How to Build a Financial Runway and Scale Your Freelance Business
Scaling up your freelance business may seem like a daunting task but, at the same time, an exciting one too. Many freelancers often complain about the struggles they have to undergo when they had to scale-up their business. However, the truth is scaling any business can be a difficult journey. But, one must take the plunge at one point or another in order to grow.
Freelancing as an individual is always limited, and you can never earn to your full capacity. On the other hand, if you convert it into a business, there so many new opportunities for you to un-tap. Our article today will help you build a financial runway and scale your freelance business in no time!
Building a Financial Runway
The biggest issue for freelancers is that they are uncertain about their next month's income, or they are not sure whether they will make the same as they have been making. This uncertainty makes freelancing extremely vulnerable, and one quickly forgets the benefits of this form of work structure.
But what if we told you that one could easily build a financial runway and manage their cash flow cycle without an issue. A financial runway is to half a certain amount in your bank at any given time. Let's try to understand this better with an example.
Suppose you have a carpet cleaning business, and you get a big order that you have to complete within a specific time period. You will need money in your bank account if you need to outsource people, machinery, and other equipment to complete this project. If you don't have this money, you might not be able to take that order and eventually never become able enough to actually scale up your business.
To avoid this problem, freelancers need to have a sustainable source of income, so they are not as vulnerable to market volatility.
How to Scale your Freelance Business?
Since you are not aware of the importance of building a financial runway, let's move towards the main part of the article, which is a guide to scaling your freelance business. Below are a few ways to help you do so.
1. Develop Other Income Streams
It goes without saying that building other streams of income is essential if you are looking for stability. This is also a bitter lesson that coronavirus taught us. Unless you don't have several streams of income, you are more or less vulnerable. Another thing that freelancers need to wary of is that their forms of income shouldn't be time-consuming, meaning they should earn money without having to give their time. Apart from freelancing, they can develop income streams from different small businesses that will help them in crucial times.
2. Hiring Freelancers
You can start off by hiring more freelance staff and take on a more managerial role where you are only managing the team and not working yourself. The thing about freelance professionals is that they are flexible, and they can work according to your company rules. Hiring freelancers is not that resource extensive either.
Companies save time and resources upon hiring freelancers, and they get the job done too. If you are not looking for long-term employees as you are unsure about the consistency of projects you will be getting hen hiring freelancers is a great option.
Nowadays, there are freelance markets on social platforms that help make the hiring process even smoother. You get a pre-vetted pool of talent, and you can hand-pick the ones that you like the most! What is better than that?
3. Update Your Business Plan
Adaptability for freelancers is the key to success. If you are a small business owner or a freelancer, then keeping up with trends will take you a long way. One way to make your business adaptable to change is to constantly update your business structure.
Don't ever let your business plan catch the dust, keep updating it. You might need to improvise it periodically and revise the market strategies as your freelance business evolves. List down all your plans and analyze which ones would give you long-term and short-term gains.
4. Take Expert Advice
It is always helpful to have experts on board who can give you meaningful advice regarding your business scalability. Having a professional on board who can improve your business operations can be a blessing for your business operations. An expert will give direction to your freelance business, which will eventually help you avoid pitfalls.
Additionally, if you get advice that is tailored for your business needs, then you can proceed with confidence and assurance. Moreover, your business decisions will be more calculated and confident, which will eventually improve the growth process of your business.
5. Keep Your Budget in Check
Scaling your business might cause permanent damage to your finances, and it might become a little difficult to recover afterward. Therefore, keeping a strict budget is extremely important when you are trying to scale-up. Be vigilant of any extra costs and try to cut down on any unnecessary costs.
If the office space is becoming a burden, then you can make your employees work from home for a while. Also, if it is not possible for you to give employee benefits, then you may opt for hiring employees on a freelance basis. There are several other ways to limit your budget to help you scale without financially burdening yourself.
Scaling your freelance business may seem difficult at first, but once you learn to manage your finances and manage your team in a better way, it all starts to roll out perfectly. Moreover, if you need any kind of help, you should always approach expert opinions from professionals who have had years of experience in your field.
Once you have decided to scale-up, you should take your employees into confidence and make them understand the benefits of scaling up the business. You should also make them understand what scaling up means for them.
They might have to do extra hours or manage new team members or even train themselves for better software or tools. It all depends on the structure of the business. However, they should be aware of the change that they have to adapt to. Remember, having a strong and cooperative team can make the scaling-up process much easier and smoother!