Creating a successful IT freelancer business is not an easy prospect, at least to start with, and the stress of keeping the business moving forward (and doing all the admin tasks) is compounded when you’re not sure when your next invoice will be paid or where your next gig comes from. Does it need to be a brown-trouser moment?

Heck, you got out of corporate-ville for a reason – you want to be in control and probably earn stacks of cash whilst you do, but your penalty is the uncertainty and effort you need to put in, often during unsociable hours.

However, it doesn’t need to be difficult if you follow some basic steps and your common sense which will keep you sane and your head level as a successful IT freelancer.

Be Upfront With Everyone Right From The Start – Be upfront with everyone you associate with (friends, family, customers and associates) that you’re a freelancer and your job is to earn revenue to keep the business moving. Spend as much time as you need to explain that you will focusing on your business, especially when you’re launching it, and that you will be devoting a lot of time to building it up. You’re making a commitment, and you need their support.

It’s important to be crystal clear that your intentions are to build a successful business – not line your pockets or act as a charity. Share your view of timeframes and key events which you are working to, and make sure that people understand that during those key events you won’t have time for anything else.

Keep Your Expenses As Low As You Can – Your income is going to be unpredictable! Some months will be bear with very little coming in, and then some will also feel like bumper months. It’s important to avoid spending too much during those bumper months, as your next one maybe arid! So don’t go and blow cash on a new iPod because your bank balance increased by more than the usual monthly amount.

It take discipline to view income as a long-term benefit and keep your costs low whilst you can predict how the money will be spent or pay your taxes.

Plan To Make Considerably More Than Your Target Income – You’ve got to aim high as in reality it’s rare to earn more money than you expected to. If you need $4,000 per month to cover business expenses and your personal income, then aim much higher – say $10,000. So your sales and prospecting activities need to target $10,000 in order to ensure that when reality bites, you can cover the bills and your income.

When you predict revenues that barely cover your expenses you will inevitably have to lower your expenses or take less income during bare months.

Look For ‘Cross-Sells’– Getting a foot in the door is a prized outcome for salespeople. Making an initial sale often leads to more sales of complimentary or higher value products. Why should you be any different? One you have built a stable relationship with a customer, begin to look for opportunities to cross-sell other services to your client. This could be anything from simply more of what you are currently contracted to delivery (OK, not strictly a cross-sell) to selling in the services of an associate, which you could take a small cut or fee from. Use the fact that you have already sold to your advantage.

Be A Savage Invoicer – As a permie, you wouldn’t take crap from your boss if your salary was late. Would you? So why accept excuses and breaking of your payment terms from your customers? As a freelancer, cashflow is king. You must be totally ruthless in holding your customers to their payment terms and chasing every invoice, even if you have to pay someone to help you do it for a while. Once a customer is allowed to slip once, then they’re much more likely to slip again. [See my other article on chasing invoices here.]

Plan Your Week, Ahead – There is an old proverb ‘He who fails to plan, plans to fail.’ Just because you’re an independent freelancer, it doesn’t mean this won’t apply to you! I’ve found it easier, in fact, to slip on projects if you don’t have a boss supervising you. The result: a disappointed customer, and no repeat business.

It’s a simple remedy: create a weekly schedule of activities where you’ll track your projects, report to customers, create and send invoices, etc. And stick to it! Without the discipline to stay on plan, you’re putting your business at risk.

Another side-effect of being more rigorous in your planning is that you have greater visibility of how much time administration activities take, giving you a choice to a) stay as you are, b) make them more efficient by improving your process or finding tools to help you, or c) outsource them entirely. Having the knowledge gives you the option.

Minimize Loafing – Permies have some leeway in how much non-productive time they can spend. You must have done it, or seen it: it’s the browsing the web during the lunch, or chatting about the game last night to your colleagues. Not all time in the work place is productive. As a freelancer, this time – loafing – is at your cost. Because you won’t be getting paid for it. The occasional ‘five minutes’ can add up to many hours during a week, and it’s these hours that are burnt income. This isn’t the same as taking a break – it’s important to factor in down-time during your day to recharge batteries – this is the wasted time you lose due to being distracted.

It’s much easier to be distracted at home due to your home comforts, TV, and the trappings of hobbies. Just as Drew Douglass says in ‘Mistakes I Made as a Freelance Web Developer and How To Avoid Them’ :

just because we work from home doesn’t mean that we should act like we are at home all the time

You have to monitor what distracts you – is it the TV? The Radio? Your favorite porn-site? Tweet alerts from TweetDeck? Whatever it is, if it’s causing you to loaf then quit it before it costs you dearly!

Important: make sure you record all the time you spend on projects so you can accurately bill your customers; you need to know how much time you’re really spending on different projects to manage your time properly. If this is a current nightmare for you, consider using a physical device which makes the whole things easier, like these from AlliedTime.com.

Choose The Right Projects at the Right Time – Once your business gets off the ground and, with good tidings, customers are coming to you (rather than you chasing work), you will have choices in which projects you do, and when. Often, you will be delivering more than one project at the same time. It’s real important to focus on the right project at the right time. It’s tempting to keep switching between projects on a whim, but the process of switching mode absorbs a lot more time than you might realize and the outcome is reduced productivity. So it’s an absolute must to choose projects that are ‘congruent’, that is, have common aspects that enable you to optimize your delivery. For example, two concurrent projects where one is based on the West Coast, and the other on the East Coast won’t allow you to travel between customer sites often and easily.

Complete and Finish – I am not a natural Completer-Finisher. This puts me at a disadvantage. As a Freelancer, you don’t get paid until the job is done (generally speaking). So not pushing a project to completion and starting another means that you won’t get your invoice honored. I have to really push myself to complete a project so I can get the bill out. Finish… and get paid!

Be Courageous in Calling Out a Bad Project, as a Bad Project – Sometimes, a project doesn’t go to plan. Maybe your customer has changed their minds too often, or you’re not equipped to deliver like you thought you were. Your heart might not be in it. For whatever reason, some projects just don’t happen in the way you expected, and it’s a courageous freelancer who puts a project on hold to rectify the problem.

Here’s the thing – not calling this out hurts you more in the long-run. Why? Well these projects tend to cost you more, they don’t deliver to customer’s requirements, they damage your reputation, they damage your confidence, and they’re NOT FUN. Mustering the courage to call this out in order to correct it is the best thing you can do. Sometimes, you just have to drop the project all together. Or a crisis talk with your customer is an opportunity to make essential changes. Better late, than never.

Do YOU Have Any More Tips?

Have you discovered an essential tip that enabled you to build your freelance business? Share it by telling us YOUR story…

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About the author

Simon
Simon is a creative and passionate business leader dedicated to having fun in the pursuit of innovation and personal development

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2 Comments for 10 Essential Tips for IT Freelancers

Michael Cruse

This is just outstanding. I know when I had my own consulting company, I made so many errors. We would allow clients to pay late or accept a much lower than market rate to just get work. We gave some clients crazy discounts because we were terrible at negotiations. Years later, I am still close to some of these ex-clients, and they all tell me that we were pushed around because we allowed it to happen. They saw a weaknesses they could take advantage of for the benefit of their company, so they did. A hard lessons learned.

I could not agree more with your comments on being a savage invoicer and cash flow is king.

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simonstapleton

@Michael – it must be great to have clients that are willing to give you this feedback! It also goes to show that clients will deliberately avoid making payments if they can, and you have the first hand evidence to prove it. Where cashflow is king, this will always be a problem if we allow our customers to get away with it.

If you haven’t read my article ‘Freelancers: Chase Your Invoices‘ then you must take a look at it today.

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