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Money Management for Freelance Designers

Posted: May 6th, 2011 | Author: | Filed under: Finance and Loans | No Comments »

You must be excellent when it comes to money management for your graphic design business, because most small business owners are feeling squeezed by a global economy that continues to spiral downward. It will cost you more to run your business and you may have to prepare to earn less. The number one cause of business failure is poor money management. If you don’t shore up your finances, you may find yourself another statistic.

Begin with You

If you do a lot of freelancing, consulting and contract work, then your business and personal finances are for all intents and purposes the same. You should avoid comingling your personal and business monies so that you don’t run into problems with the Internal Revenue Service. At the same time, how you handle your personal finances will have an impact on your ability to stay on the freelance path. If you don’t manage your money well, then it’s time to get help.

Tips to Improve Your Personal Finances

Consider these tips if you’re not already doing so in your household expenses:

  • Get out of debt sooner rather than later
  • Live on a frugal budget
  • Check your insurance plans to make sure you’re not overpaying
  • Buy homeowners or renters insurance so that you don’t have to pay out of pocket to replace damaged items if there’s a fire
  • Downsize to another apartment or home to help you achieve your financial and business goals

There are no guarantees in the freelance world for the source of your next paycheck, even if you’ve been hired over and over again to date by the same person or organization.

Trim Your Freelance Expenses

You may have to invest in a few top technologies to deliver the best products and services to your clients, but freelance graphic designers sometimes go overboard. Buying the newest, latest gadget can be addicting for some, and you have to distinguish between what you need to remain competitive and what you want to have. Keeping your business profitable is at stake, so do what you can to trim your freelance expenses. If you must make capital investments, then look for other ways to trim your expenses.

Tips to Lower Your Freelance Expenses

Here are some ways that some freelance graphic designers use to lower expenses:

  • Change your cell phone and home phone plans to cheaper ones
  • Use the web and the library to research trends and learn how-to information
    instead of purchasing books
  • Bundle your services to pay a cheaper rate for your Internet service
  • Arrange web and phone meetings with current clients whenever possible instead of
    traveling to their site
  • Use free (with permission) graphics when possible, but don’t sacrifice quality work for it

It can be a tough balance between keeping costs down and delivering quality work that can lead to more sales. Even though it’s a challenge, the freelance graphic designers who find that balance are the ones who survive tough economies and end up with profitable businesses.

You may need to make an investment in personal and business financial software to improve your money management skills. Ask established freelance graphic designers for advice to help you figure out what system works best for you.

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