Every time the year comes to a close, I like to review my business practices and see if the things I'm doing still make sense or if I should make changes. For example, I can't count the number of times I've gotten to the end of a year and looked at my QuickBooks reports and wondered "What? I'm still paying $49/month for that? I thought I canceled that months ago."
Can you relate?
Here is a short list of a few things I always try to focus on at the end of each year—I hope you find some of them helpful. (Also, am I missing anything? Let me know!)
#1: Revisit Your Billing Structure and Rates
When was the last time you raised your prices? Are you still charging the same rates you did two or three years ago? Are you still making a profit? Odds are your expenses have gone up over the past year or two (especially with the insane inflation in 2022).
As New Year's Day gets close, it's a really good habit to review your books for the whole year. If you have a bookkeeper, ask him or her to create a P&L (profit and loss) statement, then go through it with a fine-toothed comb and see how your financials are.
Are you actually making money? You may be, or you may not. Only the numbers will tell. Don't go with your gut on this—look at the reports. One of my business mottos is "data wins arguments," and this is a perfect example of this.
If you've been following along with what I've been writing on Free Soloing, you'll already know that I highly recommend you should be tracking all your time, so if you have a year-end report on the hours you've booked, you should have that in one hand and your P&L in the other hand. Cross-reference them to see how you're
#2: Review All Your Business Expenses
How many "free trials" have you signed up for that you're still paying for? Do you still need the most expensive plan from your internet service provider or phone company? Cell phone companies like Verizon, AT&T, and others are constantly changing their billing structure, and if the plan you signed up for your phone plan a year ago or longer, you should have an account review.
Look at your bill, and go into the phone store or call them and just ask "do I have the best plan?" Many, many times, when I've done this, the person I'm talking to will say "Oh, wow, you have your X plan. We haven't offered that in a few years. We have a new plan with more data (or more minutes) at a lower cost."
Here's the thing: most vendors will not contact you to tell you that you have a bad, old, or outdated plan. It's up to you to find out. Can you save $20, $40, or $75 by bundling your business phone with your spouse's phone? Can you cut your internet cost by upgrading to a better plan with more data, and faster speeds? Believe it or not, the answer is often "yes."
I really mean it, though: this is not something you want to rush. Spend 1, 2, or 3 hours analyzing EVERY SINGLE bill you've spent money on this year. Do you still need that online subscription? Do you have annual subscriptions to services you needed last year but don't need anymore?
Go to a coffee shop, do the research, and you may find out that spending $6 on a coffee will net you hundreds of dollars in savings.
Great example: I am currently paying $160/month for internet at my home office with Cox because that's the only "hard-wired" ISP in my area. I'm stuck with the outrageously-priced monopoly service, and because they treat their customers so poorly, I have to pay a lot of extra money to get the speed I need. But guess what I found out last month? I can get Verizon Home Internet for $50 a month, and I kid you not: it's over three times faster.
That means that if I make the switch, I can save over $1,320/year and get better service. But I only know this because I reviewed my bills and started looking into my options.
#3: Make a list of better habits you'd like to develop next year
Aside from recognizing the things you're doing (or bills you're paying) that you want to stop, what are some things you want to start? What are some things you know that you should be doing but aren't doing? Things like:
- Tracking all your time
- Reviewing your billables every month
- Taking better notes in meetings with clients
- Mailing out handwritten thank-you notes to people
- Going to networking events with fellow business folks in your area
It's good to look at the things you're currently doing and identify the things you want to stop, but it's also good to look at the other side of the coin. Don't just beat yourself up about mistakes you've made or things you've overpaid for... find opportunities for growth and improvement.
#4: Learn some soft skills that are not directly related to your work
I've noticed that freelancers are often pretty good at learning technical skills that show a direct relation to the work they do every day. A web developer might say "I'm going to spend the weekend learning Bootstrap," for example. This is pretty common. But what's not as common is for people who work alone to develop soft skills that may only be indirectly related to their work but can still significantly benefit them.
Man, oh man, public speaking is one of the most commonly-overlooked skills that most people in business should have at least some experience with. I've met many people—even super-technical back-end developer types—who normally sit in front of a computer all day, every day, who will be asked to speak on a particular topic at a conference.
That usually creates fear and panic, and they rush to try to figure out how they're going to survive for 5-8 minutes standing in front of a crowd for the first time in their lives. So there's a lot of stress involved in that, and what's worse, a lot of times, their presentations are often... really bad. Because even if you're a subject matter expert who has been working with the same platform or framework for the past 10 or 20 years, getting up in front of hundreds of people and speaking convincingly on the topic is a completely different skill set.
So why not anticipate that this is going to happen to you at some point in your life, and get some public speaking skills now? I highly recommend it. Good news: there's almost assuredly a Toastmasters International club somewhere in your area that you can join. I was a member of Toastmasters for about four years, and it's one of the best things I ever did.
This is another one. Again, a lot of freelancers are good at their "craft," but really bad at sales (or at least not very good). But sales is a monumentally important skill for people who are self-employed, whether they think of themselves as "salesmen" or not. There are all kinds of ways to learn how to sell better, and it's a highly valuable skill that will actually make you money. Learn to do it better!
Effectively writing down what happened at a meeting is another skill that actually highly developed in the corporate world, but most freelancers I know don't ever pay attention to. How good are you at taking notes when you meet with a client? Have you ever looked into this? Did you know it's an actual skill and there are best practices for how to do it? Many people don't know this, and a lot of people are awful at taking notes. Can you spend a few hours upskilling on this highly-relevant indirect skill? Yes, you can, and should.
#5: Make a list of your best and worst clients
I do this every year, and it's one of the best things I do. It's very easy: just open QuickBooks or whatever program you use to track clients and projects, and rank them by the amount they've paid you this year. Bingo.
Okay, it's not exactly that simple: you can't only take into consideration how much a client pays you. Ask a few other questions about each one of your clients, such as:
- Do they respect me?
- Do they respect my time?
- Do I actually enjoy working with them, and do they enjoy working with me?
- Are they rude, nagging, annoying, or constantly asking me to drop everything and respond to their sense of urgency?
- Do they actually pay on time? Have you ever had payment issues with them?
- Are they easy to get in touch with?
I had a project I was working on earlier this year with a monthly marketing contract, but the client was never available. Any time I'd call, he wouldn't answer, all my emails were ignored, and he was never available for meetings. It was kind of awkward: I had a valid, signed contract with a real, live client that was paying me real money, but it was such a bad fit that I just stopped working for him and stopped billing him. I don't even know if he noticed, honestly, and I don't really care.
I'm not mad at him, but it's clear to me that he doesn't need marketing help right now, and I'm not going to chase him down and force him to answer my calls, reply to my emails, and attend regularly scheduled meetings. So I'm happy to pick things up where we left off if and when he's ready to go again, but in the meantime, I just hit the "pause button" because he's a bad client, at least right now. I have other, better clients to focus on who can have the time to work with me.
So, all that to say "bad clients" aren't necessarily the ones who pay the most; it's a package deal.
Hopefully, you find some of these helpful. Is there anything you do on a regular basis at the end of each year?