The best ways to invest your money to grow your freelance business
Remember the old idiom, it takes money to make money? Well, to a certain extent it’s true! If you want to grow your design business, you’re going to have to invest in it. But, how much should you be spending? And what should you be spending money on?
While there’s no magic number or a one-size fits all solution, here are some things to keep in mind as you begin putting money back into your business. They’ll help ensure you’re spending your money wisely, moving you closer to your business goals.
Investment possibilities for new businesses
Baby businesses need care to grow. If you’re just starting out, you should be putting a good amount of money back into your business. Warren Buffett and many other financial experts recommend reinvesting a minimum of fifty percent.
But, before you put any money back into your business, it’s essential to have direction. Why did you start a business? What are your business goals?
Take some time to think about these two questions, because your answers will help you figure out where to best spend your money. Let’s look into four options for your new investments.
1. Web presence
As a designer, your clients expect your site to be amazing. Is your site giving a good first impression? Or are you like the mechanic who drives a run-down car because after working on cars all day, the last thing she wants to do when she gets home is work on another car.
Sometimes after a long day of client work, you don’t have the time or energy to devote to your own web presence. Do an honest analyzation of your website. Is it saying what you want it to say? Do you have the time and energy to get it where you want it to be?
In addition to the design and functionality, pay attention to the overall message. Is there a clear call to action? Does your copy work for the web?
If not, hiring someone to help you with your web presence should be a priority. Improving your website will help you land more clients, and grow your business.
Even the most compelling website won’t translate to paying gigs if no one sees it. Advertising, either paid or organic through an improved social media presence, will help put you on the radar.
Your advertising dollars don’t just need to be spent online either. If you work with local businesses, consider joining your local Chamber of Commerce and taking out some old-fashioned newspaper ads. Mailing flyers to targeted businesses makes sense. Figure out where your ideal clients are hanging out, and then get your message to them.
3. Equipment upgrades
Did you start out working off an inexpensive laptop? Is it still meeting your needs, or have you outgrown its memory and performance? Do you need a better camera or scanner to improve your work?
Analyze your equipment and make sure it’s helping you reach your goals. Do you need to invest in new equipment? Are there programs you need to buy in order to grow?
Also, whatever equipment you’re using, make sure you keep it in top working order. If your equipment fails, getting your job done just got much harder. Maintain your tools to keep them working.
Do you need to invest in your education? Are there any courses you can take to improve your business sense, communication skills, or design knowledge?
Think about any skills you’re lacking, or areas to improve. Then see if you can find a course or book to help you get where you want to be.
Investment possibilities for established businesses
Once your business is established and regularly making money, it’s no longer a baby. But like young children and teens, these growing businesses need nourishment so they don’t stay stagnant. Don’t stop investing in your business just because it’s no longer new.
However, you might reevaluate your method for reinvestment. Instead of putting half of your revenue back into your business, you may decide to lower the percentage. Many business owners regularly invest between 10-25 percent. If you’re hoping to continue growing swiftly, however, continuing to invest half will keep you on the fast track.
During this stage, you can continue to invest in the items mentioned above. You may also consider putting money into the following areas.
1. Business improvements
What are the bottlenecks in your business? Are there any procedures or processes you can improve? Write down the pain points in your business, and investigate ways to solve them. You might need some new software or maybe even an employee.
Keep making improvements to your business as you grow. Look for ways to improve your quality, efficiency, and reputation.
“Sometimes a little accountability can do wonders for continued growth. ” If you need an outside perspective and view, consider investing in a business coach.
A coach can help you gain clarity in your business model and purpose. Since your coach will be on the outside looking in, you’ll have someone analyzing the bigger picture who can help steer your dreams into reality.
If you’re ready to find a coach, begin by asking your network for referrals. Ideally you’ll find someone who has already been vetted by someone you trust. If that route doesn’t work, you can use specific search terms to help you. Try “Strategy coach for freelance designers” or something similar where you specify both the type of coach you are looking for and the type of business owner you are.
No matter where you locate potential coaches, you’ll want to spend a little time with each, to ensure the two of you work well together before agreeing on a long-term commitment. Often coaches offer a strategy call at a discounted rate just for this purpose.
Continue to invest in yourself to help you grow your business. Is it time to learn a new skill to diversify your income? Are there any conferences you can attend to help expand your network and knowledge?
Putting money into yourself will help you be a better business owner!
4. Grow your cash reserves
Are you prepared for the proverbial rainy day in your business? By continuing to add money to your cash reserves, you will be.
Save money now, and you’ll be prepared later to buy:
- An advanced seat at a conference
- The course you’ve been eyeing when it goes on a flash sale
- A new computer if yours stops working
Having money on hand means you won’t have to worry about where the money for an unexpected expense is going to come from. It also means you can take advantage of sale pricing on something you were planning on buying someday.
Scaling through outsourcing
No matter the size of your business, outsourcing is one way to invest. But, it’s not always financially prudent to outsource.
1. When should you outsource?
There isn’t a single right time to outsource. Whenever you find yourself faced with a task you are unable to do, here are some questions to ask yourself before outsourcing.
- Is it an essential task for your business?
- Does it need done repeatedly, or just one time?
- Do you have any interest in learning how to do it yourself?
- How long will it take you if you try to do it yourself?
- What will your ROI be if you outsource?
- Do you have the money to pay for outsourcing?
Those questions will help guide your thought process as you consider outsourcing. If you have the money, and you consider it a worthwhile investment, it’s time to outsource.
2. What types of tasks should you outsource?
When you’re trying to decide what to outsource, look for tasks that:
- You don’t enjoy doing
- You struggle with or can’t do yourself
- Take a lot of your time
- Will help move you closer to your business goals
Your strengths and weaknesses will give you further insight. The tasks I need help with might be different from the ones you do.
To help you start thinking about all this, here are 10 examples of commonly outsourced tasks:
- Writing blog posts
- Scheduling social media posts
- Editing content
- Creating a sales funnel
- Connecting technical components to sell your services
- Running a Facebook group
- Creating a course
- Managing a website
- Sourcing photos
- Performing market research
Think about tasks you need help with. Create a list of things it makes sense for you to outsource. Then, decide how long you’ll need help. Is it just for a single project? Or do you need ongoing work completed?
3. Ways to outsource
When your list is ready, it’s time to decide how to outsource your tasks. There are several ways to hire other people.
When you need help with a project, or another one-time or short-term task, you can hire a project-based virtual assistant. You can also look for businesses that specialize in the task you need help with. Alternatively, look through your network for people who have the skills you need. You could send out a social media blast letting your friends know you’re looking for help.
Virtual assistants or independent contractors
If you need long term help but aren’t ready to hire an employee, a virtual assistant or independent contractor may be the solution. With this type of help, your options are flexible. You can bring on some extra help for a one time project, or find a partner you can use frequently. Is there a part of your job, like development work, you often need to outsource? Finding a reliable developer can almost add a partner to your business, and you’ll save time searching for help each time.
Hiring an employee
Do you need consistent, long-term help? It may be time to bring on an employee. Think about what you need done, and if it makes sense to bring on some part-time or full-time help.
4. Cautions to outsourcing
No matter how you decide to outsource, make sure you select a person with the skills, knowledge, and availability to get the job done. You don’t want to hire someone only to find out they don’t know what they’re doing.
Also, you’ll want to spell everything out in a contract, so you both know what to expect. Having a lawyer review your contract is wise, especially if you’re including a non-compete or non-disclosure agreement as part of the terms.
Be sure to hammer out payment and expected outcome details prior to starting work. You want both parties to understand the method, frequency, and rate of payment. If you’re going with a virtual assistant or employee, you might consider a two-week trial period to ensure you’ll work well together.
You don’t want to get scammed, so these steps will help protect you and your business.
Review your expenses regularly
Are you paying for a service or product you no longer need? Sometimes expenses run on auto-pilot, and they’re easy to forget about. Take time regularly, at least once a quarter, to review all your expenses.
Are you still using what you’re paying for? If not, are you locked into a contract where you must pay for a certain number of months? Whenever possible, cancel unused expenses as soon as you can. If you can’t cancel yet, be sure to set a reminder on your calendar so you remember to cancel when you’re eligible.
“Saving money on unused expenses means you’ll have more to invest back into your business. ” You want to ensure every dollar going out moves you closer to your goals.
Are you regularly investing in your business? What other tips can you add to help other designers spend wisely?
Have you read these freelance articles?