In the lead up to 2015, I’ve been organizing the systems I use to track my freelancing income and the work I’m doing, even more than I already had. (And I’m a geek, so trust me, I had systems.)
But I noticed a few months ago that I wasn’t really on the ball when it came to seeing how much I was bringing in per month, how efficient my querying was, and where I was falling short and needed to improve. As a creative person, these are things that I don’t particularly enjoy doing, so I left them alone and just went about my work.
My husband, who is probably worse than I am at keeping track of income and expenses, sent me a spreadsheet he’d used at his former job and as I filled in my numbers on that sheet, suddenly I discovered just how easy it was. I realized that once the systems were set up, I could easily track everything without any additional work and it provided so much information about my business that it made complete sense to swallow my distaste and just spend a week doing it. What do you know, not only did I set it up, I actually enjoyed every bit of the process.
(By the way, I’ve made that system publicly available now, so if you want it, check it out here.)
I learned in the process that there are a few numbers that no freelance writer can afford to ignore because it provides you with insight into your business and makes clear your shortfalls and the areas you need to improve upon.
1. Number of Clients
I divide my client list into two parts: regular clients and occasional clients.
The regular clients are those, at least the way I define it, who give me work more than four times a year. The regular clients are people who I constantly want to be in touch with and I keep track of the next step with them. If I’m on assignment with them, that’s fine, but if not, then I need to either send them new ideas, follow up with them, schedule a conversation or something. These are clients who like and appreciate my work so I try to stay on the ball and have assignments from them as frequently as possible.
My goal for 2015 is to first get to the point where I have 20 regular clients (my earlier goal was 12, which I have kept steady for several years) and no longer have to solicit additional work from new clients.
2. Amount Earned
Unshockingly, this is a number that most freelancers do keep track of and for good reason. The amount earned, as I define it, is the dollar total of the assignments I’ve received in a given month.
For instance, an editor just offered me $1,200 for an assignment due in December. I won’t bill for this assignment until next month and I won’t see this paycheck until January, but I got the assignment this month, so I’m going to count it in my amount earned column. This helps me keep track of how efficient my pitching is and helps me make sure that I’m regularly bringing in additional work.
3. Amount Billed
The amount billed per month is a measure of how efficiently you’re working. The amount billed is the number I’m always trying to top and that I actually have control over. If I finish four assignments this month, I can invoice for four assignments, but if I write and finish eight, I could potentially be invoicing for double of that. I like this a lot.
I’m always trying to improve my efficiency and by tangibly being able to see that I’m actually helping my income grow as a result of my efficiency is a great motivator for me. I use Freshbooks (and highly recommend it; that’s my affiliate link) and it makes the whole process of tracking all these numbers exceptionally easy.
4. Amount Received
This is the area in which freelancers will find that they have the least control, but the good news is that if your amount earned and amount billed are on target each month, barring a few bad apples, your cash flow shouldn’t suffer too much.
To counter the grappling in the dark feeling that I was experiencing regarding how much money’s coming in, I created a spreadsheet earlier this year that helps me do just that. Every time I get an assignment, I figure out exactly when I’m likely to get paid and put it in the spreadsheet. For instance, if I have an article due today that will be published in January and the magazine pays on publication, I’m going to get paid in February. It could be earlier if they’re super efficient or later if I have to follow up a few times, but I plonk that number into the February column. Do that for every assignment and now you can see, at a glance, what your cash flow is going to look like in the months to come and how much work you need to put in to improve it. (Or whether you can actually relax because it’s looking good and you were worrying for nothing.)
Since it’s November now, look at your December, January and February columns. Is there enough money coming in over those three months or do you need to start pitching and getting some quick assignments?
The thing I love about this particular spreadsheet is that it allows me to see what kind of work I need to bring in. If next month is looking tight, then I need to really ramp up my marketing and get some hourly consulting work or assignments from online publications that will pay quickly. But if I’m okay for the next two or three months, it’s easier for me to pitch a feature to a woman’s publication that might take about four months to publish and six months to pay (and pay substantially more).
5. Hourly Rate Per Assignment
I’ll talk in a future blog post about how tracking my time and calculating my hourly rate per assignment is really helping me see, in black and white, how profitable an assignment really is for me, so I won’t go into more detail here. Suffice it to say, if you can track how profitable each assignment is for you (or isn’t), it enables you to make better-informed decisions when new opportunities present themselves.
6. Words Written Per Day
Do you track how many words you write per day? Income is entirely dependent on productivity and for a writer, the best measure of productivity is how much you’re actually writing. Whether it’s for an assignment, a blog post, or a query letter, writing something creatively each day is what’s going to get you in the habit of producing work quickly and efficiently. Most career writers will track everything except this number, which as far as I’m concerned, is one of the most important currencies in the business. Every time you write, you’re practicing. You’re sharpening your knife, honing your skill set.
P.S. You can certainly create systems and templates for tracking all these numbers yourself. But if you want to save yourself time and additional hassle and focus on your main work– writing– leave the organization to the people who actually like it. People like me. I’ve created an entire business-in-a-box system for freelancers that takes away the hassle and just leaves you with the results. Check it out here. I know you’re going to love it.)