and how you charge. Can you make any changes to how you package and price your services to show the value you deliver? Or are any of your clients overdue a rates increase?
A lot is made of the instability and insecurity of freelancing, but this doesn’t have to be the case – even with worries of a recession around the corner. By acting now to put a few precautions in place, you’ll be in an excellent position to weather the storm and continue doing what you love for many more months and years to come.
With an average of 12 new jobs posted every week and an average invoice value of over £1,800 so far in 2019 - a 19% increase since 2017 - The Work Crowd is the place to look for high-quality freelance projects. So keep an eye on our latest projects and be sure to keep your profile up to date, to maximise your chances of success, whatever the future holds.