While running your own business, being your own boss and doing the stuff you love can seem like the dream job, the variable income, which is a hallmark of freelancing, can be a roller coaster ride for some, especially if you don’t earn a regular income – and on top of that – are not paid on time.
For freelancers and small business owners, the harsh reality is that the sooner you get money in the bank, the better your cash flow. This, in turn, means you can worry less about the finances and focus on offering a brilliant service and creating products your clients will love.
With this in mind, here are 5 strategies you can apply to your freelance business to keep your bank account topped up and buoyant.
1. Ask for payment upfront
This may sound obvious, but one way to get paid faster is to simply charge your clients upfront and don’t start work until the money is in the bank. That way, there’s no danger of getting paid late. As soon as the client accepts your quote, invoice them. Even better if you can send it to them via email, and they can pay you at the click of a button.
Because Invoice Ninja integrates with multiple payment gateway providers, it makes it easy and convenient for your clients to pay you. Clients can pay you in just one click, and they don’t even need to leave the Invoice Ninja client-side portal. Seamless, quick and convenient!
If you don’t want to charge 100% upfront, consider a deposit as partial payment, with the final payment due at the end of the project, or use what is sometimes referred to as milestone invoicing, where payments are made throughout the project’s duration.
Once again, with Invoice Ninja, you can easily convert your quote to an invoice. When you email quotations to your clients, once they are happy with the details and want to proceed, they can “Click to Approve” the quotation, which converts it into a payable invoice.
2. Have a virtual tip jar
Virtual tip jars allow your audience, customers and clients to pay you gratuities.
If you’re a creative who regularly shares their content for free, virtual tip jars are a great way for your fans to show their appreciation for your hard work.
You can include a virtual tip jar link on your website, in your email newsletters, share it on your social media channels, and, where applicable, include a link in your social media bios – and even add it to your invoices.
There are also online platforms such as Buy Me a Coffee and Ko-fi that you can sign up to and direct people to. These sites are great for content creators; you can showcase your skills and products and top up your bank balance at the same time!
3. Create a Pay What You Want offer
If you have a low-tier offer, such as a digital info product, consider applying a ‘Pay What You Want’ price option. This puts your brand in front of people who might not otherwise buy because they’re not sure your product or service is for them—it removes any barrier to entry and acts as a nice taster.
It could also act as a bridge to them buying a higher value offer from you down the line.
It will also give you insights into how to charge your products and services in the future—this is especially valuable if your offer is a new product and you are unsure how best to price it.
While this pricing strategy works on the principle of reciprocity, you should also be aware that while some people may be generous, the price paid could also be zero, so it is probably not workable with high-value products and offers.
4. Encourage early payment, and discourage late payment
Offering a discount to people who pay you before the invoice due date is a great incentive for clients and customers to pay you ahead of time and get your invoices paid faster.
For example, your standard payment term could be Net 30 (meaning the invoice is due within 30 days), and you could apply a percentage discount if it is fully paid within, say, 10 days. With Invoice Ninja, you can set up line-item discounts (aka product-specific discounts) and invoice total discounts.
Just as offering discounts as an incentive, applying late payment fees is an effective disincentive. Naturally, you’ll need to make clear in your payment terms and conditions that late payment fees apply. You should also add a statement to this effect on your invoice.
With Invoice Ninja, you can add late payment fees to your invoice as a percentage or as a set amount.
5. Charge for Discovery Calls
While discovery calls can be free, if they take up a lot of time (money) or effort, consider charging for them-especially for big or high-value projects, where the research, initial call and quote can take some days to prepare.
It can be disappointing when you’ve devoted a lot of time and energy to writing a detailed proposal and having deep-dive calls with a potential client, only for it to come to nothing.
But even for general prospective client calls, you could consider charging a nominal amount to avoid being ghosted at the last minute. As well as a good way to qualify clients, getting a small commitment upfront can result in a bigger commitment later on (i.e. when you close the sale).
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The above strategies depend on your specific business, customer base, and ways of working. There may be other ways you can think of to maintain a healthy cash flow, get paid faster, and help your business thrive, but we hope these helped.