Like a bigger business, you will need to manage your cash flow efficiently, and plan for the cycles of your business.
Carol talks about this in her latest post on entrepreneur.com, “5 Must-Do Business Practices for Freelancers.” Carl begins:
“Of the approximately 28 million small businesses in the United States, around 22 million of them are one-person enterprises. With the sharing economy being enabled by technology, there will likely be even more entrepreneurs making their own way.
While being a freelancer or solopreneur has many benefits, there are a number of challenges with being a one-man — or woman — band. Below are five ways to make sure that your freelance business adventures end up more American dream than nightmare.
1. Focus on cash management.
Because of the project nature of many freelance jobs, freelancers often find themselves in a feast or famine cycle. When things are going well, cash is aplenty, but what happens when a dry spell happens?
As a freelancer, make sure to put away a portion of any cash that comes in to help float you during the down times. This means that any time you get a check, put a portion into a special business savings account at the same time that you pay your bills, so that you can cover your overhead during times with little work.
Also, shorten your cash cycles by offering terms to get cash in as quickly as possible, while you lengthen the terms that you use to pay your own bills and vendors — I call this ‘cash flow yoga.’”
You can read the rest of the post here.