Telling stories

Are You Running Your Business Like a Business?

Posted by southwrite on September 14, 2009

—Photo by flickr user Cayusa used under a Creative Commons license.

—Photo by flickr user Cayusa used under a Creative Commons license.

You became a freelancer because you wanted the freedom of working for yourself, choosing your clients and setting your own schedule. That’s what being an entrepreneur is about, right?

Yet, many freelancers don’t act like businesspeople. They love the freedom, but they don’t want to do the mundane things that companies do to be competitive. Sure you’re probably good at your core business – writing, design, photography or whatever – but, what about the business of business?

Here I’m talking about the common practices that companies follow to maximize profits and stay in businesses. You can run your businesses better and improve the bottom line – putting more money in our pockets – if we take a look at what companies do and adapt those practices to our own admittedly small time operations.

Be ruthless in cost cutting

Successful companies get to be successful not just by having a great product and sales team, but through the unglamorous job of keeping expenses in line. A good business will cut out unnecessary expenditures and search for better and cheaper ways to get things done.

One freelancer insisted to me that she needed a fax machine and second phone line. When I questioned how many faxes she actually received the number was less than one a month. When you calculated the cost of a fax [maintenance, ink and paper, and a second phone line] it was somewhere around $30 each.

No early adaptor myself I junked my own stand alone fax machine half a dozen years ago for an internet fax service. I scan documents that I need to send and get incoming faxes as PDF files in my e-mail. No extra machine, no second phone line. Although the service only costs $10 a month, over time it’s become increasingly inefficient. Few people send faxes these days opting for e-mail attachments instead. Now I have to ask myself: would it be more cost efficient to cancel the service or opt for one of those free receive-only services?

You can probably think of any number of cost saving measures that won’t cramp your business or your style. Did you really need the New York Times in the morning when every article [and more] is available on-line? As a former newspaper reporter that’s a hard one since I love the feel of newsprint and ink on my fingers.

Set a goal to identity common expenses – particularly recurring monthly charges – and decide if you really need the service or the product. If it’s a business expense, decide what it would mean to you if you didn’t have it. Do you have a Lexus Nexus subscription to access magazine and newspaper articles? If you don’t use it all that often for work – and I didn’t – head to your local public library. The research librarian can order them up for you in minutes for just a small charge.

Size your business

A good way to cut costs is not to spend. When purchasing equipment it should be sized to your operation. Don’t spend $1000 or more on a high end computer if you’re a writer who doesn’t need that much power. It can be ego satisfying to purchase better equipment, but it can also be a cost that doesn’t have a return on investment (ROI).

Don’t drive when you can go direct

Do you have clients who insist on seeing you face-to-face? With telephone, e-mail, and Skype video conferencing, you really don’t need to actually drive to their office. The large companies that I’ve worked with never want to see me in person since all the work is begin done remotely.

It’s usually the small – and low margin – clients who want face time. Nudge them toward phone calls and e-mail. If they insist evaluate how much they mean to you fee-wise. I’ve sometimes found that travel expenses turned small jobs into money losers. It might be more profitable to stay at home and forego the job.

Better and faster

One of your greatest money savers can be you. How efficient are you at what you do? Are there graphic design programs that competitors are using, but you’ve only heard about? Research studies find corporation that invest the most in training also tend to have the highest valuations and stock prices. If you aren’t getting training and education, then you may be consigning yourself to the low end of business.

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