Business practices which would help keep freelancers stay afloat

With a rapid rise in popularity, freelancing has become a cut-throat business. Not only do freelancers compete against countless peers, they also have to tackle miserly and frustrating clients on an alarming frequency. This kind of competitive and erratic environment becomes overwhelming, hence it's essential for freelancers to protect their best interests if they are to survive, much less become successful, in their line of work.

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Here are a few business practices that freelancers should follow without fail if they want to make their freelancing career a success:

Don't undervalue yourself

First things first: never do anything for free. Don't do it for the exposure or the experience or whatever nonsense a client, who doesn’t want to pay, tries to feed you. If you're putting in the time and effort to create something, you deserve to get paid for it. Period.

Secondly, a common problem with freelancers, especially those who are starting out, is that they have trouble attaching a fair price to their services. They get disheartened seeing people on freelance job sites charging ridiculously small amounts for projects and proceed to emulate them in hopes of landing a client. But this never does any good. It's perfectly okay to charge more than the average as long as you are confident of your work living up to the cost. Charging less than what you feel you're worth will only leave you with a nagging feeling once you've completed the project.

Don't start a project without a contract or deposit

In any typical freelancing arrangement, the freelancer always has more to lose than the client. There are instances when clients, for one of several reasons, decide to drop the freelancer halfway through a project without paying them for the work done. Therefore, you should never start a project without getting a deposit or having them sign a contract. This would prevent the client from backing out with impunity. Make sure that your clients are bound to pay you if they suddenly decide they don't want your services and you'll find your life as a freelancer having far fewer hassles.

Draft a scope of work

The 'scope of work', or 'statement of work' as it's also called, is a document that details all the aspects of the work you'll be doing to complete a client's project. It includes a breakdown of milestones, reports, deliverables and other value-added products that you will be producing, along with individual timelines and costs associated with them. There are readily available templates that you can use to create one. An SoW defines what you're doing for a client and why you're charging whatever it is that you're charging. Also, remember to include a clause which allows you to charge for revisions or extra features and such which the client may request after the SoW has been signed.

Learn basic accounting 

Being a freelancer is very much like operating a small business except that there's only one employee: you. Every business needs to maintain its accounts lest it run into financial troubles and it's no different for freelancers. You have to keep a track of invoices, manage cash inflow and expenditure. This will help you while filing for taxes, also making sure that you're not losing money from cheating clients. Since freelancing is not a steady business, income can become erratic at times. A strong control of your finances helps you save for dry spells when you find yourself out of work.

Be on your toes for the next project

You search for a project, you get one, you complete it, you get paid for it and you start searching for the next one. Hit repeat. This is the work cycle adopted by most freelancers but it presents one serious problem — the fallow period between completing one project and landing the next during which you aren't receiving any income. Prevent this by ensuring you have projects lined up for the future. Even while working on one project, dedicate enough time to source potential projects. This practice will help eliminate the worry of not getting work.

All this might be daunting at first but you'll get the hang of it soon enough. And once you do, your work as a freelancer will become far more rewarding and tension-free than it was earlier.