Business Survival Guide: 8 Practices of a Long Term Freelancer
Editor’s note: Thanks to Shane for this fantastic post. I have to say that this is one of my favourite articles in the history of FSw, and I hope you all enjoy it as much as I did 
According to the Webster Dictionary, a practice is:
- to follow or observe habitually or customarily
- to exercise or pursue as a profession, art, or occupation
- to perform or do repeatedly in order to acquire skill or proficiency
Five years ago, John Maxwell, the author of every leadership book conceivable, told a group of us at a conference: “I can predict the long term outcome of your success if you show me your daily habits.” I have often heard that most business is 90% science (or how to) and 10% art (which is about you). None of the practices below are technical / how to’s for one simple reason – you should already be good at what you do. After all, you are selling your services as an expert, and if you truly suck at your specialty, then god help you and those who hire you. It’s those vital practices that you may NOT be good at that creep up behind you and then take you out.
1. Practice Selling Yourself and Your Business
Suggested Book: How I Raised Myself from Failure to Success in Selling by Frank Bettger
As an independent contractor, you are constantly putting yourself out of work. That’s why learning sales is absolutely essential if you plan to make it over the long haul. I’m not talking smarmy sales techniques. I mean how to ask the right questions, how to build relationships, when to listen and when to talk. When do you push hard and when do you compromise. How to build long term clients that last.
Tips: Get out of the office and meet one new person every single day. Have a great business card. Practice making warm sales calls. Ask lost of questions. Keep a calendar. Always follow up. Request referrals from existing customers.
For more on sales: making successful sales calls
2. Practice Smart Money Management
Suggested Book: The Four Laws of Debt Free Prosperity by Blaine Harris and Charles Coonradt
Most of our clients pay anywhere between Net-30 days to Net-90 days or more. That means I can work like a dog and never see a cent for 3-4 months at times. In order to be able to handle the peeks and valleys of the freelance lifestyle, my wife and I had to learn some financial skills. Nothing crazy, just spend less than you make. Sometimes though, that’s easier said than done. This book has a series of simple strategies and suggestions for lifestyle management and debt reduction which are taught within a fun and gripping story (no boring finance books for me).
Tips: Get Quicken or Money and track every penny for 3 months – now that we can download credit card and bank statements this takes almost no effort. Use that to create a budget that can actually succeed. Set financial check points and goals. Don’t let your situation discourage you – it may seem bad but this information will give you the tools you need to improve it slowly. Allow space for fun and rewards. Learn to handle (and perhaps enjoy) delayed gratification. Attach larger purchases (like surfboards) to business goals – motivation is good. Well earned rewards are sweet.
For more on money: get paid on time: what goes in a proper invoice
3. Practice Picking and Managing the Right People
Suggested Book: First, Break All the Rules: What the World’s Greatest Managers Do Differently by Marcus Buckingham and Curt Coffman
We seem to manage people constantly. We manage our clients, ourselves, our team, our kids and even our spouses. Unfortunately you actually have to like the people you’re dealing with or no management techniques will ever work. People are just too smart. Yes we can tell.
If you’re lucky enough to actually like everyone you need to manage, then its time to refine your skills. I love books based upon some good homework, so with 80,000 interviews, break all the rules is a great resource to discover what a good manager does and does not do. How they pick their teams. How they deal with motivation, with placement, with bureaucracy and more. The chapter on “knowledge, skill and talent” is at the core of the team building strategy we are currently putting into place.
Tips: Listen, listen, listen. Ask questions. Listen again. Don’t be afraid of confrontation. Pick people and clients carefully. Pair people to balance strength and weaknesses. Your goal as a manager is to set them up to win.
For more on managing: building loyalty through success: talent vs skill
4. Practice Your Communication
Suggested book: Positive Personality Profiles: Discover Personality Insights to Understand Yourself and Others by Robert A Rohm Ph.D
In the end, all we do is work with people. Yup, we build stuff, but that is only to solve people problems. The better we understand what drives people and how they communicate, the better our business runs (and the better parent, spouse, mentor, team mate we are). Rohm’s system is by far the most clear and accessible personality system I have worked with. Its simple enough that I can carry it in my head and because of that I actually apply it constantly.
Tips: Know thy self. You will make mistakes, learn from them, then let them go. Practice responding rather than reacting.
For more on communication: the model of human behavior – understanding personality
5. Practice Being a Good Partner
Suggested Books: The Five Love Languages: How to Express Heartfelt Commitment to Your Mate by Gary Chapman
His Needs, Her Needs: Building an Affair-Proof Marriage by Willard F. Harley Jr.
As Donald Trump said recently (and he would know): there is no better way to choke a business than a flailing marriage. Early in our second company, my business mentor spent a lot of time with my wife Julie and I just listening. He would give the same answers over and over. To me – “Happy Wife, Happy Life”. To Julie – “Do you Want to be Right or do you Want to be Happy”. After all, when you fight in the morning, what are you thinking about all day? Your customer’s needs or the fight? Your partner can be your greatest asset or your greatest liability. Invest time and love in them, just as you invest in your business.
Tips: Schedule time for those who matter. You control your calendar, not your business (though it rarely feels that way). Apologize often. Never ever fight dirty – attack the issue all you like – never attack the person. Never say the word “breakup” or “divorce”. Count your blessings every single morning. Learn to speak the right love language and study personalities – that changes absolutely everything.
6. Practice Your Dream
Suggested Book: The Dream Giver by Bruce Wilkinson
No one ever said life, or business, would be easy. Its not supposed to be easy, but it is worth it. Sometimes we need to be able to focus on the victory, especially when it seems so far away, so you can make it through the struggles. Learn how to build your dream. If you love cars go to the Porsche dealership and test drive one (if you show up in a nice suit with the right posture and know how to talk cars, they will let you). If family is your motivation, have pictures of them everywhere, schedule “dream days” in which you spend time with them doing those things that excite you. Keep your reason why present and alive, touch it, see it, smell it, hear it, taste it, dream it … then live it.
Tips: Plaster your fridge with pictures. Keep a diary. Make a list of the top 100 things you want to have, do or become with your life. Have a big vision while giving yourself small concrete achievable steps – winning and losing both become habits. Dream big – life’s brighter that way. Spend time with people who believe in your dream and avoid those who are not supportive.
More on Dreams and Goals: figuring out the why
7. Practice Studentship, Servantship and Mentorship
Suggested book: Self-Made in America: Plain Talk for Plain People About the Meaning of Success by John McCormack
As John explains, no one is self made. We succeed through the grace and support of many people: mentors, partners, spouses, children and our teams. You have three roles you will always be playing as you succeed. As a student you will need to continue learning and growing to improve your ability to run your business, both technically and in all the practices mentioned. You are either growing or decaying, nothing stands still. The world never stops changing and you either keep up with it or become a victim of change. Surround yourself with people who have some measure of success and learn from them. Be a servant to your customers and your team. After all, your income is in direct proportion to the problems that you solve. When you cater to their needs, you move your own cause forward. Share the knowledge and information you have with people so that they may be more successful chasing their dreams. A rising tide raises all ships.
Tips: Find a mentor who has significant success in your industry and a vested interest in the growth of your business. Don’t be afraid to share your network (Love Is the Killer App: How to Win Business and Influence Friends
More on self-development: humility in business
8. Practice Joy, Laughter and Smile
Suggested books: There’s Treasure Everywhere–A Calvin and Hobbes Collection
Harry Potter and the Deathly Hallows
Julie’s mom told me a few weeks ago:
“I had a list of all the things I truly wanted to accomplish with my life. When looking it over a few days ago, I realized I had accomplished all of them. I have had a truly fantastic life. I am really happy.”
Building a business is one of the most rewarding aspects of my life. But it is not the entire formula. In our charter Peter and I listed our priorities: Family, Finance, Faith, Friends and Fitness. Success in life means success in all of these. Make sure you are balanced over time (temporary imbalance is normal) and remember to laugh and appreciate today while you struggle through this journey called life.
Tips: Surf every day (or do something you love). Find something that makes you laugh. Get exercise – what’s the point of all that money if you keel over with a heart attack in 3 years. Get a pet (dog’s love you no matter how bad the day went). Maids are cheaper than fights – find simple solutions and act on them. Prayer is good for the heart. Healthy food can taste good. Tell people you love them often.
For more on silliness and life: Sitting in the hot seat
In conclusion, your daily habits will dictate your success in business. Become good with people and finances will make all the difference in the world. Like Chinese Herbal Pill of Business – these practices will make you harder and stronger for longer, guaranteed o ‘yo money back.
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Now this is a list of things that I need to do a lot often. I will definitely return to this article for personal reference.
Also a little nitpick: all the internal links in this article seem to malfunction for me. For most of them the target is the current page followed by a double quote. External links work just fine, so you guys might want to take a look at that.
Best regards,
Adrian
Fantastic article!
Especially like point no.5. A fight in the morning can really just kill the entire day, or week…even month! Heck, it could just end it all!
If it does, remember point no.8 – “Maids are cheaper than fights – find simple solutions and act on them.”
It’s nothing short of idiotic to wait 30 to 90 days for payment. Sorry not trying to be rude, just trying to get my point across. You need to sharpen your negotiation skills and take control of your business. There’s no way on gods earth, I would wait that long to get paid. I’ve been freelance for over ten years and all of my clients pay before the due date. I think 2 weeks is a reasonable amount of time.
Riki, government contracts can easily end up being Net 90 or longer. It’s the trade-off for getting some huge jobs.
Shane, these are great tips for running any business, but my experience of other freelancers is that many of them don’t see their freelancing as a “business” and act like it’s something they do between contracts or full-time employment. That’s just “creative unemployment”.
If you want to succeed long-term as a freelancer, the first step is to act like you have a business. From that starting point, these tips are an excellent way to focus on what’s important to keep your business and your life in good shape.
I agree with riki on that, even though I’m new. The longer I wait, the less likely I’ll get paid at all. My wife and I sat down yesterday and worked out a 10 day limit with reprocussions if not paid. I’m not sure but perhaps you can allow a longer grace period on larger jobs or larger corporations?
Like I said, I’m just learning, so I don’t really know!
But this is a good post, I’ve still got a lot of habits I’ve got to get going! Thankfully, having a happy marriage isn’t one of them, my wife is on board 100% (she’s even driving a dreaded school bus to help us out!) and we rarely fight, and if I don’t, she’ll force me to spend time with her!
Great post – I’m passing this one along.
Shane! You crazy, sneaky guest-poster, you!
I can’t pick my favorite tip because I love them all. Although any reference to Calvin and Hobbes in a business communication definitely makes my short list. Great article – you rock.
For small clients I give them ONE week! And in the case of a long-term project, it’s half up-front and half upon completion–or you don’t’ receive the completed work. I’ve never had a problem being paid.
I bill periodically throughout the development period. If I’m working on a big job that takes several months, I’ll send out a “detailed” invoice every two to three weeks. I don’t let clients build up a large debt. I also place a due date on the invoice, which is an important detail that some freelancers overlook.
We’re small operators, not big budget studios with quotes that cover everything from catering to boardroom/facility hire. Clients employ our services to save on the extra overheads that a studio would charge. Their employees wouldn’t wait three months for pay-day. Personally I think it’s not unreasonable to expect prompt payment for small independent freelancers.
If an account is overdue I automatically send a reminder, the following business day. If clients are slow to pay then it will effect the pace of production as I can’t afford the liability. I also lower the credit limit for slow paying clients to further reduce my risk.
The trick is to get good clients that depend on you and want to keep you happy.
I also don’t accept jobs fixed bid quotes. It’s the first sign that you’re about to be screwed. I charge a reasonable hourly rate and expect to get paid for the hours I work.
Periodic payments mean no nasty surprise at the end for either party, plus interest in my bank account. Clients get a sense of what you’re building and the costs involved as a project progresses. It also puts you in a position where you can collaborating with your client to flesh out new ideas during development, instead of worrying about scope creep.
Finally the best cure for tight turn-a-rounds, is to let your clients know upfront that charge premium rates for express delivery. Otherwise everything that come through the door needs to be done yesterday.
End of rant
It’s a well-known fact that the majority of small business ultimately fail, usually within the first year. Often it is because the entrepreneur has overlooked one of these vital points that you have so graciously listed for us.
@Riki, Andrew & BiKlops;
I would LOVE to get paid in 2 weeks, but as Andy said, most goverments and as I call them, mega corps, usually pay net 45 – 90. That’s just part of getting global level clients. SAP took 4 months to pay us early this year. Ask.com took 60 days. Four years ago, Boeing was 6 months late. I have learned over time to build a personal relationship with someone within accounts payable in every large organization we service. The long time frames happened when I didn’t have that relationship cemented. Being able to call AP and throw yourself on their mercy is often the difference between getting paid on time versus months late.
That said, if you are doing projects of less than 100k and dealing with smaller clients, net 30 is standard. For example, all our contractors know that we do AR on the 5th of the month. Get your invoices in on time and they will be paid immediately. If you call your client and find out their payment cycles and time them, you can usually get paid very quickly. On the other hand, if you just send them when you feel like it, you are rolling the dice. They are trying to run a business as well.
Thanks for the comments, keep them coming!
@ adrian,
Thanks for the sharp eye, I send Cyan an email asking her to fix it.
Fantastic article! I also give thumbs to Calvin & Hobbs referenced in a biz article.
I know that without the support of my wife, I would not be able to work 9-5 and do freelance blog coaching. Everything I do is for my family, not because I just want money.
@riki,
You make a sound case. When working hourly, a consistent billing cycle, working in tandem based upon a strong relationship will usually provide prompt payment. Its a good system.
=)
Rant on brother.
@Michael:
Now thats interesting. A blog coach. How does that work? How do you differer from a good editor?
I agree – I’d never allow net 30 or longer. It’s totally outrageous. I’ve had some larger clients “expect” that from me, but I’ve always been able to negotiate it down to reasonable terms (i.e. 1 week or half up front, the rest before delivery of final work). I don’t see myself as in the business of extending that kind of credit to clients. After all, in many cases the work is the only leverage we have for getting paid.
I agree this is one of the best articles on Freelance Switch! I have taken alot away from reading this, practice selling yourself and your business really hit home for me, as it was only after i started treating my freelancing as a proper business that i reaped the rewards and am now able to pick and choose projects (and clients).
I love the idea of meeting one new person each day and building a network and i never go anywhere without my amazingly cute Moo business cards!
In regard to the net 30 and net 90 discussion i personally work payment dates into my contract, for larger projects i usually have 3-5 points of payment. I find clients would rather pay in installments like this than in one large sum at the end, it also means you aren’t waiting months to be paid. However for larger companies net 30 or 90 are very common, but its the sacrifice you make for those bigger clients/deals.
Sorry about the links, guys – they’re fixed now! For some reason our links keep breaking
It’s a mystery!
These pretty much relate to any kind of business regardless if you “freelance” or work for a Fortune 500 company.
But is it reasonable to expect to be treated differently from any other supplier, just because you’re small, if all other suppliers of a particular company are on net 30-90?
If it’s your business, then you dictate the terms by which you operate, in the same way that you decide what rates you’re going to charge, what hours you’re going to work, what office space your going to rent and what services your going to provide.
For example I wouldn’t take my car down to the local dealership to have it serviced and then expect to dictate the terms of payment.
These are excellent trips especially the “Studentship, Servantship, Mentorship” piece (so central to my thinking). I think the new urbanites I share information with on my site will appreciate this.
@riki:
The bigger your business, the better your chances of being able to dictate or at least negotiate terms.
Take your example. With just a single car, the dealership is the bigger player in the relationship, so you need to accept their rules.
Now say you have a FLEET of cars that need service. Suddenly the relationship tilts to your favor and you can say that you want to be billed and will pay in 60 days. If the dealership wants that big of a customer, they’ll give you your terms or at least negotiate with you about them.
Excellent Article! I plan to refer to it often. I especially like the idea of meeting one new person a day (tip #1). I need to work on this.
Also, I bill all of my clients Net 30. I ask for a deposit on most projects, unless it is very small or requires a quick turnaround (and I know the client well). For larger contracts with installment payments, I will discuss and determine the payment terms during the initial negotiation. I have one larger client that pays Net 45.
I offer an online payment option to all of my clients (most of the small business clients prefer this option to writing and mailing checks, none of my larger clients pay online). I believe that since most of my work is currently referral-based, I haven’t had any issues w/ non-payment … except that one time.
Hi Andy, I understand your point, but don’t agree
I have one client that is a conglomerate of five companies and I dictate my terms of payment to them as I would any other client.
It’s the same deal for the lady across the road who does my dry cleaning. She has no problems negotiating her terms of payment.
GREAT POST! It’s also great to see that I have some one so accomplished living in my city. I look forward to finding you at Firefly.
I am actually watching a John Maxwell video series on leadership at the moment. He is very good!
@Jermayn – which series?
@Housang – damn right – also check out lulus & octagon, and coffeecat in sv.
@Riki – it probably has a lot to do with leverage. ACH payments sped things up enormously since we no longer wait for checks. I still have a hard time believing that a world conglomerate such a Microsoft would bend its standard AP policy for you, but if you really can do it brother, please send cyan an article! I’ll be the first to read it and apply your techniques.
@John – your statement of fairness if a good point and I hear that.
@ Shane – I don’t have any 100k projects from Microsoft or Boeing under my belt, but I have dealt with a decent range of clients from the business/legal world that enjoy playing hardball to large ad agencies, corporate and government funded institutions. But I don’t seem to have any problems getting accounts paid on time.
I think if your delivering a quality product, and you’ve put yourself in a position where people depend on you, it gives you the power to negotiate. I always believe in acting from a position of strength. Meaning if the balance of favour is tilted against you. Do something about it when your resources are up. Most clients will respect your terms if you operate within a set business framework.
I can understand that there are going to be occasions where it comes down to a choice of accepting a job on the clients terms or turning it down. But I wouldn’t advocate 30-90 days as being the acceptable norm for all clients.
Given the choice above, I would turn it down without a second thought. The prospect of doing three to six months work and then waiting another three months for payment, is not an option I would consider.
I loved this article…I’ve promised myself…I will help others with their business, FREE OF CHARGE! I’ve been writing and publishing for 20 years, and just started my own freelance business. I tried to find a mentor who is successfully running their freelance business and was quoted fees. Anything from $75 – $150 per hour just to talk to a fellow freelancer about their business and how I can get mine off to a good start? I couldn’t believe it. I’ve already been published and I have great clips. All I need is help with the business side – making your website work, how to blog correctly, how to best network for clients – and not one person I asked wanted to just help. To mentor someone wanting to learn. I swore to myself that when my business takes off (and it will), I will help anyone who asks for it. I will help them as much as I can, and NEVER charge a penny for it.
http://www.martinpenny.com
Regarding the whole payment terms question: I don’t think it is so much a question of how big or small the organization is (you or them). I think it is a question of needs and wants.
How important is their business to you? If it is very important to you, then you are more likely to accept the terms that they require. How important is working with you to them? If they prefer you to others, then they may be willing to bend.
My terms are net 10 days. I have one mid-sized customer in the construction industry who is paying vendors 90 or 120 days out. However, I have explicitly stated that this will not work for me; I’m not willing to carry their debt on my books that long. I like this customer’s business, but it isn’t so important to me that I’m willing to wait. They have agreed to pay me on my terms. (About 50% of the time I have to inquire after an additional week, but I’m still getting payment within 30 days.)
In this situation, the customer sees me as a more affordable and responsive option than other vendors they work with, so they are making an exception to their terms.
Thanks for the tips. I struggle the most with # 1 – Practice Selling Yourself. That’s going to be my new goal for this year.