Tips for a small business/freelancer?

June 15, 2009 11:05 AM

What are your best tips for a small business/entrepreneur/freelancer?

I’ve been running my freelance writing business for 6 months now. There have been lots of highs and lows as I try to find clients, but I am paying my bills and am earning 2/3 of the pay I earned at my full-time job – I also have larger jobs/clients lined up (although I won’t count on any of this until I see a contract, but whatever). I’m also happy with the progress because I am finally getting projects that I want.

However, I know I have the potential to do much better, but I need to learn more about running a business.

So this is the part where I try to tap the hive mind.

For those of you who run/ran a small business or worked as a freelancer, what helped you turn your business around or improve significantly? Your resource can be a book, blog, organization, or just tips/lessons learned.

In addition to the financial aspect, were you able to get a great project/learn something new/”have multiple streams of income”, and if so, how did you get to that point? I guess what I am suggesting is that success of a business is more than just $ to me, and I would like to know how others got to that point. In other words, if there is down time, is there a way it could best be spent to improve the business (besides looking for more clients).

Just curious and hoping the hive mind can once again be a useful resource for me

posted by Wolfster to work & money (5 comments total)

My biggest tip would be: Focus. Focus on being the best you can possibly be at one thing.

Think of all your heroes, in any walk of life. With incredibly few exceptions, I bet all of them do one thing brilliantly.

It's tempting to try to generate multiple income streams, usually justified as a hedge against risk, or to do different things to stay fresh but it is a mistake. These are all distractions from the main event. Do not fall into this trap.

If you are the best you can be (and the fact you are doing pretty well so far suggests you are at least pretty good at what you do), business will be there for you to pick up. It's the mediocre ones who have the most to fear from a downturn.

Beyond that one tip, I would suggest you learn basic book-keeping and business management skills - there are usually good adult education courses at most community colleges for this. You don't need to be an expert (see above), but you ought to learn enough to be able to ask sensible questions of a client, an interviewee, an accountant, a lawyer, a supplier and so forth.

Lastly, keep it simple. As Einstein said "Everything should be made as simple as possible, but not simpler". Complexity is almost always unnecessary and is often, not always, a result of fuzzy thinking. Don't do this. Read up on critical thinking to help you cut through the crap.

Good luck!!
posted by mooders at 11:45 AM on June 15 [1 favorite]

#1) Don't go it alone. SCORE, your local Chamber of Commerce, and a lot of other free resources exist to help you run and improve your business, by discovering and using best practices. But you've got to spend a bit of time up front with these resources, describing your needs/goals, as well as putting their reasonable suggestions into practice.

#2) Most successful businesses operate against a formal business plan, and a budgeting/financial reporting system. If you haven't taken time to commit your ideas about your business to paper in the form of such documents, do so. As you operate, you collect information about the reality of your performance, to compare to your plans. The differences between your actual achievements, and your plan, becomes either your corrective performance action, or your new, next period budgeting assumptions. Many solo practioners find that paying an accountant is valuable, not only for the tax work, but for the discipline it brings to the financial aspects of the business - having to explain things to your accountant, and hearing their feedback on your efforts can be a lot more helpful than doing your own QuickBooks.

#3) Marketing is anything you do to raise public awareness of your business and its value to the larger community. Seeking out 1 or 2 public speaking engagements a month is good way to bring your business to a live audience, and create follow up marketing or sales opportunities. Dozens of local organizations host regular programs, and are constantly on the lookout for presenters; you can usually work up a simple 5 to 10 minute talk about your freelance work, and "tune" it to the group you will address with a few changes to topical references. Sometimes, for a few bucks, you can "sponsor" refreshments at a service club meeting or similar affair, and be present to be recognized, without having a need to speak. Or, spend $200 to buy t-shirts and ball caps for a Pee Wee league team, and see your business name across the backs of a dozen six year olds!

#4) If you attend conventions, trade shows, or other industry events, throw a quick daily report to industry publications, newsletters, or video/audio producers/outlets. Media are hungry for fresh content, if you can find the right media.
posted by paulsc at 12:12 PM on June 15 [2 favorites]

"It's tempting to try to generate multiple income streams, usually justified as a hedge against risk, or to do different things to stay fresh but it is a mistake."

I would disagree with this. If you want your business to be a job with a limited income, then sell your time to clients and do nothing else. You'll get to a point at which you can't raise your rates any more, and the only way you can make more money is to work more hours. And if you get sick and need to take time off, there goes your income.

I provide writing-like services in a niche. After years of selling my time, I launched an information product in that same niche. I created it when my clients went into hiding in late 2008/early 2009. It's closely tied to my services, and even with almost zero marketing it provides $1300/month so far (into its fourth month now). Since the initial reaction has been good, I'll now market it for real.

So I would say that as you help clients solve problems, keep an eye open for problems that you could solve with a product of some sort--anything to break you out of the exchange of your time for their money. The product could be a membership site, ebook, or other cheap-to-produce item that reinforces your expertise, so it both brings in a passive income and gets you more clients.

The way I did it in a nutshell:

1. Work with local clients. Feel underpaid.

2. Decide national and international clients would be better.

3. Get a professionally designed site so you can charge more and work with pros.

4. Start a blog carefully aimed at the market you want to reach. Write 100% useful info that helps readers solve problems in your niche--no chitchat or lengthy musings. It apparently helps to be funny.

5. Build the blog's readership with good posts, comments on other blogs, and things like fun Slideshare presentations. Use the blog to drive people to the site where you describe your services (I do this through the About page, not in the posts).

6. Pay close attention to your market and what they seem to need. Brainstorm and research product ideas until you get one that sticks.

7. If possible, test your product with a subset of your market. I did this with a small, quiet launch.

At all times: Be able to say without pause what it costs you each month to run your business. Know exactly how much you need to make each month, and consider breaking it down to a daily goal. Set aside a percentage of every client check for your quarterly estimated taxes (I use 30% to cover feds and state; it goes to an interest-bearing online account until needed).

Now I can work anywhere that there's an internet connection, though sometimes it's best to be in a certain range of time zones. I turn down work that I don't want. The loss of some work in the financial sector was tough but the product helped see me through.

Inspiration: 4-Hour Work Week (not for the author's personality--more for the kick in the pants); Overcoming Underearning by Barbara Stanny (had a huge effect on me). Tools: Freshbooks, Quicken (blech but the best for me). I used an accountant for taxes until I learned to do it myself.

Good luck!
posted by PatoPata at 5:41 PM on June 15 [2 favorites]

-- Be willing to spend what seems like a lot of money to buy the best information technology for your line of work. As a self-employed attorney, I invested early in buying a very good practice management software program that seemed really expensive at the time. But it has paid for itself, big time.

-- Consider hiring an assistant to take care of administrative tasks, freeing you up to do what you do best.

-- If presented with the opportunity to do difficult or unusual jobs, price them accordingly. Some of my biggest headaches were complicated cases that I took early in my practice, for a small fee because I was embarrassed to ask for a big one. Because I undercharged the jobs, I ended up having to take on a lot of other work to pay bills, which slowed down my ability to finish the complicated case. Below-market fees do no favors to anyone, the client or the professional. It is smart to unashamedly quote high fees when high fees are merited. If the people can't afford (or don't want) to pay it, you don't want to deal with them anyway. And you'll be surprised at how often people WILL pay the high fee.

-- And mooders' advice is probably the most important: do one thing and do it well. It is a great feeling to walk into work every every day being a master of what you do. The jack-of-all-trades stumbles from one disaster, imbroglio, or fiasco to another, being master of nothing.
posted by jayder at 7:12 PM on June 16 [1 favorite]

I wanted to say thank you to everyone for their replies, all the responses were helpful in some way.

Also, thanks so much to PaulSc and PatoPata – very insightful, unique, and outside the box responses (eg, using SCORE, unique marketing ideas [sponsoring snacks or softball team), thinking of business solutions for the client and then selling these info products, using a really good webpage and blog). I’ve been perusing other websites and haven’t found anything this unique.

A daily monetary goal? So obvious but I never thought about it before. This is exactly why I am a business moron. I've completed the first half year of my business, and I hope that if I implement even one or two of these ideas that it will make a significant difference.

Thanks again to the MeFi have and the posters who took their time to reply.
posted by Wolfster at 4:59 PM on June 20