Running a creative business as a freelancer or
That’s where putting cash flow management strategies to work comes in. Actively keeping tabs on your financials allows you to stay profitable and invest in growth. Try these seven tips to smooth the flow of cash in and out of your creative business.
1. Reevaluate pricing and services
The first place to start with cash flow management is revisiting what you charge for your creative services. Rate your services too highly and you may find it hard to stay fully booked with clients. Undercut your rates and you might struggle with turning a profit.
The goal is to find the sweet spot in-between, while making sure you are charging what your time is worth. If you haven’t updated your rate sheet in a while, as yourself some questions:
- Do you charge every client the same rate or is pricing varied?
- Has your workload for each client increased, decreased or stayed the same?
- Have your expenses increased or decreased since your last rate update?
- Do you know the minimum baseline rate you need to make to maintain positive cash flow? (Pro Tip: Do the math backwards)
- Are you accounting for extras like taxes and credit card fees, or the time you spend on calls, emails and research?
Research what other creatives with similar experience in your niche are charging as well. Use that as a guideline for updating your rates to reflect your expertise and the quality of services you offer.
Beyond reevaluating your pricing, it may be worthwhile to dig deeper into alternative methods to boost your bottom line. Are there additional income streams you’re ignoring? Brainstorm other services or products you can offer to reach a wider audience like classes and workshops, or webinars and online courses. Could you package products or services into bundles? Not only does this mean more business for you, but it also makes customers feel like they’re receiving more value for their money.
2. Examine expenses
Income is one side of the cash flow equation; expenses are the other.
As a freelancer or solopreneur, your expenses likely include the basics, such as internet access and a laptop. But if you’re in a specialized niche such as graphic design, you might need special software or equipment to run your business.
Take a good look at your monthly expenses for the previous year. Zero in on costs that have increased or decreased, as well as new expenses you’ve picked up along the way.
Then, consider what’s essential to making your creative business work. For example, you might be paying for recurring subscription services or monthly fees for a project management software. Look at what you really need to keep your business going and trim the fat. For the expenses you keep, consider switching to a cheaper (or free) provider if possible.
To see all 7 Tips, read the entire article from Honeybook/Rising Tide.
Need some help getting focused or reorganized in your business? Contact us to see how we can help streamline some of your processes and potentially relieve some cash flow issues.