As you begin your journey within the freelance industry, you’ll find that one crucial aspect of managing a business is having an organized financial strategy. In order to create a plan that is best for your freelance career, you should start by setting goals for yourself that aid the growth of your business to its fullest potential.
In order to get your career in freelancing on a path towards success, follow these steps to best determine the financial goals you should be setting for your business.
1. Set SMART Goals
One of the cardinal rules of goal setting is to stick to the SMART method. Establishing SMART goals is known as a tried-and-true way of creating realistic and achievable tasks. What does SMART stand for?
- Specific: Avoid vague goals. Set clear expectations for yourself and what you want to accomplish.
- Measurable: Any goal you set should be something you can track your progress towards quantitatively.
- Attainable: Be realistic, don’t create goals that would be impossible to achieve in one go.
- Relevant: Make sure your goals are something relevant to your business.
- Time-based: Set specific deadlines and timeframes for when you want your goal to be completed.
The method is designed to help you think critically about what goals are really going to be valuable for your freelance business, and how realistic they will be to achieve. By sticking to this foundation when setting your goals, you’re more likely to complete them.
A good example of a financial SMART goal is “To increase my monthly revenue by 5% by the end of 2021”, or “To save $300 each month to reinvest into my business”. All of these follow the SMART method because they’re specific, have an easy way to track them, and are realistically attainable.
The biggest factor that you will need to consider is: What is the most relevant financial goal to set for yourself? To determine this, you’ll need to do research on the industry you work in. In particular, what are your competitors doing to grow their business? By figuring this out, you’ll have a much clearer picture of what financial goals you should be setting to give your freelance business the cutting edge.
2. Determine Your Path
Your next task should incorporate more specific actions that will determine how you’ll reach your goals. A simple, short, and to the point plan is ideal. While you’re going to want to develop an approach that’s in-depth about how each step should be handled, you don’t want to overcomplicate things either. There’s often a good middle ground here that will help you create the best strategy for achieving your goal.
Some recommendations would be to have a five-step plan, where each step lays out the “stages” of time-based mini-goals to complete in order to achieve your overall objective. In addition to that, make sure any steps in your plan are timely. After all, if you’ve given your goal a deadline of December 2021 for example, you’ll need to have set dates and times for when the steps leading up to that goal should be completed. This will help you ensure you’re staying on track.
3. Monitor Your Progress
Because you’ve designed your goal to be measurable, you have a great way to keep track of your progress towards any goal you set. This is going to be especially helpful when you’ve got a financial goal since money-related tasks are quantitative in nature. This allows you to use a variety of methods to track your progress on a monthly, weekly, and even daily basis.
There are a lot of ways that you can track your financial goals as a freelancer. One way is to use digital accounting platforms to keep track of your business’ expenses and revenue on a monthly basis. You might also need to get a business bank account, which can be a great place to keep your business’ finances safe and secure, and easy to manage.
Another important thing for any freelancer is to keep their personal and business finances separate. Since freelancing means you and your business are one and the same, having a way of differentiating your personal finances from your business finances is going to be key. One great option is a digital banking platform. These have a lot of great features that freelancers can take advantage of such as fee-free digital payments and options for getting paid early. By utilizing these types of tools in your personal life, you’ll be able to reduce financial stress overall and help you achieve goals within your business life.
4. Have a Backup Plan
Unfortunately, even with a good amount of planning and goal setting, there still might be hiccups in the road that can set you back. Things such as unexpected business costs, late payments, and even long periods of time without a gig can put a serious financial strain on your freelance work and set you back from achieving your goals.
When setting financial goals, one good way to have a backup plan by building an emergency fund. An emergency fund is an amount of money set aside to cover business expenses during slower months, or times when you need to make emergency purchases. Having one on hand is a good way to keep your goal on track even with some setbacks. You can get started on an emergency fund for your business at any time, by dedicating a certain percentage of your profits towards savings every month.
5. Readjust, Refocus, and Repeat!
As you progress through your steps and start working your way towards completing your goal, having a strategy for readjusting your strategy is going to be important. Oftentimes, people might realize when they’re on their way towards completing a goal that it might not be what they need after all, or that it’s a bit out of reach. Because of this, make sure you’re able to adapt and make your goals malleable.
By following the previous steps, you should have a good method of tracking your progress towards your goals, and the ability to locate where changes can be made on a regular basis. Goal setting is a great way to get your business on the track to grow and succeed, especially when it comes to creating a solid financial foundation for your freelance career.