As the end of the year approaches it’s a good idea to look over various aspects of your business and do a sort of annual report. When you’re working day to day it’s hard to see the big picture so it’s important to step back once a year and make any necessary changes to how you run things. One of the key metrics to look at is seeing where your money is coming from.
Most freelancers, especially ones starting out, do a variety of different jobs. For example, my income comes almost exclusively from architectural and editorial photography, and fine art print sales. Throughout the year I track jobs in Excel and assign categories to them. This makes it easy to look over and see where what percentage of my income comes from what category. The reason this is important is that it allows me to perform an 80/20 analysis.
If you haven’t heard the term before, the idea behind the “80/20 rule” is that 80% of results come from 20% of work. In this case it would mean that 80% of your income is a result of 20% of your outreach efforts/clients. This is of course hypothetical but the key take away is that by figuring out what types of jobs generate the most income for the least input, you can refocus your efforts to finding more work like that and cutting the jobs that take up a lot of your time with minimal results.
By looking over your various income sources throughout the year you can quickly gage what needs your attention next year. Perhaps you should cut down on event photography and spend that time looking for commercial gigs. Or maybe headshots were really profitable but sending out all those mailers for editorial work wasn’t worth it. Just because something isn’t generating a lot of income doesn’t mean you should drop it, especially if it’s something you really want to do. But if year after year your swimsuit photography business isn’t worth the work your putting into it perhaps it’s time to focus on something else.
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