2020 was an unimaginable year. By late March, we were fighting a global pandemic amidst quarantine orders and lockdowns that drastically changed the way we live and work. As remote work and flexibility became more commonplace, even more people began to enter the freelance workforce. Whether you are a longtime freelancer or whether you are just starting your freelancing career, this article shares several strategic tips for you to wind down 2020 and plan for a successful 2021.
Express Your Gratitude.
2020 was a difficult year, but if you are reading this, you have almost survived it. There is no time like the present to share your gratitude with the individuals and businesses that have supported you during the past year. Express thanks not only to your clients, but to the people in your professional and community networks that were there for you. Send an email, make a call, or better yet – send a hand-written thank-you card. For special clients or particularly impactful mentors and associates, you might even want to consider a bottle of wine or a gift basket. (Who wouldn’t appreciate the extra love after a year like this?)
Take Care of Your Health.
2020 has reinforced the need to take care of our collective health. Yet, a number of freelancers are still going to make the short-sighted choice to go without health insurance in 2021. While this decision may seem like a good idea in the moment, it can have disastrous consequences if you become seriously ill or injured. Foregoing health insurance can result in the denial of medical treatment, serious long-term financial hardship, and credit problems that can negatively impact your business. If you are a freelancer, assess the solutions available to you. Between subsidies, tax deductions, and alternative health plans, there is an affordable option that will help protect both your physical and financial health.
Evaluate Your Sales & Marketing.
Year-end is an ideal time to assess and update your sales and marketing efforts. While this assessment will depend on the type of freelancing business you run, these are a few ways to have an immediate, low-cost impact: 1) assess and adjust your social presence (e.g., have you been crushing it on Instagram but gaining no traction on LinkedIn? Was your Facebook advertising ROI worth it? Could TikTok, or even a non-traditional site like Only Fans (yes, Only Fans!) expand your visibility?); 2) ask for client testimonials and references to use on your website, in marketing efforts, or to have on-hand when a prospect asks you for references; 3) analyze and adjust your web presence (i.e. does your website need an update? Could a blog help drive traffic to your site or raise brand awareness?); and 4) consider marketing promotions or special offers you can use now to help drive year-end sales or Q1 revenue.
Prepare for Tax Time & Consider Your Financial Health.
Assess your tax and accounting practices throughout the past year and identify opportunities for financial growth. Freelance wages aren’t taxed like a W2 employee's; instead, freelancers typically estimate and pay quarterly taxes throughout the year, with the next due date on January 15, 2021. How did you manage with your quarterly taxes in 2020? Did you set enough funds aside? Did you separate your business and personal expenses and maximize all available tax deductions? If there is room for improvement, find the right tool today that will help you in January.
Regarding your overall financial health, evaluate whether it is time to increase your rates and/or reduce certain expenses. If you made contributions to retirement accounts, make sure you are taking advantage of potential tax benefits. And if you aren’t contributing to a retirement account, evaluate whether this is a possibility in 2021. Investing the time to review your accounting and financial practices now will pay dividends later.
Plan for 2021.
An obvious way to ensure success in the upcoming year is to plan for it. In the last few weeks of 2020, start preparing for 2021. Create your budget and sales forecast. Consider and set goals for the new year. Organize your office, your computer, and your calendar. Do these non-revenue generating tasks now so you won’t be procrastinating with them after the holidays.
In conclusion, by employing some of these strategies, you can help ensure a smooth wind-down of your freelancing business in 2020. While this year has presented unique challenges that were often beyond our control, a successful 2021 is within our reach.