Key Performance Indicators (KPIs) are defined as a method to measure the success of a business or a process. KPIs enable you to keep track of both long-term and short-term developments, enabling intervention and effective time management.
Freelancing is a flexible, prosperous career, in which number-crunching is an integral component in one’s success. ‘’Going with the flow” isn’t going to cut it, you’ll need to define smart indicators.
KPIs are defined as a SMART technique. They must be Specific, Measurable, Achievable, Relevant and Timely.
There are a number of ways in which you can measure and monitor success. Profit is one measurement, but it isn’t necessarily the most important.
Within this blog, we will outline four essential KPIs freelancers must monitor.
KPI’s for Freelancers
Profit is a key indicator of how successful your business is. Importantly, profit is different from your total revenue. Profit is the money you take away, following expenses and tax. Consistently monitoring profit can support your business in a number of ways.
For starters, monitoring your profit over a period of time can support conclusions on how your business is developing. Furthermore, it enables you to predict your finances long-term and identify your most profitable months.
Managing your own invoices might feel daunting, but there are a number of app’s and softwares on the market that can help support you.
Whether you’re planning to work as a freelancer for the short or long-term, it’s important to monitor and measure your growth. Avoiding such a task might incur a negative correlation.
Your success is determined by your growth. If you’re looking for an increase in growth, try to keep it in an upwards year-over-year trend. You can measure your growth by dividing profits on a monthly or yearly basis.
In the event in which you’re content with how things are going, you should still measure your growth, this will ensure stability and account for inflation and changing expenses.
Measuring your hourly rate as a freelancer is a good idea, regardless of whether you’re charging clients by the hour, by parts of the project or a complete project fee.
In order to calculate your hourly rate- track the time you spend on a task, add up the hours when you’ve finished, and divide your profit by those hours. Across a number of clients, you will likely end up with a range of hourly rates.
Inevitably you will have certain clients who take up a large proportion of your time but don’t contribute that much financially to your business. Ideally, you want to exchange these sorts of clients for those that pay well for your time and services, this will benefit your business long-term.
Through utilising metrics you can underpin what social media marketing is doing for your business. Comparisons are essential, if you’re using Facebook to attract clients, how many clients are you acquiring through this platform? Compare that to, for example, how many you acquire through freelancing websites.
Furthermore, what kinds of clients are you acquiring through particular platforms? Observe the trends, understand what platforms provide your ideal clients. This will allow you to adjust your strategy accordingly.
KPI examples you could evaluate regarding your social media marketing include:
- Traffic to your website via your social media campaigns.
- Spend-per click (if you are running ads).
- Follower growth.
- Engagement (how many of your followers interact with your posts?).
- Direct messages received from potential leads.
In summary, KPIs can help you determine what’s going right or wrong with your business, enabling you to act upon the data. Number crunching provides a crystal-clear perspective, enabling you to prosper in the business of freelancing.
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