How to Ensure Your Freelance Writing Company Has Enough Cashflow
OWNING YOUR OWN FREELANCE WRITING company can be a rewarding adventure to embark on. With that said, you will need to concern yourself with all the logistics, such as making sure the company has enough cashflow to operate smoothly. For many freelance writing companies, this can be tricky to say the least, which is exactly why we’ve put together some tips to help you. The goal is to have your company operate without interruption, providing your clients with the services they want and expect.
Follow the Basic Rule
First things first: in order to ensure you have adequate cashflow, it’s a good idea to follow the golden rule of business. That is that you want more cash (revenue) coming in than you are spending in expenses. This is your positive cashflow. Of course, this can be easier said than done at times, especially if you are going through a slow period client-wise.
If you start to approach negative cashflow, which means your expenses total more than your revenue, it’s time to take quick action.
Monitor Your Cashflow at All Times
Now that you understand how to achieve positive cashflow and how vital it is, it’s also important to start monitoring your cashflow. How will you be able to tell if you are approaching negative numbers unless you are keeping careful track?
Where cashflow is concerned, it’s never wise to guess or make assumptions about where you stand. You need to be able to view all your accounts receivable and your accounts payable at any given time. As well, you need to be aware of your current business account bank balance.
Look into Funding Options and Expenses
Even with the best monitoring and intentions, a company can still run into negative cashflow problems, so the question is what to do about it. One option is to look into funding sources that can provide you with instant cashflow. This allows you to focus on the other aspects of your business without having to worry about where you plan to come up with the operating cash.
You also want to look into your expenses and whether you really need to be spending for everything. Do you really need a professional website built in the early days, or would reading some Shopify reviews and building your own e-commerce store to start be a better option? Maybe you don’t even need an e-commerce store for selling your content and can operate purely through platforms like Upwork and Constant Content.
Don’t Delay with Billing/Invoicing
Another tip is to make sure that you send bills/invoices out immediately after the work has been performed. You may be experiencing cashflow problems simply because you have fallen behind on billing. It’s a good idea to set aside time each day or week (whichever applies) to dedicate to billing.
Find More Clients
Of course, you can always take the approach of earning more money in order to increase your cashflow. This can take time, effort and even advertising/marketing expenses in order to secure new clients. Ideally you want to find clients that will have repeat business with you so you don’t just secure your cashflow now, but also in the future.
Besides securing new clients, you may also want to re-examine your rates. Are they still reasonable? Perhaps you could raise them and still be in line with other freelance writers. Just be careful not to raise your rates if it then ends up pricing you way above the competition.
Don’t Miss Bill Payments
When you are experiencing times of low cashflow, the last thing you want to do is incur additional unnecessary expenses. Paying a bill late can result in a late fee, and these add up over time. This is exactly why it pays to look after your accounts payable before they are overdue. Some places even offer a discount if you pay your bill early, which is something you will want to try to take advantage of.
Organized and meticulous accounts payable records are imperative to making sure you pay your bills on time, so don’t miss any, and even worse, don’t end up paying the same bill twice by a mistake.
Turn Your Cashflow Woes Around
Preventing a negative cashflow issue from occurring is clearly the best advice. However, when the unforeseen does happen, it’s good to know there are steps you can take to turn the cashflow situation around, and make it positive once again.