DOABLE FINANCE: Being a freelancer allows you to do want you want while still running a business. However, you may face rare challenges when it comes to your finances. Balancing the budget, surprise business expenses, fluctuating income, insurance, and trying to save for retirement are all elements of freelancer finance.
Being a freelancer allows you to do want you want while still running a business. However, you may face rare challenges when it comes to your finances.
Balancing the budget, surprise business expenses, fluctuating income, insurance, and trying to save for retirement are all elements of freelancer finance.
The ebb and flow of payments from clients doesn’t mean you need to have a tidal financial plan. You simply need to balance your passion and your pay using a few freelancer finance tips.
The following top tips can help you make the most out of your freelancing career, staying free from the 9-to-5 grind.
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Know The High And Low Tides Of Freelancer Cash Flow
The most important tip is that you need to fully understand seasonal cash flow. For instance, freelance accountants have large seasonal shifts that happen every year. During tax season work is steady, but it is followed by a lull for around four months.
Having that down month cash in the bank is vital, helping a freelance business sustain during slow seasons. You also need to know the sales cycle for your industry. If you’re a retailer that sells $15 items, your sales cycle could be fast. This makes having liquid cash not much of a going concern.
However, if your company is B2B, your sales cycles may cause you to need extra capital to weather long periods without sustainable profits. After all, the second reason small businesses fail is lack of cash.
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