In today’s economy, finding gainful and sustained employment is extremely difficult. For this reason, many people turn to freelance work. Those with typing skills and transcribing experience invest in a foot pedal and begin spinning straw into gold, working the skills they have into their craft and ever-improving upon it. Often very successful, freelance transcribers run head-long into their own set of problems when it comes to cash flow. Freelance work just isn’t steady enough, unless it can be worked into a budget.
The first step to budgeting against freelance guidelines is to continually assess where you are with your input, your output, and the difference between the two. Should ends meet, additionally monies should be considered gone, deposited for safe keeping until the first bill of next month comes in, no matter how small that bill might be.
Get a Jump on It
Paying a bill the second it comes in is never a bad thing, especially if your only income is freelance work. You may stay tight until your next paycheck, but waiting to pay it off until the last minute could mean losing your electricity, and that means no computer. Pay the bills that keep you in a position to work from home first, because working from home cuts out automotive expenses, gasoline, maintenance and time.
Input and Output
More important than knowing your input/output ratio is having it laid out so that you can actually see it. Whether it’s two documents on the computer or good old pen and paper, write out a list of all your expenses. In a separate file, write out pay-dates, and your minimum monthly salary. If your minimum monthly salary cannot pay your bills, you need another job, or you need to step it up. If you find yourself in a good way, add business transactions to your expense file. Your yield should be six to seven times your out-of-pocket borrowing as a rule.
Add It Up
Divide your yield by the hours that you put into your transcription business. This is how much money you are making per hour before taxes. Multiply this number by forty (hours), and again by .7 (as a rule, monies are taxed by at least 30%) to calculate your weekly income. Multiply this by 4, taking short and Five-Friday months into account. Your monthly income should be twice as high as your monthly cash flow.
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Beth Worthy is the Director of Operations for GMR Transcription Services, Inc an Orange County, California based company that has been providing accurate and affordable transcription services since 2004. GMR Transcription has worked with over 8,000 clients spanning myriad industries and prides itself on its customer service and quick turnaround time. Their services include audio transcription, video transcription, and digital transcription, as well as Spanish and Mandarin translation. Google +