The following is a guest post by Thursday Bram.
Last month, Lara posted about the numbers that go with launching a business from home. It’s a topic that rings a bell with me and I asked Lara to let me write a follow up post.
I write a lot about freelancing, including a regular column where I answer questions from freelancers. It’s incredible how many questions come in about where freelancers can save money — especially when you consider I’ve never ever received a question about where a freelancer can invest money that will let her grow her business.
The Money-Making Mindset
Freelancers are reluctant to spend money, as a general rule. It’s understandable: many of us have to pay our personal bills first and grow our businesses as an after thought. But if you’re willing to spend some money to make some money, you can grow your business and increase your income significantly faster.
Developing that mindset is tough, I’ll admit. We want to keep as much money tucked away in our savings accounts as possible, ready for the inevitable dips in our income. You have to think in terms of what your money can do for your business if you’re willing to invest it. Once you’ve got the mindset, though, it becomes easier to find a balance between saving money, spending it on personal expenses or investing it in your business.
The Right Places to Be Spending Your Money
An accountant: Before you tell me that an accountant can’t help you make money, let’s look at a few numbers, shall we? The last time my husband and I did our own taxes, it took almost twenty-five solid hours of work. Our accountant charges around $300 to do our taxes every year —and you had better believe that that I can make a lot more in those twenty-five hours that he frees up. On top of that, his fees are deductible as business expenses and he finds all sorts of tax savings that we wouldn’t even know to file for without his help. By the way, I’ve incorporated my business — most freelancers would pay about half what I do for tax preparation.
I’d suggest taking it a step beyond just having an accountant do your taxes, though. Sit down and talk about your plans for your freelance business, as well as your financial goals. A good accountant will be able to show you ways to make your business more financially stable, save for retirement and otherwise handle your business finances better.
Project management tools: I don’t care what you use, but spend the money on whatever makes it possible for you to work faster and more efficiently — as well as to appear more professional for your clients. If you can show your clients even a little bit of your process during the proposal phase, you can impress them that you’re the real deal (even if you’re working in your pajamas). It doesn’t hurt that getting organized will often make it so that you can work a lot more on projects that actually bring you money.
Going to conferences and events: No matter how small your business, going to events where you can meet prospective clients is crucial. You have much better odds of selling your services (or anything else) if you can create a relationship with the client you want to work with. I’m not talking about events that cater to you and the type of business you run, though. You need to be at the places your clients are going to in order to improve their own businesses. If you can be there as some sort of expert (a speaker, an organizer or anything else), so much the better.
On-going education: Continuing education isn’t just for professionals that have to maintain their certifications. Keeping up with new trends, as well as adding to your skill set is worth spending a fair chunk of your business budget on every year. I’m constantly buying ebooks, taking classes and doing anything I can that will help me offer more to my clients and do more work, more efficiently.
Thursday Bram has been freelancing for more than eight years — the last four full-time. She’s the co-founder of EnhancedFreelance.com, a membership site for freelancers ready to up their game.