Evaluating your freelance business using key performance indicators

1. FREELANCER TIPS Evaluating your freelance business using KPIs You can find more freelancer tips on www.freelancermap.com/freelancer-tips

2. Evaluating your freelance business using key performance indicators A freelancing business has a lot of sides to it. How much money you’re getting is one, but it isn’t necessarily the most important. Other aspects you might want to keep track of include how many clients you’re getting, what you’re really earning per hour and the extent of your marketing’s effectiveness. If you want your business to do well, “going with the flow”isn’t really going to cut it. Using key performance indicators (KPIs) is an excellent way to effectively measure your business development. KPIs are essentially ways to keep track of both long- and short-term developments, allowing you to intervene if a certain area isn’t living up to expectations. It will help you see whether you’re spending too much time on something that’s not worth it. Here are four KPIs to get you started. © freelancermap.com info@freelancermap.com

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4. Profit Profit is an obvious indicator of how well your business is performing. Mind you, profit can be very different from your total revenue. Profit is the money that goes directly in your pocket, after taxes and business expenses. Consistently measuring your profit can do several things for your business. For one, it helps you identify so-called “famineperiods”, the months when you tend to have less work and get less money. Additionally, it’s a good indicator of how your business is developing over time. © freelancermap.com info@freelancermap.com

5. Growth To really know how well you’re doing in the long-term, you want to measure growth. You can measure that by dividing profits on a monthly or yearly basis. If you earned $20,000 last year and $25,000 this year, you get a value of 1.25. Where you want to go with that depends on your business situation. If you’re looking for increased growth, try to keep it in an upwards year-over-year trend (monthly values tend to be too skewed to be useful in this case). But maybe you’re happy with how things are going and would like to keep them that way – you should still measure growth and try keeping it in a flat line or slightly upwards to account for inflation and changing expenses. Not doing so might lead to negative growth being ignored until it’s too late to do something about it. © freelancermap.com info@freelancermap.com

6. Hourly Rate per Client Regardless whether you are charging clients per hour, parts of projects or entire ones, measuring the hourly rate is a good idea. Doing so is relatively simple – track the time you spend on something, add up the hours when you’re finished and divide your profit by those hours. Across different clients, you’re probably going to end up with a decently large range of hourly rates. © freelancermap.com info@freelancermap.com

7. Hourly Rate per Client (Cont’d) On the top of that range are clients that pay you the most for your time and services. On the bottom, every freelancer will invariably have black sheep - clients who take up a lot of your time but don’t contribute that much to your business financially. Ideally, you want to exchange the kinds of clients on the bottom for the kinds of clients on the top. Once a certain amount of time passes, say one or two years, rinse and repeat for a steady increase of hourly rate and, consequentially, profit. © freelancermap.com info@freelancermap.com

8. Social Media Last but not least, by using the previous and additional metrics you can see what your social media marketing is really doing for you. If you’re using Facebook for getting more clients, how much clients does it land you? Compare that, for example, to how much you get using freelancing websites. Additionally, what kinds of clients do you get through that particular channel? If they’re always on the bottom of the hourly rate per client scale, you might want to reevaluate your strategy or give up this particular aspect altogether. © freelancermap.com info@freelancermap.com

9. Social Media (Cont’d) To sum it all up, KPIs can help you determine what’s going right or wrong with your business and act upon that data. Every freelancer does this subconsciously, but crunching the numbers will give you a crystal-clear perspective, without excuses and rose-colored glasses. © freelancermap.com info@freelancermap.com

10. Further freelancer tips available on http://www.freelancermap.com/freelancer-tips Contact freelancermap.com Contact person: Doreen Schollmeier - International Affairs Mail: info@freelancermap.com Skype: doreen.schollmeier Phone: +49-911-37750286 facebook: www.facebook.com/freelancermapInternational Twitter: freelancer_INT © freelancermap.com