A few days ago I wrote 5 Sanity Tips for Overworked Consultants where I told you to take some time for yourself.
I realize that many freelancer’s/consultants have already worked themselves in to an untennable situation.
You’re already way over committed.
You feel like you’re drowning.
You’re all work with no margin for life or the unexpected in a project to happen.
You have no idea how to get yourself back on track so you can start taking time for yourself again.
Identify the cause
Most of the freelancer’s I talk to feel overwhelmed because they haven’t learned to use the word NO.
They don’t turn down projects.
They always say they can hit the most insane deadlines imposed by clients.
For most of you learning the word NO is not the root cause of your issues.
The typical freelancer doesn’t say no because they live project to project with little thought of real savings for a rainy day let alone savings for taxes. Taxes happen people not saving 25% of your income (at least) for taxes simply makes you stupid.
When you live project to project you are on a constant treadmill of bringing in new work. Any work at any cost with any timeline.
I said it last week, I’ve been there. 90% of the freelancer’s out there have been in the same spot. The vast majority are still in that spot.
But if you’re reading my site you don’t want to be like the vast majority do you?
Adding margin back
One of the first steps you need to take to get some margin back in your life is to start pricing your services properly. Most of the freelancer’s that talk to me can double their rates and still be affordable.
Today isn’t a treatise on pricing since I just wrote a whole series on pricing.
Read the pricing and then start pricing your time like you value it so that people actually do.
Savings
What would you do if no more work came in this month? What if it stretched in to next month? Could you pay our bills?
The sad fact is that most of you are a bit scared at the thought of no work coming in for 2 months.
I get it, I’d be a bit worried as well but I’d still be able to pay my bills at my full regular salary for 2 months. Actually I’d be able to pay myself for 6 months at my full salary before my wife and I had to start dipping in to our emergency fund.
That means when a less than awesome project comes up and I don’t have any other work I can still say no. My children will not have to live in boxes on the street.
If you’re not able to save for your taxes (at least 25% from all of the freelancer’s I’ve talked to) plus 5% more out of each project then you’re doing something wrong.
Maybe you need to price your services better but just as likely is that you need to really deal with the next item.
Budgeting
I’ll say it up front, I hate budgeting. I’ve got this crazy wife that enjoys doing it so I rely on her to do this for me and we talk about the budget together after she’s gone over it.
If you missed it my wife wrote a series on budgeting and I talked about it in my book
I still dislike the extra short meeting we have about it.
Budgets are one of the most important things that a freelancer can do though and not just in your business. Do you have a budget at home? Are you intentional with every dollar you spend?
One of the common things I hear when talking to freelancer’s that are able to make ends meet comfortably is that they do have a budget. They know how much they can spend on software in a year and save for it.
They realize that they’ll need to replace their computer every 2 – 3 years and save for it.
90% of the time they have a budget at home.
When talk turns to the year their business really started winning we always end up talking about business budgets and starting to budget at home.
Those of you that are scrapping by likely don’t have a budget and unfortunately probably are glancing through this section instead of reading it.
You likely read the short section on pricing with great interest though.
Take away
If there is one thing you do today read the series on budgeting and start doing it. I admit to not enjoying budgeting but I know that my family and my business really started being properly successful when I started budgeting.