Freelancers: limit the impact of inflation on your business

Roses are red, violets are blue, advice for living well in times of inflation is very beneficial. Indeed, in 2023 inflation was particularly high. At that time, it is estimated that the average inflation rate was 5%. In 2024, there was a slight improvement in the situation. Inflation should gradually fall to 2.6% around June. Despite everything, this economic situation remains complicated for freelancers. 57% of them believe that customer negotiation is a key moment in their business. While this was already a complicated task, the rise in the price of the tools and services needed for their work to run smoothly contributes to making discussions even more delicate. Are you a freelancer? There are strategies you can put in place to limit the impact of inflation on your business. In this article, Beager gives you the best advice to get through this delicate period while maintaining your purchasing power as much as possible.

Dealing with inflation: our advice for freelancers

Inflation can affect your profitability and make it more difficult to retain customers. To limit these impacts, here are some ideas:

• Raise your rates : To maintain your purchasing power, align with inflation. You will need to make your customers understand that this increase is necessary to maintain the quality of your services.
• Diversify your offerings : Try to diversify your sources of income. Don't close yourself off to different types of customers or different types of services. Diversification can include offering new services, entering new markets, or creating digital products. Many freelancers are currently turning to selling online training courses, according to Statista, this is a rapidly expanding market with an annual growth of 20%.
• Automate and optimize your processes : Invest in tools that automate repetitive tasks and save you time. Less time spent on administrative tasks means more time for rewarding missions.
  
  

Freelancing and inflation: protecting your purchasing power

Once your business strategy is well defined, pay attention to your expenses. To protect your purchasing power, look for alternatives that will cost you the least.

• Follow your finances carefully : Keep a precise budget for your personal and professional expenses.
• Reduce your fixed costs : Do not hesitate to negotiate your supplier contracts and consider changing providers if necessary. Continuously look for discounts or special offers on what you need.
• Save smartly : Build precautionary savings to deal with the unexpected. In times of inflation, traditional savings accounts can lose value. So you should explore options like high-yield accounts or lower-risk short-term investments.
• Use free resources: Online, numerous tools and applications are available at no cost. Trello helps you manage projects, Canva is a great tool for graphic design, and on LinkedIn, a number of content creators offer you prompts to use the full potential of ChatGPT.

Any other approach: you can also optimize your taxation! Take advantage of the tax deductions available for freelancers. For example, business expenses, such as travel and equipment expenses, are often deductible. Consult a chartered accountant to make sure you take advantage of all tax opportunities.

Freelancers: forecasting the unexpected in times of inflation

As a self-employed person, you do not benefit from any coverage related to unemployment,

your pension plan is not the most advantageous and you work under tax legislation that is often fluctuating. In these conditions, an unexpected event can have a significant impact on your business. It is therefore important to anticipate potential financial problems. Good news, measures are making it possible to get there. Among them:

• Appropriate insurances : Take out specific insurance for freelancers, such as professional liability or supplementary health insurance.
• Solid contracts : Ensure that all of your projects are covered by well-written contracts. Include advance payment terms and clear cancellation conditions to protect against disputes and late payments.
• Setting aside reserves : Maintain a financial reserve dedicated to professional contingencies. This reserve can cover periods of no income or unexpected expenses, thus ensuring financial stability.

Only 30% of freelancers have an emergency fund. Those who do not benefit are the most vulnerable in a situation of inflation. Indeed, inflation makes forecasting spending more complex. For this reason, it is particularly advisable to build up an emergency reserve. Ideally, this reserve should cover at least six months of current expenses. In addition, we also advise you to stay on the lookout for economic issues to keep up to date with developments and trends in your sector. By monitoring, you will be able to anticipate price increases and react quickly to market fluctuations.

Freelancers: managing off-peak periods during inflation

In the game of freelancing, you have to do according to your cards at your disposal and sometimes, you come across that of the off-peak periods. Not very funny to live with, these periods result in:

• From a difficulty in finding a new mission
• From a saturated market or losing momentum
• Or the accumulation of unpaid invoices from customers

To prevent them, here are our tips:

• Prospecting new customers all the time
• Monitor market trends and anticipate changes
• Diversify your business and customer portfolio
• Protect yourself as much as possible from unpaid bills
• And capitalize on periods of activity

Also consider extending your professional network. You can participate in networking events, join online communities, or engage in collaborations with other freelancers. According to LinkedIn, 85% of professionals find opportunities through their network.

As a freelancer, your privacy is directly impacted by the state of health of your business. In this situation, coping with soaring prices is a major challenge. Mitigate the effects of inflation by adopting Beager's advice. Proactive behavior remains the best way to ensure the sustainability of your business. Remember: adjust your rates, diversify your income, plan for the unexpected, and effectively manage off-peak periods.