24 Mar Business basics for freelancers
This article comes to us courtesy of Sydney-based Web Profits, a web marketing company down under in Australia . After the “freelance to fulltime post” I realized we have a strong group of readers who are already freelance or thinking about going solo. This is some basic information, so please add your comments on things that might have been particularly helpful to you in running your freelance business.
If you’re a freelance entrepreneur, you may be running multiple streams of business, and your business operations may be quite complex. The greatest asset a freelance entrepreneur can have is a good reliable business setup. Everything from your booklet printing to your business financial plans has to be efficient, straightforward and easy to administer.
Many freelance entrepreneurs shoot themselves in the foot with bad business practices. They may be great salespeople, but they’re lousy managers and administrators. They present themselves and their business deals well, and then fall in a screaming heap in terms of relatively simple business operations.
Freelance entrepreneurs are by definition hyperactive. They usually have a lot of different business interests, and in some cases they quite literally use their phones and/or emails to do most of the actual work. The trouble is that an ad hoc business operation will usually hit a brick wall at some point.
Major contracts simply won’t do business on the basis of a phone call. Banks won’t lend money or extend lines of credit without seeing financial records, a business plan and evidence of good business practices. Creditors don’t take too kindly to a lack of documentation of finances, either. Equally problematic is the fact that these types of operations are by definition inefficient. Records disappear, and a tangle of problems is created simply because of the way business is done. The fact is that some basic business methods work a lot better, and much more reliably.
Setting up a basic business operation
The good news is that you don’t need a complex business structure. You do, however, need one that will do the job for you efficiently. You can use a checklist approach:
- Business plan- A basic business plan is set out like a mini-prospectus. It includes a description of your services, structure, operations and goals. The business plan is also useful as the information basis for credit applications, capital raisings, stock offers, etc.
- Corporate status, if any- You must specify if you’re operating as a corporation or another type of legal entity, like a sole proprietor. People need to know if they’re dealing with a person or a company.
- Financial records- Receipts, expenses, a cashbook, invoices, etc. It’s a good idea to get your tax accountant to help you set up your books and show you how to keep proper accounts. Please also note: These accounts are particularly important if you’re receiving fees, commissions or percentile returns on your entrepreneurial operations. Mistakes in financial administration can be extremely expensive.
- Promotional materials- This area includes everything from business card printing to online information systems and advertising, and effectively operates as your market image and profile. This is both a passive and active business system, and has to be kept up to date and looking good.
These are actually quite simple business mechanisms, and simple to operate. If you’re a one-person show, you can keep things focused on your core business operations with no trouble. Keep your business model simple, focus on keeping the business management elements simple, and the rest is easy.