4 ways to increase revenue streams, by Raubi Marie Perilli

If you’re having a difficult time reaching revenue goals for your freelance or consulting business, it’s time to take a good look at your sales strategy. You could be making mistakes that are leaving money on the table. But before we look at those mistakes, let’s look at strategies that can help increase revenue streams.

4 ways to increase revenue streams

You can increase revenue streams by increasing one or more of the following:

  • Customer base
  • Transaction size
  • Transaction frequency
  • Prices

The mistakes holding you back could be tied to missing opportunities in these areas.

By identifying and resolving the following four errors, you can begin to increase revenue streams and start hitting your income goals.

1. You aren’t attracting new clients.

More customers mean more income. So if you want to see a rise in your income, bring in new clients. You can attract new clients to your freelance or consulting business with the following strategies.

Use what you know about past clients to attract new clients. Go through your current client roster and determine how you attracted each client. For example, if they were brought in by a speaking engagement, see if you can find more opportunities with a similar audience. If they were acquired through a guest post, see if you can post on the blog again.

Produce educational content. Freelancers and consultants can find more clients by providing value to their target audience before they become clients. By producing free educational content (via blogs, webinars, in-persona seminars, etc.), you can introduce your skill set and show off your knowledge to potential clients and lead them to working with you.

Ask for referrals. Your past customers are a great resource for finding new customers. Reach out to former or current clients and let them know you are taking on new clients. Also, consider giving them a discount or incentive for referring new clients to you.

Increase Revenue Streams Podcast
You can increase revenue streams by producing educational material, like podcasts and eBooks, that will appeal to potential clients.

2. You aren’t increasing the size of sales transactions.

Another way to increase revenue streams is bringing in a larger fee for a single transaction.

Getting your clients to spend more when they do business with you will bring in more income.

 

To increase transaction size, consider doing one or more of the following.

Develop complementary products. Consider what else your customer will need while they do business with you, and provide it as a service. Upselling a complementary product or service when you have already attracted a customer is a smart way to bring in more revenue without acquiring more clients.

Create packages. Make the value of the complementary products easy to see by bundling them into packages. Also, discount products and services when they are sold in a package to give clients an additional incentive to upgrade their purchase.

Offer discounts or bonuses for reaching a certain price point. Encourage clients to spend more by rewarding them for doing so. Offer a free bonus for spending a target price point or give a percentage discount for purchasing a large volume of services or items at one time.

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Freelancers: New Year, New Rate? by Lisa Strickland

It’s that time again; the time when you break out a shiny new calendar, look back at the year that is winding down, and ask yourself the freelancer’s perennial question, “Should I raise my rates this year?”

The Freelancer’s Conundrum

When you are trying to establish your freelance business and attract new clients, you may fall into the trap of charging less than what your services are actually worth in an attempt to get a toehold in your niche. While that is understandable, it can be a recipe for freelance disaster. Seth Godin observes:

“Someone else is always willing to go a penny lower than you are, and to compete, your choices get ever more limited. The problem with the race to the bottom is that you might win. Even worse, you might come in second.”

Undervaluing your work affects your bottom line badly and creates a huge source of stress. Freelancers Union points out:

“Most people do better work when they feel that they’re properly compensated. In fact, research says feeling underpaid is the leading cause of work stress! You may actually do better work because you raised your rates.”

Fortunately, if you originally undervalued your worth to clients, that does not mean that you have to keep doing so. Rates are, after all, not set in stone.

Your inner naysayer might be whispering, “If I raise my rates, I will lose clients.” This is by far the most common misconception about increasing rates that freelancers hold. The reality is that your clients do not exist in a bubble. By and large, they understand that in the natural course of events, rates go up for services rendered over time. If they do not understand this, perhaps it is a good thing to lose their patronage.

 

Why the New Year is Perfect for New Rates

Like many things in life, changing your rates successfully requires good timing. The New Year is a perfect time to raise your rates. Why?

  • The New Year is a natural time to rethink all your business goals and objectives, including remuneration.
  • Clients are more likely to accept changes in rates at the beginning of the year, as it is also the beginning of the fiscal year for many of them.
  • Every year that passes, you increase your experience and skill level as a freelancer, which should be reflected in your pricing model.
  • Clients with whom you have built a relationship for more than a calendar year are likely to continue using your services even if you raise your rates modestly.

 

How to Set Your Freelance Rates Appropriately

Once you decide to raise your rates, you can rely on several factors to help you to price your services appropriately. The first thing to remember is that pricing is fluid. For freelancers, the going rate for a project is determined by multiple factors such as skill level required, experience, value to the client, geographic location, and more.

Do not neglect to also factor in the rate of inflation in your area. Freelancers who forget about inflation find their profit margins dwindling year over year. At some point, working for the same rates over time leads to significant financial loss.

The Guardian reports: “The Association of Independent Professionals and the Self-Employed (IPSE) recommends taking your equivalent earnings as an employee and adding a third, which accounts for the added costs that arise as a freelancer.”

The Freelancers Union gives the following guidelines to help you set your rates:

  • Even if you do not plan to charge an hourly rate per se, determine how much time it actually takes you to complete a project on average. For your own purposes, set an hourly rate that you will use as a baseline when giving clients a project rate. In general, you can determine a ballpark hourly rate by adding annual profit, annual expenses, and annual salary, then dividing by billable hours.
  • Account for any supplies and other expenses, including overhead, that will be incurred in the completion of the project.
  • Build in a specific target profit range for each project.

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Getting Paid, by Rachel Fulginiti

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This week I received a delightful and unexpected gift. I got paid for a job I thought I’d gotten burned on. Let me backtrack. My business is divided into two parts. There’s the agented side of things: I audition for jobs with my agent (s) either at home, in their office or at casting places and when I book a job they send me to the studio. These are the “Cadillac Jobs”. Kushy and smooth. I am just a voice for hire. I go into an awesome studio, record for a half hour and then get a check sent to me a while later. No engineering, no invoicing, no call for pickups, (unless there’s another paycheck attached!); it’s pretty sweet.

But to make it as a VO in this day and age, you pretty much also have to have a home-based business, as well. On this side of things, I am not only the “talent”, but also the engineer, as well as the accountant and office manager. Most times, I am also the director and sometimes the producer. Jobs come to me through referrals from past clients, online sites, or by people finding my website.  Someone contacts me about a project, I provide a quote and tell them my policies, they send me a finalized script and I record it, either with them on the line or on my own depending on their preference. Then they may come back to me with one round of pickups. After that the job is usually (hopefully) just another good memory. Next. I fondly refer to these jobs (privately!) as “turn and burn”. No disrespect, they’re great. I get paid, complete the job quickly and it’s wrapped up nice and tidy with no unnecessary time and energy lingering. Everyone’s happy.

To this end, I always ask for payment up front, especially the first time I work with a client. I didn’t always do that, but I learned the hard way. Many times, clients seem to magically disappear after they get what they need, and understandably so; they are typically on tight deadlines and still have post production ahead of them. A few times I was stiffed completely. More often, I would eventually get paid, but it might take months and months…and that meant months and months of me following up with them, sending gentle reminders, more terse reminders…you get the idea. The whole process was a hassle, uncomfortable for me, a time suck and just plain not fun. So, I decided to adopt a policy that was in place at a corporate job I had years ago.

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How to Avoid a Small Business Audit By The IRS, by Brendon Pack

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During tax season and throughout the year, IRS agents carefully review every tax return that comes across their desks. However, agents take a second glance if they catch something on a return that seems abnormal. This may result in an IRS auditduring which the IRS contacts a taxpayer to clarify certain information.

The IRS audit process varies based on the extent of the information needed, and an audit can be for an individual taxpayer or a business. Taxpayers typically receive an audit notice in the mail to begin the process. Or, an auditor may visit your business in person to examine certain financial records. It can take several months – or even a few years – to fully resolve an audit.

If you’re wondering how to avoid an IRS business audit, use these tips:

1. Adopt a formal entity structure for your business.

If you work as a sole proprietor, the IRS will likely give your tax return some extra attention automatically. So, why not set up a formal LLC or corporate entity? Doing so can give your enterprise more credibility, allowing you to claim deductions and other tax-saving measures without fear that your activities will be examined more closely. Simply registering a formal entity for your venture can help reduce your risk of a small business tax audit.

2. Always file a completed business income tax return.

There are many taxes for small business owners to be aware of and ultimately cover on their IRS returns. After your income tax return has been completely filled out from top to bottom, review it with a keen eye. Be sure that every line that is applicable to your business tax situation is filled out completely and correctly. If you send an incomplete tax return to Uncle Sam, the IRS may question why you failed to disclose certain information on your return. This could trigger an audit.

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