6 Tips for a Fiscally Fit and Successful Freelance Business in 2013

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by Caron_Beesley, Community Moderator

Created: January 24, 2013, 8:30 amUpdated: January 24, 2013, 8:30 am

Thinking of becoming a freelancer or hoping to make this year’s freelancing more fiscally fruitful than last? Freelancing is a money game and cash flow is king. And while there may be times when your cup runs over, there will no doubt be other times when it looks ominously dry.

To be a successful freelancer—in addition to being good at what you do—you need to be agile, tenacious, a consummate planner and equipped to deal with fiscal downtimes.

Here are some money-saving and business growth strategies that you can use to ensure the fiscal fitness of your freelancing business this year.

Have a Financial Cushion

Every freelancer needs a financial cushion; in fact, you shouldn’t quit your day job unless you have one. It can take up to six months to build your client base and develop consistent income. Instead, start your freelancing activities “on the side” until you are ready to transition to full time business ownership.

How big should your cushion be? Start by factoring in your living expenses for the next six months and allow for any emergencies that may arise. Next, assess what percentage of your income you’ll need to put aside to make your estimated taxes, social security and Medicare payments. Consider setting up a separate bank account and allocate 30-35 percent of every check you receive for work done into that account. This will help you avoid any day-to-day temptation to dip into it while ensuring you have the money to pay your estimated tax requirements when the time comes.

Reduce Your Overheads

Most freelancers can work from home. If you really need social interaction or want to leverage the brainpower of fellow freelancers, consider a co-working space (now available for a low-cost in many cities) or even your local coffee shop. 

Likewise, buy as little as you need. If you’re not commuting anymore, do you really need an expensive 4-wheel-drive SUV or truck in the driveway? Do you really need the latest high-end smartphone or laptop or could a cut-price one do the job just as well? What about computer software—could you cut costs by using a free email service or a low-cost word processing app? What about buying surplus office furniture?

For more lean spending tips, read: 6 Tips to Rein in Spending and Be a Lean Start-Up.

Invest in Good Back-Up and Use it

If there’s one thing that any freelancer can be sure if in their business, it’s that one day your PC will succumb to the dreaded “blue screen of death,” be infected by a virus or taken over by malware. Without an IT department to turn to, you’ll end up throwing cash at an expensive fix and risk losing all your work and business records in the process. Regularly backing up your work, both to a standalone hard drive and to an online location (providers like DropBox, Symantec, and Carbonite offer free or low-cost services) will ensure your data is protected and always accessible. Get more tips here: Finding the Best Backup Option for Your Small Business Data.

Look for Ways to Expand Your Business on the Back of Existing Work

Growing a freelancing business is a challenge. Networking often takes you away from existing work, while developing and nurturing new relationships into profitable clients takes time. Instead, look for to expand your business and earn more money with existing clients, based on the work and track record that you already have. Check out some tips for doing just this in my earlier blog, 5 Ways to Become an Indispensable Freelancer and Earn More Money from Your Clients.

Collaborate with Others

Growing existing business is good, but it’s also important to have multiple streams of income. One option for growing your business this way is to team with complementary businesses. For freelancers, for example, work on building relationships with those who serve your target customers. Photographers could collaborate with wedding planners, or graphic designers could team with marketing consultants.

Don’t Be Afraid to Ditch Unprofitable Clients

Freelancers often price their services at different rates in order to secure business. But if a low-paying client is also your most demanding and tricky client—whether based on the work you are required to do or the nature of the relationship—it might be time to cut your losses, walk away from this type of low-margin work and concentrate on deepening other relationships.

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesleyTags: Community Blogs, Small Business Matters, Managing, Starting

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7 Tips for a Starting a Successful Customer Loyalty Program

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Got a loyalty card in your wallet?

Small business loyalty programs are a great way of showing customers that they are valued. They encourage return business and help you gather information about your customer demographic. Loyalty programs can also boost your marketing efforts. According to Experian CheetahMail, email campaigns that target loyalty program members are more successful – generating higher open rates, transaction levels and revenue. Even emails that invite prospects to join loyalty programs outperform regular email blasts.

Of course, getting your loyalty program right is critical. Industry experts believe the future of loyalty programs lies in mobile technology. But not everyone has a smartphone or the right app loaded to take advantage of your program. The key is creating a program that is accessible to all and easy to use.

Here are seven tips for starting a small business loyalty program:

The Easy Way to Go – A Loyalty Punch Card

If you’re new to loyalty programs and want a low-tech option, the simple punch card formula is a good place to start. Just design and print out a card and offer a free gift after a certain number of purchases have been made. There are a few obvious drawbacks to this method – you can’t track consumer demographics and the program is 100 percent reliant on customers’ carrying that card around with them in their wallet. That’s if they even remember it’s there!

Start an Opt-In Program

Another easy option is to set-up a simple “sign-up for offers/rewards” program. Ask customers to share their email addresses and add them to an opt-in email list – you can do this online or at the point of sale. This form of email sign-up eases the application process and spares your customer the hassle of having them download an app or share heaps of personal information. In exchange, you’ll promise to send them regular communications and special offers only available to loyalty members. As mentioned above, email campaigns that target loyalty members can be a great source of revenue – and, of course, are trackable.

Consider a Premium Loyalty Program

If you want to reward customers who spend the most, develop a program that limits who may be eligible to qualify. Use your customer relationship management software to track higher value purchases over time and invite customers who meet certain thresholds to join. Alternatively, simply invite high-spending consumers to sign up for your program at the point of sale.

Offer Branded Loyalty Membership Cards

There are a number of commercially available loyalty card services that let you design branded cards, track and manage customer behavior such as number of customer visits to your store, average spend and more. Many also let you send targeted email and text campaigns to members. You can even add on other services such as branded gift cards.

Add a Digital Component

While not all your customers will be digitally savvy, chances are many are and it’s increasingly important that you cater to the growing mobile loyalty trend. There are many apps that small businesses can tap into for free or for a fee. If your business already uses a mobile payment platform, many of these are now integrating loyalty programs into their offerings. Explore your options and look for services that offer social media integration – making it easy for customers to share your awesomeness with their friends and even earn points for likes, shares and online reviews.

Choose Your Incentives Carefully

Reward loyalty with some class. Freebies don’t always appeal to all and they can even de-value your services. For small businesses, customer loyalty is founded first and foremost on great service, a personal greeting, and the tried and tested quality of your products or services. So think of ways you can make your incentives and rewards as unique as your business. Experiential rewards are always popular. For example, a hair salon could offer a monthly workshop that offers free makeover tips to loyal customers. These experiences add value to your customers’ lives, build community, help your business stand out and give customers reason to keep coming back.

Communicate Regularly With Your Members

Treat your loyalty members royally. Segment them out in your email and direct marketing efforts and communicate with them often. Share news of upcoming loyalty incentives or events and don’t forget birthdays – offer something unique to members or opt-in email subscribers during their birthday month.

What loyalty program strategies have worked for your small business? Leave a comment below.

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesleyTags: Community Blogs, Small Business Matters, Marketing

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Successful Encore Entrepreneurs Highlighted at National Small Business Week

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National Small Business Week, June 17-21, will feature dozens of successful small businesses from across the country, including entrepreneurs who started their business after age 50.

This year marks 50 years of National Small Business Week, and is fitting to highlight the thriving small business owners over the age of 50 who help drive the economy and create jobs.  The businesses range from a baker of Artisan breads to a helicopter pilot school, and from a maker of skincare and cosmetic products to an aerospace design firm.

The U.S. Small Business Administration will honor these businesses and the more than 100 outstanding business owners in Washington, D.C., on June 21 for their achievements.  The week will culminate with the announcement of the National Small Business Person of the Year.

For more than 70 million Americans over 50, business ownership is a practical option.  It can be a second career or a chance to leverage life experiences into an interesting and financially practical “encore” career.  One in four individuals ages 44 to 70 is interested in becoming an entrepreneur and 63 percent of Americans plan to work during retirement.

One such business owner is Steve Miller of Boynton Beach, Fla., this year’s Florida Small Business Person of the Year.  After a 33-year career in the medical profession as a registered nurse, Miller was ready to dive head first into full-time small business ownership.

Miller received some advice and direction from a business development program through south Florida’s SCORE network.  “Herb Douglas was my business mentor and his guidance and input was crucial,” said Miller.  “Small business capital was not my concern as working out of the home minimized costs but I don’t think I would be where I am now without Herb’s mentorship and input from the great staff at SCORE.

Miller’s background provided him with an in-depth knowledge of the use of hospital devices, and in 2003, he founded EPreward, Inc., to provide precious metals recovery services to cardiology departments and medical offices.  Today, EPreward employs 10 full-time employees and had revenues of more than $2.8 million in 2012.

Small businesses are welcome to attend National Small Business Week events.

Participants can register online until June 12.

CeceliaT is a moderator for the SBA Community. We appreciate your participation and feedback on how we can continually improve the community to meet your small business needs.

Tags: Official SBA News and Views, Open For Business, SBA News and Views

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