Key Performance Indicators (KPIs), as the name suggests, are used by businesses to measure their performance. As a freelancer, you can also adopt KPIs to track your growth, ensure you are meeting your freelance goals, and give you an overview of your business’s financial health. They can also highlight areas needing action, such as chasing unpaid invoices, adjusting your rates, or even taking time off.
Here are some KPIs to consider that you can track and measure as a freelancer.
Client acquisition
How many times you pitch or send proposals to clients and how many clients you win as a result of them are good metrics to measure and will indicate areas that may need tweaking. It will also show you how much time (and money) you spend on client acquisition activities.
Likewise, if you employ cold outreach in your client acquisition strategy, you’ll want to know what works. For example, how many cold emails do you need to send or cold calls do you need to make on average before you land a client or make a sale – and how long does this take you to perform? Are these being targeted to the right people? Are you spending too long on these activities, or could your time be better focused on client referrals or up-selling to current clients?
Retaining current clients is generally less time-consuming and more cost-effective than constantly pitching to new ones.
Reviewing these areas will help keep you on track with your freelance money goals.
Traffic and conversion
While there are plenty of metrics you can be looking at, and the ones relevant to you will depend on your business and goals, there are some common metrics worth considering and keeping tabs on.
One of these is the number of visitors to your SEO-optimized website, where they come from, how long they stay, if they are reading your blog posts, and if they convert into clients or sales. This is commonly known as the conversion rate.
Likewise, if you have an email newsletter to market your business, you’ll also want to track the conversion rate here – i.e., the number of sales each email generates. Another metric is the email open rate to gauge if your email subject lines are encouraging people to open the email in the first place.
Without the initial click, there won’t be any sales!
Social media metrics
If you market your business via social media marketing, then, depending on whether you utilize paid marketing or not, there are metrics here that you’ll want to measure and can range from engagement rate, i.e., how much engagement each post generates, to people liking and sharing your content, to whether or not it’s making an impact?
What about follower growth? While it’s more about the right followers rather than the volume and vanity metrics, it’s still something you’ll want to note. How well is your social media marketing strategy doing in terms of sales or traffic to your website? If you’re using paid ads, you’ll also want to know how much you spend to generate sales.
Freelancers typically spend a lot of time and effort building their personal brand on social media, so you’ll want to ensure your efforts are paying off.
Money matters
A key area you’ll want to keep tabs on is your freelance business cash flow (actual money coming in and going out) and profit (i.e., the amount of money left after costs and taxes are deducted). You may find you need higher-paying clients, to adjust your rates, or reduce your costs to meet your freelance money goals.
In addition to accounts payable – the money going out from your business to cover costs to run it, etc. You’ll also want to ensure accounts receivable are all up to date – the invoices due to your business. Unpaid invoices can negatively impact your cash flow.
An effective way to ensure invoices are paid on time is to use automated reminders. With the Invoice Ninja Pro Plan, you can create custom email reminders based on the invoice date or invoice due date. You can set them up so they are sent automatically at the frequency and timing of your choice. You can set “First, Second, Third” or “Endless” reminders to ensure invoices are not overlooked and you get paid faster!
Try Invoice Ninja for free here.
Client hourly rate
Even if you don’t charge an hourly rate and charge project rates or value pricing or some other non-time method, you’ll still want to know how long projects take so you can ascertain your hourly rate – in other words, you want to know how much time you are spending on specific tasks and what it costs your business.
This is because some tasks could take up a lot of your time that you could outsource, automate or accelerate.
Alternatively, it could be that a specific client takes up more time than others, so you want to know how much time you are spending on their project and how much it’s earning (or costing you) when compared to other clients or projects. You can then adjust accordingly.
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Finally, you’ll also want to track how many hours you are working. It’s important to have proper rest and downtime so you are not always burning the midnight oil. Taking time off as a freelancer and getting appropriate rest and recuperation is just as important as, and will improve, the quality of work you provide to your clients.
