Tag Archives: revenue

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Fight Back Against Recession

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Economists and other thought leaders predict that 2023 will be a recession year and if the prediction holds, many Freelancers will see a decrease in sales revenues. Diminished revenue has the potential to bring on many unpleasant outcomes, among them the imperative to reconfigure how you can best allocate your shrinking funds. Belt-tightening isn’t fun, but do it right and you might survive or even, eventually, thrive. Take these three actions:

  1. Defend cash reserves
  2. Identify most profitable business activities
  3. Guarantee the optimal delivery of products and services

Conserve cash

You may not have a large amount of cash on hand in your business, but make a point to locate where you might find revenue that hasn’t been tapped. The first place Freelancers should investigate is the Accounts Receivable file. Rethink your strategy to collect unpaid AR and better still, start planning for AR when discussing the agreement with clients you’re about to work with. Request up-front money before you start project work on jobs that bill for less than $100—10% – 20% in advance is reasonable. Second, tie interim payments to project milestones where possible. Institute policies to avoid leaving more than 50% of the fee payable when project deliverables are handed over. The best defense is a good offense.

In the present tense, identify outstanding invoices and tactfully, persistently, pursue payment. Follow-up with clients who might be struggling to pay invoices and negotiate a payment plan if possible. Do whatever you can to ensure that all money owed to you will be paid as soon as possible (FYI, I’m negotiating right now with a client who should have no problem paying, but is 60 days late). Bring in the money and hold on to it—spend only on activities with demonstrated potential to increase revenue.

Double down on money makers

Going into a recession is a great time to do an audit and verify the most profitable parts of your business. When the economy becomes favorable again, you’ll be even better set up for success. Once you’re sure of the money-makers, do what you can to expand billable hours of those assignments. If you can scrape together a marketing budget, here is where you spend.

Marketing sometimes seems counterintuitive when you have less available revenue but in most cases, you can’t make money unless you spend money. What you must do is limit spending to activities that positively impact revenue generation. It could be that you buy a software program that makes it faster to generate and send client invoices. You might also invest in making credit card payments available and thereby make it easier for clients who can’t afford to write you a check can nevertheless use credit to pay your outstanding invoice.

There are also the more immediately recognizable marketing activities, among them selectively attending meetings and conferences where you might encounter prospects who may become clients and advertising, print or on-line, in publications that are read and respected by your target audience for your rainmaking projects.

All about deliverables, client retention, referrals

Happy customers create more business. Repeat and referral business is extremely important in a recession. Ensuring that your clients are happy is vital in any economy but especially in a recession. Creating glowing online reviews, testimonials and good word-of-mouth are essential to growing your revenue when times are tough (and even when there’s lots of money rolling around).

Sometimes when the economy changes, so do your client’s needs. Extract this opportunity, hidden in adversity, to learn more about your clients and what they feel they need now to ensure the survival of their organizations. Now is the time to talk to your clients and discover any changes in what they consider the pain points and priorities. Once again, it will be demonstrated that when you are attuned to the needs of your clients that knowledge can lead to more more active clients, more referrals and more revenue and profit.

Thanks for reading,

Kim

Image: © Keystone/Hulton Archive/Getty Images. Protesting the rise of food prices in 1973.

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Course Correction: Tacking Through Headwinds

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When you decide to become a Freelance consultant or business owner, your mission is to build and launch a successful and sustainable entity. To that end, there will be Important Things you must do very well and a corresponding list of Big Mistakes you must avoid and summarily correct if you fall into the trap. Our old friend the SWOT Analysis (Strengths, Weaknesses, Opportunities & Threats) reminds us that when leading a venture there’s always something to analyze, fix, capitalize on, or avoid. Below is a list of usual suspects that can tank a business. Be on guard!

Failure to understand the customer

Apologies for hammering this topic in nearly every post, but it’s impossible to overstate the fact. If you plan to become self-employed or open a business (and you must make a plan, even if it’s an outline scrawled on a cocktail napkin), you must be assured that you:

1). Have an accurate description and understanding of the customer segments you expect to buy from you and

2). Verify that your choice of prospective customers has a need, if not compelling reasons, to buy your product or service at a volume that will sustain your venture. In short, you’ll need a critical mass of paying customers.

Failure to research the marketplace

First thing you do is research the chosen industry and confirm that your sector is on an upward slope because under no circumstances do you want to enter a shrinking market. Also, search for announcements of new products and services that will soon be released, to verify that a competitor will not make your product or service obsolete. Furthermore, search for updates that may reveal potential new customer groups for you, or shifting demand for current products and services. In other words, customer loyalty can wax or wane, new iterations and uses of what’s available can develop and nothing is static and forever.

Failure to choose a good business model

Create your roadmap for customer acquisition and achieving profitability. Included in your assessment will be how you’ll source, create and bring your goods or services to customers. Decide also the payment methods you’ll accept and when payment will be made (billing after the product or service has been delivered to the customer or payment when the goods are ordered?).

Failure to develop a coherent marketing strategy

It will be tremendously helpful to create a multi-prong marketing strategy in which you’ll outline basic promotional goals for what you’re selling—-sales/marketing funnel, newsletter, blog, social media, branding, PR, website messages. All paths must travel in the same direction. All elements , text and images, must advance and support the same story.

Failure to create an effective customer acquisition and retention strategy

Identifying the customer groups that you’ve confirmed are a natural fit for your products and services is only half the story (sorry!). You then need a plan to reach out to them— that’s what your marketing and brand appeal exist to do. The value of your products and services, plus the efficiency of how you deliver to the customer, along with your diligent quality control, customer service and post-sale support impact customer retention and referrals.

Failure to anticipate required cash-flow

Posts on March 15 and April 19 addressed pricing and cash-flow, as regular readers will recall. The objective is to lay the groundwork for generating sufficient revenue to pay expenses, pay employees, pay yourself and reinvest in the business. Timing is everything and money must be available when you need it most. If there are gaps, corrective action should be taken immediately.

If invoicing is how you generate revenue, take steps to invoice on time. Insert on every invoice a polite phrase to indicate that payment is due upon its receipt. Give yourself an infusion of cash by asking for 15-20 % up front on projects where you anticipate billing $1000 or more. Worse case scenario, you’ll have to take an under-the radar unglamorous part-time job or get lucky and score an adjunct teaching gig at a local college or business incubator (BTW, I’ve done all of the above).

Failure to price appropriately

Pricing is an integral component of the marketing strategy but it often gets treated as an afterthought. Your revenue projections will underperform if you don’t price appropriately. Prices must support profitability as well as be perceived as reasonable to prospective customers. They must reflect your brand, whether luxury/premium, mid-market or discount. Think carefully about the message that your prices send to prospective customers.

Thanks for reading,

Kim

Photograph: On the rocks, aftermath of a nor’easter at Lewis Wharf in Boston Harbor, October 17, 2019

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Is It Time for a Price Increase?

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We’re here to talk about pricing today, a favorite subject of mine, but I admit the process is tricky. Pricing is more important than you might think because if you don’t get it right you either won’t sell much, because prospects and customers feel you’re too expensive, or you’ll sell but won’t make as much money as you could, because you’ve priced too low. Pricing B2B services can be a challenge. You can’t walk into a couple of stores or check on line and comparison shop your competitors, so competition-based pricing doesn’t work. Value-based pricing is the best option for B2B services.

So that you can at least maintain, if not increase, profitability in these unstable times, business leaders and owners would be wise to evaluate the pricing of their products and services and make adjustments when necessary. Revenue and profit are tied to more than sales volume. The most important driver of sales revenue, after ensuring that production or acquisition costs are covered by the price, is the value that clients assign to your products and services. I suppose that’s another compelling reason why B2B services are most successfully priced according to the value and ROI they bring to your customers.

Conducting basic market research will help you discover or confirm the purpose, must-haves, priorities and ROI that drive the confidence in and sales of your products and services. As usual, knowing the customer means everything. Whether you get them on the phone or take them out to lunch, speak to three or four of your best clients to determine which outcomes and benefits, tangible and intangible, matter most. You want to obtain insight into how your products or services bring ROI to clients. Once you understand what your offerings enable clients to do, align your price with the value they bring. Furthermore, include in your marketing messages those benefits that clients with whom you’ve spoken indicated are the most highly prized.

When announcing price increases, it may be useful to explain your increased costs and how long it’s been since your prices have been adjusted. Don’t shy away from highlighting how much your clients have raised their prices. For clients who may be struggling, consider “grandfathering” to continue the pricing for the product or service they buy most often. You could also soften the blow of price increases by designing product and service options to accommodate price-sensitive clients. No-frills, economy versions of your offerings may be welcomed by some. Consider also indirect price increases, such as adding surcharges for expedited shipping, longer payment terms, rush orders and for performing small projects.

Charging one price for your products and services is, in fact, limiting for both you and your clients. The buying decision may be simpler, but it leaves no room for clients to upgrade and you to bring in additional revenue from upselling.

Thanks for reading,

Kim

Image: The banker from the board game Monopoly ™, which was patented by Parker Brothers in 1935.

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Talking Tax Year 2021

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The new year is just one month old and it’s already time to think about filing taxes. Ugh! Then again business owners, including Freelance consultants, must usually file quarterly taxes so we often have our minds on the subject. As we know, planning is key (for all of life and business!) and the purpose of this post is to support your tax planning.

Let’s start with the question of whether or not you’ll file a 2021 tax return. If any one client paid you at least $400 in total during the year, you must file a tax return. Why is $400 the filing trigger point and not $600, the well-known earnings threshold for paying income tax?Because Freelancers are required to pay self-employment taxes in addition to regular income tax on the revenue you generate (minus business expenses and a few other deductions). While you may not owe income tax on the $500 project you billed, you’ll pay self-employment taxes on that amount.

The Internal Revenue Service compels Freelancers to file taxes like a business owner. In addition to the standard income tax based on your tax bracket and filing status, you are obliged to pay the self-employment tax of 15.3%, which constitutes the Social Security and Medicare taxes that everyone who works must pay, and also pay the half that’s covered by a traditional employer (this requirement does not apply to Freelancers who have U. S. clients but are not U.S. citizens and do not reside in the U.S.).

Clients pay to you the entire amount of the agreed-upon project fee and do not withhold taxes. Total earnings received from each client are reported on a Form 1099-NEC that is sent to you by each client no later than January 31. Freelancers pay the self-employment tax directly to the IRS, on your own.

Now you probably have business expenses to factor into your revenue earned, so if you’re a part-time, occasional Freelance moonlighter, you might not owe either income or self-employment taxes. File Schedule C or Schedule C-EZ to calculate and report business expenses to your state’s Department of Revenue and the IRS.

Freelancers and other business owners who expect to owe $1000 in taxes in a given year must also pay an estimated quarterly tax because, again, no portion of Freelance income is withheld by clients and applied to taxes that are presumably due. IRS Form 1040-ES will help you calculate how much you’ll owe in estimated taxes each quarter. It’s beneficial to you when your estimated quarterly tax is close to reality because if you underpay, you’ll owe the IRS the remaining balance when you file the annual tax return (by April 15). Habitual underpayment of quarterly taxes can cause you to be penalized and compelled to pay a fine, along with taxes owed.

Finally, heads up if you use services such as PayPal or Square to accept invoice or other client payments. Be advised that new tax reporting changes affecting these platforms are now in effect. A new tax ruling gives the IRS information on income that Freelancers and other small businesses proprietors receive via transactions on payment applications.

As of January 1, 2022, businesses that receive payment of $600 or more per year for goods and services purchased through payment apps such as Venmo, Square, PayPal and Cash App will receive Form 1099-K so that the IRS can be assured that you will include those payments in your taxable revenue. In an effort to reduce the amount of unreported taxable income flowing through these payment platforms, the IRS now requires payment app businesses to report on Form 1099-K each of their user’s business transactions (defined as a payment for a good or service). The threshold for reporting was previously 200 transactions per year amounting to a combined total gross payments of at least $20,000.

By lowering the reporting threshold, peer-to-peer payment applications must now report income if a user earns more than $600 from the sale of goods or services in one year. This change applies only to “income received from goods and services,” meaning it does not apply to gifts and other personal transactions, such as reimbursing friends and relatives for rent, dinner, or other social expenses.

If you use payment apps for non-business transactions and you receive a 1099–K. from one of these platforms, examine it carefully and be prepared to clarify your activities with the IRS. There may be a chance that some of your transactions will be reported twice or somehow inaccurately, since these reporting requirements are new. Check carefully the 1099–Ks you receive from your payment apps as well as the statements you receive from clients who use the apps to pay you. Again, be prepared to explain to the IRS that the two 1099-Ks are for the same transaction.

Let’s finish up with a peek at important 2022 tax filing dates to remember:

· January 31, 2022 – Deadline for clients to send Form 1099–NEC to Freelance consultants

· March 15, 2022 – Deadline for partnership tax returns (and LLCs taxed as a partnership) and S-corporation tax returns

· April 18, 2022 – Deadline for 2022 Q1 estimated tax payments. It’s also the deadline for C-corporation, sole proprietor (businesses you report on a schedule C) and individual tax returns. If you file an extension for the deadline, the Individual Tax Return Extension Form is due on April 18.

· June 15, 2022 – Deadline for 2022 Q2 estimated tax payments

· September 15, 2022 – Deadline for 2022 Q3 estimated tax payments

· October 17, 2022 – Deadline for 2021 individual tax returns that received a filing extension

. January 15, 2023 – Deadline for 2022 Q4 estimated tax payments

Thanks for reading,

Kim

Image: Mohamed El Korchi as Matthew, a tax collector who, after a monumental pivot and rebrand, would go on to become a saint, in the Lumo Project, an educational resource designed for anyone interested in the Bible’s four books of the Gospel.

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New Year’s Resolutions for 2022

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Happy New Year! I’m psyched to welcome you to 2022 and thank you for stopping by to read. There can be no party without you and together, we are going to make this a very good year. Because we’re at the top of the year, capodanno, as the Italians so eloquently say, I’ve decided to revive my New Year’s Resolutions tradition, something I haven’t done since January 2019. Considering what the entire world has been slogging through since 2020, you may appreciate some inspiration to get yourself in racing form.

Join a business group

Freelancers and other business leaders need community. It can be lonely at the top. You need a way to meet and interact with peers, whether or not they become your besties. Business organizations and professional associations provide forums where Freelancers and (small or mid-size) business owners can talk to colleagues who understand your challenges and motivations. Along the way, you’ll build personal connections and you may also find your way to business opportunities.

If you’re not sure where to start, visit the website of your local chamber of commerce; the chambers are great resources for B2B, B2C and B2G facing business owners and leaders. Another useful organization is The Freelancers Union, an online national group that is a good resource for all types of information, from professional development workshops designed for self-employed professionals to medical, dental and other types of insurance coverage. https://www.freelancersunion.org/

Analyze your website and social media data

Fully leveraging the potential of the digital presence of your company is unquestionably a must. Whether selling to B2B, B2C, or B2G clients, the winners are those who are guided by actionable data when making decisions and developing business strategies. If you haven’t done so already investigate Google Analytics, a free and powerful online tool that helps you discover the right approach to the customer journey and customer experience that your company offers, supplies e-commerce, call-to-action and landing page insights, plus more. https://analytics.withgoogle.com/?utm_source=google-growth&utm_medium=cpc&utm_campaign=2019-q4-amer-all-gafree-analytics&utm_content=analytics&gclid=EAIaIQobChMIsILp4eCW9QIVDovICh2FKAT0EAAYASAAEgJPJPD_BwE&gclsrc=aw.ds
If you can budget about $25-$50/month, invest in a social media analytics service such as Zoho Social, Hootsuite, Buffer Analyze, or HubSpot to further enhance and refine your strategies and campaigns and measure ROI.

Become a better leader

There are multiple paths that one might take to developing and enhancing leadership skills and it can begin with reading. Reading one or more leadership themed books each year will open your mind and make you rethink your usual approaches to problem-solving, decision-making, negotiation and communication, for example. I’m a regular reader of the Corner Office column that appears in the Sunday New York Times.

You may be inspired by this tale of entrepreneurship The Unfair Advantage (2020) by Ash Ali and Hasan Kubba https://www.goodreads.com/en/book/show/50714359-the-unfair-advantage

You may be shocked but intrigued by this tale of commodities trading The World for Sale: Money, Power and the Traders (2020) by Javier Blas and Jack Farchy. https://www.goodreads.com/en/book/show/52199304-the-world-for-sale

When you join a business or professional group, you’re also likely to be introduced to leadership roles in the group (on the membership committee, for example). The chambers and also Rotary Clubs can introduce you to local not- for-profit organization leaders, who can show you how you might contribute your time and talent to a philanthropic cause that resonates and further expand your network, enhance your brand and maybe add to your skill set as well.

Prioritize revenue generating activities

Decide which of your revenue-generating activities could pay off if you plan well— then follow through and execute! Depending on your business and target clients, it could be email marketing outreach to potential prospects, attending certain conferences or trade shows, sending hard copy direct mail appeals, or running FaceBook ads. Once you know what your revenue-generating strategy will be, calculate about how much time you’ll need each week or month to gain traction and meet your financial goal. Then, get to work.

Communicate with clients

Staying in contact with clients throughout the year is good business, even when you reach out to those you haven’t worked with for a few years. Through your outreach, you remind clients past and present that 1.) you’re still in business and 2.) you may be able to help them with achieve a goal or solve a problem. A few years ago, a study by the uber-consulting firm Bain & Company confirmed what decades of anecdotal evidence shows —- that it’s easier to keep an existing customer than to find a new one.

So send a copy of your newsletter, blog, case study or white paper to clients, attached to a quick and friendly email that mentions a couple of reasons why they’ll find the read worthwhile. Also update clients when you give a talk, moderate a panel, or appear on a podcast. Pick up the phone and invite your most important clients to lunch.

Delegate or outsource

Delegating, or outsourcing if you work alone or with a small team, is essential for you to be able to have time to yourself and think about how to find innovative ways to expand your business. If you want your business to thrive and grow, you need to start trusting the people on your team, or identify other talented and trustworthy Freelancers, to take over certain tasks.

Upgrade your skills

The world keeps turning, expectations evolve and what we need to know to maintain the trust and respect of current and future clients shifts with the times, along with how we package and deliver the services we offer. What expertise do you need to own to better reach or more effectively serve your clients? What do you need to know to more efficiently run your business?

Help yourself to figure things out by reading articles that address your industry and niche within it—-what new technologies are gaining traction or what are new uses of existing technologies? What are the thought leaders in your industry and niche predicting? What are your clients doing to position themselves for future demands?

With that information in hand, you’ll understand how to upgrade your skill set. Maybe you’ll finally become truly proficient in using Excel, or learn to become more comfortable giving virtual presentations.

Nurture your health

Unless you’re up against a big project deadline, structure your time to allow yourself to have a day or two off once a week. Burnout is bad for business. Allow yourself to sleep the number of hours your body needs (adults usually need 7-9 hours daily). Eat a balanced diet that contains the basic food groups. Give yourself a daily intake of water that approximately equals one-half of your body weight in ounces. Participate in moderate to vigorous exercise at least three hours each week. Maintain your social connections by staying in touch with friends and family.

Thanks for reading,

Kim

Image: © William Stephen. Thoroughbreds racing at the Saratoga Race Course in Saratoga Springs, NY

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Cash-Flow Cures

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Cash-flow is the beating heart of every for-profit (and also not-for-profit) enterprise and it is imperative that business owners keep a finger on the pulse of revenues that flow in and expenses that flow out of the coffers and constantly monitor the venture’s fiscal health. Your ability to pay recurring bills, invest in the business and maintain operations depend on it.

There are several Key Performance Indicator metrics that reveal the strength (or weakness) of aspects of the business—the number of active clients, the number of subscribers to your blog and/or newsletter, the conversion rate of sales leads and the percentage of clients who give you repeat business, for example, and each tells an important story. But in the end it’s about the money, how much comes into the business (accounts receivable and whatever additional income) and how much goes out (accounts payable, plus interest payments and taxes).

Follow your cash-flow

If you send only a few invoices each month and generate them yourself, why not create an Excel spreadsheet and enter your receivables and payables data there, at no charge? You can monitor invoices (accounts receivable) and update as payments are received. Each month, you can easily calculate revenue. Monthly bank and credit card statements, PayPal emails and updates from online payments, made or received, will verify your accounts payable activity and confirm receiveables that are paid.

You can record it all in Excel (and label it your Profit & Lost Statement) and understand whether you’re making money, breaking even, or losing money when you view the bottom line. With that knowledge, you can create strategies to capitalize on your financial situation or correct it.

If you’d rather pay for an invoicing and accounting service, there are several good options available, including Fresh Books, HoneyBook, Invoice2Go, Oracle’s NetSuite, QuickBooks, VCita, ZarMoney and Zoho Books. The platforms make it easier to send invoices, reconcile accounts, generate reports , track time spent on project work and more.

Evaluate expenses

Examine your company’s recurring monthly, quarterly, or annual expenses. Can you trim the cost of utilities, renegotiate commercial space rent or insurance payments? Why not terminate premium services or other subscriptions that don’t deliver as you anticipated? Ditto for organization memberships that you can’t find the time to utilize.

The work from home phenomenon should help you lower your rent for office or other commercial space. If your landlord balks at dropping the price, consider asking for more space, if you’ll find it helpful, or ask for perks such as a discounted maintenance fee.

If you have a history of paying bills on time, call your insurance, credit card and loan companies and ask for a lower interest or premium rate.

Demand a deposit

When a project fee reaches a mid 4-figure sum, request a 10% – 20% up-front payment at the contract signing. Link subsequent payments to the completion of project milestones. Aim to leave no more than 25% of the fee payable at project completion. In other words, help your monthly cash-flow and revenue by scheduling most payments before the client has what s/he wants. If the client is unethical and “forgets” to make the final payment, you’ll have most of the money in your pocket.

Invoice on time

The thing about being a Freelance consultant is that unless you are a big-league player, invoicing, proposal preparation and other administrative tasks are done on your time. Remember that when negotiating project fees and try to roll it in.

I find invoicing to be a chore, but that’s how I get paid. Within two weeks of the completion of whatever client work you’ve done, train yourself to invoice. On your invoice, state that payment is due upon its receipt.

No-problem payments

If you sell products or provide services at your clients’ homes or offices, enable on-the-spot invoice payments with mobile apps that use your smartphone or tablet to accept credit or debit cards. Investigate mobile payment platforms such as Helcim, Payment Depot, Square, Stax and Stripe.

Credit cushion

A business line of credit is a good insurance policy against cash-flow droughts. Talk to the manager at your bank and s/he will be happy to discuss options with you. Most likely, you’ll receive a business credit card, which will be very helpful as you track business expenses, whether you take a prospect out to breakfast, attend a professional development or networking event, or buy a new computer.

As well, if your credit score is good you may be able to more quickly collect receivables from good clients who are, unfortunately, slow payers, by applying for a NOWaccount. Both your company and the client’s company must be approved. You invoice the client as usual and NOWaccount pays you within 30 days, minus a fee. Client checks are made out to you, but mailed to a post office box belonging to NOWaccount. If you have a good client who is a 60 + day payer, you can be well-served with this option.

Thanks for reading,

Kim

Image: Leonardo DiCaprio in Catch Me if You Can (2002) directed by Stephen Spielberg

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2021 Financial Tune-up

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We’re at the top of the year, after closing out a particularly trying nine months of the previous. It seems that rough sailing will continue but we know what to expect now, more or less, and our experiences will enable us to brainstorm and identify strategies to help ride out the storm.

Whatever you’d like to achieve this year, money is likely to be necessary. In fact managing money may be the singular focus of your plan for the new year. For example, a practical goal for your business enterprise may be to conserve cash as a risk management strategy as the pandemic economy grinds on and on. Alternatively, saving money that will make it possible to take aim at your personal bucket list, which may include buying a home or trading up, or becoming more diligent about retirement savings, are or her motivators for managing and saving money.

Create a budget

The ultimate money-tracking and management tool is the budget. A budget accounts for anticipated revenue, which Freelancers are advised to conservatively estimate, and balances that amount against expenses that will be due, be they predetermined obligations such as rent or mortgage, transportation and groceries or discretionary expenses, such as new clothing purchases.

It’s also necessary to factor into your budget room for mundane expenses such as routine or emergency auto maintenance, technology needs and occasional home repairs and accessories, as well as allowances for fun expenses such as holiday and birthday gifts, occasional dinners out, or a weekend trip.

If one is both prudent and fortunate, revenue will exceed expenses most of the time and you’ll be able to save a few dollars every month. So budgeting should not be viewed as punishment; to the contrary, your budget is your friend. Why wouldn’t you want to know how much money you can expect to earn in a month or quarter and compare that amount to the typical expenses you expect to pay in that time period?

We all need to keep close tabs on cash-flow. The idea is to make money and avoid deficit spending. Budgets can be monthly, quarterly, or annual but a personal budget probably works best on a monthly cycle.

Get started by finding your 1099s and adding them up to identify the previous year’s gross revenue. Because 2020 was a year of diminished revenue for most Freelancers and we don’t know how much of a bounce forward 2021 will bring, income averaging 2019 and 2020 revenue could be a reasonable predictor of 2021. If you have dividend paying investments or interest bearing accounts that actually amount to something, be sure to include that income as well. Who knows, maybe you have a modest trust fund to include as well (it must be nice!).

Next, document 2020 expenses. Consult credit card statements, ATM withdrawals, mobile payment apps and checking account statements. Be honest with yourself about all the little ways that you spent money, from impulse purchases in the grocery store check-out line to chocolate therapy ice cream emergencies.

You will soon need to consider how to format your budget. Some will like an Excel spreadsheet and others will download a budgeting app such as what’s shown here. https://www.nerdwallet.com/blog/finance/budgeting-saving-tools/ I find The Balance website to be very helpful. https://www.thebalance.com/how-to-make-a-budget-1289587

Watch your caffeine

In life, so often it’s the little things that matter. Small expenses can easily add up to a bigger drain on your income than you realize. In other words, beware the $5.00 caffeine drinks. The most frugal option is to buy a good coffee maker or tea kettle + accessories and make your own brew. However, if stepping out for a break helps you to be a more effective work from home professional, find a local restaurant to visit. You may be able to save money as you have the pleasure of supporting a local business.

Monitor other expenditures as well. Not all of your small but life-enhancing pleasures will have to end, but making note of their impact on your finances may change your mind about a few things. If possible, maintain a couple of indulgences that mean the most and let the rest go.

Pay on time

Late fees for many bills are $25.00 or more and some companies consider them to be a line of business. You don’t want to go there. Late paying clients can force a Freelancer into that trap and I’ve been there. Help yourself by invoicing on time and finding the courage to send a gently worded reminder email to collect unpaid receivables that are approaching 60 days.

Moreover, when discussing a project with a client, ask for 20% – 25% of the total fee before you commence work. Tie subsequent payments to successfully completed project milestones. Avoid leaving more than 30% due at the project’s completion and therefore leaving yourself vulnerable to an unscrupulous operator who decides not to pay the full amount, now that s/he has want they want.

Finally, you may notice that planning to save money may inspire you, Freelancer Friend, to become more ambitious and disciplined about keeping your sales pipeline filled, enacting client retention strategies and even devising a campaign pitch to move regular clients to retainer agreements. When you make a commitment to yourself to manage money, you’ll want to be able to predict, and ideally increase, your revenue in order to achieve the savings target.

Thanks for reading,

Kim


			

	


				
					


			

						
							
						
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Pandemic Sales Tactics
		
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The New World Order ushered in by the coronavirus has forced all Freelancers and business owners and leaders to learn to be resilient and to steward our organizations in ways that are forward-thinking and flexible. Selling the company’s products and services to generate revenue has taken on an even more central role.  There is heightened recognition that the roles of marketing, branding, public relations, advertising, networking and social media are to encourage sales, to attract qualified prospects and convert them to customers. 





Now that the COVID era is here, whatever your company previously did to promote sales must be adjusted to get in step with the new reality. As of this writing it appears that we won’t return to “business as usual” anytime soon, if ever.  Consider this the wake-up call to update the selling protocols at your organization and prepare to compete more effectively in today’s marketplace.





Selling is the purpose





As noted, it is no longer possible to put the components of a company’s sales process on automatic pilot. Nurturing the brand, revving up the social media presence, strategic networking, targeting of content marketing posts and the like are all relevant but bear in mind that those activities are the “way to the way.” The way a company survives is by making sales. The purpose of a company’s sales process is winning business and that function is the real-time measure of all your imaginatively conceived business strategies.





It’s vital that the sales team (that means you, Freelancer Friend and small business owner) the information and other resources needed to sell effectively, because there’s less business available now.





Start by learning what your clients fear and what they’re prioritizing,  in response to how COVID has impacted their organizations.  You have likely been in touch with your current clients at least once or twice since the shutdown and subsequent (partial) reopening but if you haven’t done so, send a New Year’s card and follow it up with an outreach themed phone call or email—you’re just checking in to see how the client is doing. How’s business? How are they managing? Listen well and empathize.





Deliver what customers value now 





Dive into the social media accounts of past, current and prospective clients to get intel on how they’re communicating with their customers and discover what is being promoted now. The goal is to obtain insights into as many specific reasons as possible that might incline clients and prospects to do business with your company rather than the competition. 





You want to understand the issues that may drive customer decisions. This is also your method to discover any obstacles that could potentially impact the use of your products and services, for better or worse. Remember that COVID has collapsed some industries and revitalized others.





Based on what your investigation shows, forecast the perhaps now revised client needs that your organization can address, what new (or ongoing) problems you can help clients resolve. Then, build a strategy to capitalize on what you’ve learned and repackage your offerings.





Map the new sales process 





Get used to it, your sale will most likely take place by videoconference. You’ll be at an advantage when sales calls are with clients you already know. When meeting with new prospects you’ll have to work a little harder, but that is always the case. Regardless, do yourself a favor and hire a videoconference tech for three hours to set up your call and monitor it in progress, and allow yourself to focus on how to use your platform’s technology to communicate and connect with your prospect and sell.





Consider presenting a (video) show and tell for a product sale or a pre-taped video testimonial featuring a happy client who’s had a good experience with the product or service you’ll discuss (client success story/ verbal case study). Call in a guest speaker on your team who is an expert on using the product (engineer or the product manager) to provide additional information, take questions and reassure the prospect. If selling a B2B service, a few slides that show the ROI would also help the sale. 





Perfect the sales experience 





If the prospect is working at the office, or if you happen to know his/ home address, why not add a flourish and have lunch or coffee and pastry simultaneously delivered to the prospect and yourself? You and your prospect can still enjoy a meal together, relax and begin to bond, even if remotely. Morning meetings could benefit when coffee + is delivered at the start, but lunchtime and other afternoon meetings will probably be best served when food is delivered at around the half way point.





Thoughtful planning that keeps the client at the center of the sales process will guide your organization to refocus its sales process in ways that benefit client expectations and the experience. Relationships and referrals that will set your venture on an upward trajectory begin here, with how you manage the sale.    





Thanks to all of you for reading my posts! YourHappy New Year,





Kim





Image: Actress Myrna Loy (R) sells cigarettes to actor William Powell (L) and his wife Diana Lewis at a 1940 Franco-British War Relief charity event held at the Cocoanut Grove supper club in Hollywood.

					

	


				
					


			

						
							
						
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Business Building Essentials
		
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While you’re thinking about how to give your business an injection of growth hormone, uniquely formulated to push your billable hours up and out of the doldrums, it’s also a good idea to reconsider some ground level business building essential practices that will confirm what you’re doing right and reveal what needs an edit. 





Business founders must perfect not only the functionality and value of the products or services that are sold, but also create the organizational structure that will launch and support those products or services. You, founder and owner of the company, must ensure that you have your arms around each of these six elements discussed here.  If ownership is shared by partners, then the responsibilities will be divided between you.





One division of labor method can be based on the percentage of the business owned, governed by abilities and preferences. Another method is to let ability and preference rule and choose a Managing Partner. That individual might own the largest share or the smallest share of the business, it doesn’t matter.





Managing Partners are compensated for the work they do, beyond the share of profit (or loss) that their ownership share entitles them to. Whether the business structure is Inc. or LLC, a W-2 salary can be paid to the Managing Partner. Discuss the matter of partner duties and compensation with your business attorney and put the agreement in writing.





 A third option for monitoring and managing these responsibilities is to hire a W-2 employee or a 1099 Freelance consultant. There is no shame in calling in outside experts.





Positive cash- flow





The responsibility for positive cash flow belongs to the Finance Department, but the Sales Department is responsible for generating the revenue that keeps the business solvent. The Finance expert will monitor Accounts Receivable and Payable and enable a healthy cash-flow. In addition to generating sales, invoicing on time is critical to  the process.





Operations





Inventory, quality control, managing employees and Freelancers, product manufacturing, delivery of core services, insurance and licenses and permits all land in this far- ranging category. IT, the telephone system and HVAC are other responsibilities that land in the Operations in- basket. 





Operations functions are the nuts and bolts, where the rubber hits the road, hands-on aspects of the business. Excellent organizational ability is the key factor in successful operations management. Ownership of these duties can be assigned to whomever is best qualified to handle them. Sharing of theses duties by the partners and/ or hiring outside experts to oversee specific sectors will be wise.





Metrics to measure 





The metrics used to measure business performance will change over time, but do some research of similar organizations and get insight into what numbers you should follow and the story they will tell, separately and together.





Plan to pivot





Doing business is so volatile now, it’s safe to say that a pivot is on your future, so why not anticipate it? Think about potential Plans B and C. Should your business venture falter, whether a flashy and well-funded competitor moves in or, gasp, you must contend with an unheard-of government mandated shutdown of your enterprise, how might your organization retool, pivot and survive?





You can help yourself by engaging and communicating with your customers to confirm why they buy from your company. You can also find out what competitive products and services may be appealing and why. In this way you can learn what you might adapt and hold on to customers should the business environment change. Staying abreast of new technologies on the horizon, new legislation, new competitors and even changes in local zoning 





Culture and values





Bake into your business practices integrity, the expectation of excellence, first-rate customer service and, when necessary, the willingness to admit that a mistake has been made and an apology and/or a do over is in order. Let your customers, partners, suppliers, vendors, employees, Freelancers and most of all yourself see your humanity and your humor, too.





Coaching and mentoring 





The founder(s), C-Suite leaders and staff deserve opportunities to sharpen their skills and even discover and nurture new competencies. Company sponsored professional development benefits a business in so many ways. Employees (and leaders) who feel confident about their skills and career possibilities and trajectories are nearly always happy to give back and do their best work.





Thanks for reading,





Kim





Photograph: Kim Clark. Construction site on Ipswich Street adjacent to Fenway Park.

					

	


				
					


			

						
							
						
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Leverage Your Brand and Make Money
		
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Hello Freelancer friend and thank you for coming back to continue our examination of how Freelancers who are just regular folks can leverage our know-how to generate a sufficient income in the 21st century knowledge economy.  For most, it is an uphill battle.


One very ambitious (and possibly overwhelming) monetization strategy is to write a business book that will either:


    

  1. tell your business creation story— how you overcame adversity and persevered until you prevailed, or breezed through every door and stumbled into lucrative assignments
    2. 

  2.  function as a how-to guide that details how the reader can become a more proficient and successful public speaker, financial manager, business strategist, Freelance consultant, or the like
    3. 



A business book is an evergreen PR tool and door opener.  Authors are often asked to give quotes to journalists and content producers, are more often invited to speak at business or professional association meetings, receive more adjunct teaching opportunities and are considered more qualified than non-authors by potential clients.


Podcasts are another promotional strategy, one that is more accessible than writing a book.  Ideally, podcasts will position a Freelancer to monetize his/her knowledge or skills and it’s not necessary to create a series that will attract thousands of listener downloads and a gaggle of advertisers.  For at least a handful of podcasters, several of their strategically selected guests have become clients.  However, in order to make that transition, one must be the host of the show and not merely a guest.


Yet, if one appears as a guest on enough podcast shows and moves up the food chain to appear on popular shows, it will be reasonable to apply that achievement to the pursuit of paid speaking engagements.  Preferably, speaker circuit bookers will find you, but it would nevertheless be worth your while to initiate contact.  You could possibly receive offers in the $250 – $750  per talk sector.  You won’t get rich, but you might create a modest revenue stream and enhance your ability to attract big-budget clients to your core business.  Along with your podcast appearances, become a panelist or moderator at conferences sponsored by neighborhood business associations, chambers of commerce, or professional associations, to hone your pubic speaking skills and enhance your presence and brand.


Finally, there is the growing popularity of creating and presenting online courses.  If you are an experienced teacher and comfortable in front of the video camera, you may want to brainstorm a course or two to create and present.  Essentially, this means you must identify a problem and then design a course to solve it.  Click the link and get information on how to  create your online course 


In closing, I don’t see much of a solid business model in the new economy brand and knowledge monetization game, I’m sorry to say, and maybe that’s why so many Freelancers are struggling.  As I see it, a business model is similar to the template for a franchise.  The template is not as precise as a mathematic formula, but given similar business conditions and customer demographics,  one can produce the desired outcome.  In other words, if you buy a CVS or Dunkin’ Donuts franchise, you will make money if the store has the right location and management.  Unfortunately, our fortunes in the 21st century knowledge economy are not so predictable.


Dorie Clark (no relation), author of Entrepreneurial You (2017) and frequent contributor to the Harvard Business Review, advises Freelance consultants to follow these steps to monetize our knowledge and brand:


    

  1. Cultivate an inner circle.  From this group, one receives feedback and  encouragement.  If some in your circle are well-connected, they may provide important client referrals and open other doors for you as well.
    2. 

  2. Build an audience.  This is how you launch your monetization strategy.  Announce the roll-out in your blog or newsletter, on your website and on social media and YouTube.  The goal is to become visible.
    3. 

  3. Build your community.  As your audience grows, you must encourage them to talk to each other and connect around your concept. The community will initially be nurtured online, probably through Facebook and Twitter. Eventually, you will solidify your community support with ticketed face-to-face gatherings where you are the featured speaker.
    4. 

  4. Build trust.  Your community has to trust and respect you.  Continue to create content that they find relevant and be careful in what and how often you attempt to sell to them.
    5. 



Thanks for reading,


Kim


Image: Screenshot of Paul Masson Wines advertising campaign. Academy Award winning writer (Best Original Screenplay 1941, Citizen Kane), producer, director and actor Orson Welles was the Paul Masson Wines (of California) brand ambassador from 1978-1981.