Estimated reading time: 8 mins
The global pandemic has affected everyone in a lot of ways, especially when it comes to work. Some of the hardest hit have been freelancers, many of whom are only now beginning to recover.
Research has shown that the pandemic has had a negative impact on 67% of freelancers, while 60% have experienced a decrease in turnover.
For many freelancers, the pandemic has left them in a desperate situation that has meant giving up their freelance business, relying on grants or benefits to get by. Many have had to return to employment just to pay the bills, bringing an early end to their freelance careers.
While events like the pandemic are completely unpredictable and unexpected, it’s important to be prepared for difficulties with your business. Aside from significant events like the pandemic, your freelance business is also at risk of decreased demand, legal action, as well as your own capabilities to carry out your work.
Having a plan in place that will safeguard your business can mean you’re better prepared for the future, no matter what may come your way. Read the advice below for ideas on how you can protect your freelance business.
Be strict about contracts, engagement terms and upfront fees
When you work as a freelancer, it’s all too easy to be generous with your service rates, payment terms and more. But your time is money, and if you’re too generous with it, you could soon end up being caught short.
Having firm contracts with your clients can help get an agreement in writing that outlines both your responsibilities, and your client’s. While you may not wish to do it, having a client pay a deposit or retainer could be necessary to prevent work from being cancelled altogether, leaving you with time slots you may not be able to fill.
Be prepared to provide a range of services
If your freelance business provides a specific type of service, such as graphic design or copywriting, you might want to look at some of the other services you can offer that will help you cover all bases.
When demand for your main line of work is quiet, it will be handy to have some additional services you can offer that your clients could need at any time!
Put savings together
If there is one lesson that the pandemic has taught freelancers, it’s to build an emergency fund. Having an emergency fund is important for all freelancers – you never know when you might need to dip into it.
Your emergency fund will help you keep yourself afloat if you’re not earning much for a while, helping you maintain a regular wage. Having a contingency fund is also important for your business earnings and expenses, making sure you can cover everything as needed if you’re faced with difficulties.
Explore all the help available to small businesses
As a result of the pandemic, different types of help were provided to small businesses. While a lot of freelancers were able to benefit, new freelancers, in particular, found times difficult.
Understanding the type of help that’s available for freelancers can help put your mind at ease should you ever need some help. You may not need it right now, but it’s good to research the different grants, loans and other initiatives available. Knowing what’s out there can help you feel better prepared, while also helping to make sure you’ve got the necessary information and paperwork ready.
Secure some long-term contracts
Freelance work can be very unpredictable, with many requests proving to be ad-hoc. Securing some long-term contracts could help you keep your freelance business afloat when other work begins to dry up.
There are different ways to secure long-term contracts with clients. Having some negotiations with clients can help you put agreements in place for work that covers a longer period. This will give you some security, but it will also help you develop a forward work plan, understanding more about what you’ll be working on over the coming months.
Another way to secure long-term or high-value contacts is to find tender contracts. The public sector’s Find a Tender service could be a great place to start.
Join small business and self-employment networks
Are you taking advantage of all the networks that are available to you as a freelancer or self-employed business owner? Your local community could be home to a great network of like-minded people who will be able to give you advice during difficult times.
There are also wider networks online to help you connect with others in your industry. Facebook Groups are one way to connect with others in a similar field. These groups are not only useful for advice, but they could be a good way to receive recommendations for your services. See what’s available and start making those important connections.
Find ways to make passive income
It’s not uncommon for small business owners and freelancers to have multiple income streams. Some people, for example, invest their earnings into buy-to-let properties, which provide a steady income for those who can afford to own additional properties.
Your website is one of the main ways you can maintain a passive income. Downloadable resources such as e-books, templates and others can help you earn money without having to carry out much engagement. Developing your own elearning platform is a fantastic way to make money in addition to the rest of your services on offer. It can be a suitable tool for a range of freelancers, from makeup artists to software engineers.
Other ways to make money from your own website include affiliate links, selling advertising space and teaming up with brands and businesses for paid-for collaborations. Your website has a lot of potential for helping you earn extra money, so it’s worth exploring your options to see how you can make your website work harder.
Make your personal expenses and operational costs as low as possible
One of the benefits of working as a freelancer is the opportunity to have fewer overheads. If you can keep your business running costs low, you’ll stand a better chance of staying afloat if your earnings dip.
The same goes for your personal expenses. Making sure you have manageable outgoings can help you plan for emergencies, helping your savings stretch further if needed.
Don’t forget to explore the different types of expenses you could write off as part of your tax return, you could claim back much more than you realise.
When you work for an employer, they will have insurance and protection in place that covers the business against all kinds of problems, including mistakes and legal action. When you work for yourself, you need to take responsibility and make sure your business is covered against different possibilities.
There are different types of insurance you could need as a freelancer. Public liability insurance could be vital for a lot of freelancers, especially those who deal with clients face-to-face, such as someone in the beauty or health and fitness industries. You will also want to consider income protection insurance to help give you peace of mind that you won’t be out of pocket if you suddenly became ill or are unable to work for whatever reason.
Maintain strict data protection and cybersecurity policies
Every business, no matter how big or small, is subject to the GDPR (General Data Protection Regulation) rules that are put in place to protect people’s data. Understanding the threats and what’s required of freelancers and small businesses will help you put the right measures in place to mitigate any risks.
Having robust cybersecurity protection in place will be vital for maintaining your clients’ privacy, and can save your business a lot of hassle too. It can be easy to find the right solutions, but you can also consult with GDPR and cybersecurity experts to help you find the ideal solutions for your needs.
Market yourself to secure more clients
While you might have a number of clients already under your belt, you can’t always guarantee their longevity. Difficult periods like the pandemic can lead to the sudden decline or closure of a business, taking away the income that the client brings you.
Finding different ways to market your freelance services can help you secure more clients, even in difficult times. Having a newsletter or contact database for people interested in your services can also help you make contact with people when you’re looking to bring in more work.
Take care of yourself
Finally, when it comes to your freelance business, one of the best ways to protect it is to protect yourself. You’re working for yourself now, and some time off due to sickness can have a serious impact on your earnings for that month. Make sure you take care of your health by maintaining a healthy lifestyle and finding the right work/life balance to help protect your mental health too.
As a freelancer, there are a lot of things you need to think about to help ensure your business is a success. Spend time putting protection in place to help your business – it will pay off if you’re faced with an emergency in the future.