For many freelancers, inflation has forced them to adapt their business strategy to safeguard themselves against higher costs.
Food and non-alcoholic beverage prices rose by 14.6% in the 12 months to September 2022, up from 13.1% in August, according to the latest ONS figures. The annual rate of inflation for this category has continued to rise for the last 14 consecutive months, from negative 0.6% in July 2021. The current rate is estimated to be the highest since April 1980.
Freelancers are concerned about the impact inflation has or could have on their work (71%) – only 10% of freelancers are not worried about it. Marketing freelancers are slightly less concerned about inflation, said the report, compared to other skilled services freelancers who don’t offer a marketing service (68% vs. 75%).
One way freelancers have adapted is by maximizing potential income streams. This is according to The Second Annual GrowTal “The State of Freelancing” Report conducted by GrowTal, a marketplace for marketing professionals and Opinium, a strategic insight agency.
While those who work traditional jobs rely on their companies to offer bonuses or pay increases during high times of inflation, freelancers depend on themselves to create extra cash, said the report. A third (34%) of freelancers have pursued additional avenues for freelance work, such as learning a new skill set to expand their offerings.
A “silver lining” for freelancers in the economic downturn, respondents say that some companies have been outsourcing work to cut back on their costs. In addition, one in five (19%) freelancers say this period of high inflation has positively impacted their work because it has led to more opportunities.
How freelancers can boost their earning power in times of inflation
One thing all freelancers should consider is boosting their rates. But what if your clients often set the rate? Well, if you have had the same rate for the past two years, then it can’t hurt to ask for a slight increase in your day or project rate. You have the perfect justification: inflation.
Freelancers that think ahead and secure work months in advance have a better hold on their future finances. Think of the painter decorator who books jobs with clients for the next 6 months. Yes, clients can pull out of work. It happens, but at least you are not grappling for work last minute or week by week when things get desperate financially and mentally. You have more than once project secured.
- Start pitching months in advance. Blocking work in advance covers more bases. Make it known to new and existing clients when you are available and the types of services you can provide by reaching out to them directly and announcing them on social media.
- Think of pitches in seasons. When do people usually need a certain service or product? Tax season? Christmas or school holidays? Warm or cold weather? Make them aware that they can book your services in advance so they are not scrambling later.
- Early bookings discount or a freebie thrown in: Make it known to clients via a marketing email or social media posts that your freelance business will offer a discount code that clients can use for certain types of work booked in a certain month. Set your rates accordingly. Never be breaking even, so work in a margin.
- Network in local business groups so you can pitch your services to members and be part of a business directory. Often you will find when going to local networking events, you will get future business through word of mouth from people you have met.
- Get business cards and keep them on hand whenever you are out and about. They may seem so pre-digitisation, but they are effective when you meet someone useful unexpectedly and don’t want them to not be able to reach you.
- Call in for backup. If you are getting a flurry of new business, then get backup by calling in the help of another freelancer and get a cut of the work they do. Make sure you have provided them with a freelancer contract though and have funds to pay them based on the payment terms.
- Offer additional paid services rather than just providing them for free. You may find that when you take on a job or project you are doing little extras. Why don’t you consider marketing these extras as extra services and get paid for them?
- Create another side gig or business division. Never think that you have to focus on one type of business. If you are good at something or have a passion that could bring in an income, speak to an accountant to see how you can add this service to your existing business, but as a separate entity so you can claim expenses and training costs if you have to re-skill and the business is very different from your existing one.
- Build residual income. This takes time and depending on the product or service some funding, but those that are successful at it literally can make money in their sleep: think books, paid video content (subscription or one-off); an app, courses, etc.
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