Last year I posted about my first experience of writing an annual report for my freelance business. I found the exercise invaluable for the clarity it gave me, so clearly I was going to repeat it this year. In doing so, I reflected on last year’s findings and added some more topics, and the result was even more helpful and inspiring than last year’s.
This post is therefore a kind of update to last year’s, but this time looking in detail at what I actually put in my freelance annual report for FY21/22. It gives you a run-down of everything I reported on – plus some sneaky-peeks at my results – and how I plan to use the information over the coming year.
But first, a quick proviso: I report on a lot of areas because my systems make it easy for me to collect the necessary data. You don’t necessarily need to report on all of these areas (and you will likely have some totally different ones that are more relevant to you). The key is to pick whatever topics and metrics that will support your goals for your business and your own professional development and wellbeing.
First, I set down some key big-picture data in my report:
- Total turnover: for me, healthy, especially given the current financial climate
- Total expenses: down compared to last year, in which I completed a costly piece of CPD (PRINCE2 Practitioner, which I’ll be reporting on in another blog post very soon)
- Overall hourly rate: again, a healthy trajectory
- Expenses by category, split into editing and project management software, other software (e.g. antivirus), memberships, marketing, insurance, physical stuff (e.g. a new computer keyboard with the indispensable functionality of swirly rainbow backlighting) and bank charges
Major wins, learning opportunities and other events
Here I listed all my notable wins and learning opportunities (aka screw-ups) for the year. Happily there were very few of the latter – the main one related to an experience that taught me more about the types of client I do and don’t enjoy working with. Wins included starting work with two exciting new clients, developing a new scheduling system, and migrating my website to a new host to fix a persistent issue with speed.
You might also list world and personal events that affected your business, as a reminder for the future if you want to look back and understand your data in perspective. For example, in last year’s report I listed the details of how exactly COVID had affected my income and working patterns, and how I dealt with this. However cataclysmic or disruptive the event, the exact whens and whys can easily fade from memory when you move on to the next big issue that grabs your attention, so it really is worth jotting them down.
My clients are the foundation of my business, so it’s important to me to understand the patterns in who I’m working with, what I’m working on, for how much money, and how much I’m enjoying it. I look at my client data from various angles:
- Number of active clients (i.e. clients who sent me work): there’s no right answer here; I tend to enjoy close collaboration with a relatively small number of clients, but a wider spread might work better for you.
- Spread of income across clients: I prefer not to concentrate too much income in one client to ensure stability if that client disappears.
- Gained versus lost clients: change is inevitable and clients will always come and go, but it’s important to reflect on why and whether the change reflects what you want from your business.
- Income by client type (e.g. businesses, academic publishers, agencies): where is your work coming from? Nowadays my business model is nicely established where I want it – mostly around non-academic publishers, businesses, charities and the public sector – but I find it helpful to understand how the proportions of these types fluctuate over time.
- Hourly rate by client type: my highest-volume clients don’t necessarily yield the best hourly rates, so I always look at my data from this angle too.
- Overall client value: I’ve written before about how I use bubble charts to visualise my clients’ overall value to my business in terms of three factors: total income, hourly rate and subjective enjoyment. It’s a fantastic way to see snapshots of my progress over time and I was happy to see that this year the three factors had the best balance yet.
Services I offer
In this section I split out my work into the services I offer (copyediting, project management, developmental editing, proofreading for students, proofreading for non-students and consultancy). I looked at the hard data – hourly rate and income. However, I also used this as an opportunity to reflect on which services I enjoy the most, and even which aspects of the services I particularly enjoy (for example, I tend to prefer meatier, long-term project management work where I can really add value rather than seat-of-your-pants fast-track scheduling, although I have plenty of experience of both).
From this analysis I was able to set some priorities for myself going forward and gain clarity on the types of work I want to attract.
Website, blog and social media
This is an area I plan to report on more thoroughly in the future. This year I concentrated on some core areas:
- Overview of technical and textual changes I made to my website and their effects so far
- Number of blog posts published (three: definitely need to do better!)
- Page views (down, but considering I was way off my posting target for last year the dip wasn’t too bad)
- Thoughts on how I want to use social media going forward (like many people, I’ve struggled to engage consistently in recent years, so my plan rests on simple, non-overwhelming actions I can take on a regular basis)
This section was about understanding where my enquiries are coming from and whether I’m being offered the kinds of work I actually want to do. My findings this year were as follows:
- The number of enquiries I received was the highest I’ve had in the past five years.
- More important to me than the bare total is the number of ’yes’ enquiries. These are enquiries where, based on my initial impression of the job, I would have been truly elated to say ’yes’ to the work had all other factors (schedule, fee, etc.) worked out. This year my percentage of ’yes’ enquiries was down slightly from last year but still a healthy 37%.
- My best source of new business continued to be my CIEP directory entry (22%). Interestingly, this climbed to 34% when I solely looked at the source of my ’yes’ enquiries – more evidence (not that I needed it) of the value of my CIEP membership to my business.
- By far the most common reason enquiries didn’t turn into paid work was that I couldn’t meet enquirers’ schedules due to existing work commitments. This tells me that my quoting strategy is sound, as price isn’t really coming into the mix as a reason for work not going ahead. But it also gives me an impetus to continue to hone my scheduling so I can be on the lookout for opportunities to accept more projects.
Non-client work and professional development
This is an area I’ve really been focusing on in the past couple of years. I have a database I wrote for myself in Zoho Creator, and through it I track every minute of my time (paid and unpaid) and what I’m doing (you don’t need specialist software for this as there are zillions of off-the-peg time-tracking solutions). The areas I focused on this year were:
- Total non-client work time: down to a sensible level from a huge peak in FY20/21, when I used downtime from lost work during COVID to redo my website and write the aforementioned database
- Average non-client work time over the past five years (to get a more reasonable figure on which to base my plans going forward)
- Hourly rate when non-client work time is factored in: still healthy despite the huge blip in FY20/21
- Spread of time across activities, split into marketing (including blogging), training, client communications and onboarding, database development and other techy stuff (mostly swearing at my printer), CIEP volunteer work (mostly contributing to the Wise Owls posts), and general admin
In the past, my working habits weren’t always exactly what you might call healthy. This had a purpose for many years and helped me to build my business, but now I want to be a little more moderate and consistent.
So I’ve been making efforts over the past couple of years to focus on projects I enjoy while controlling my evening and weekend work so it stays at reasonable levels for me. Last year I set myself a goal for the total number of hours I wanted to work across the year, and bizarrely I achieved it to the exact hour (and I promise I didn’t cheat and look at the numbers before the end of the year!). This year I did an audit of my working patterns over the past 10 years and was happy to see that my average evenings worked per week and average days worked per week have both dropped to more healthy levels.
What I’ve done with the information in my freelance annual report
Here’s where the magic happens. There’s no point tracking all that data and spending time analysing it if I don’t do anything with it. I’ve therefore set myself some carefully chosen goals for the following year:
- Maintain my profit and overall hourly rate at similar levels: I’ve set some basic financial goals for myself, but I’m not going to stress about them too much in the current financial climate. My main goals (which I believe long term will indirectly fuel my financial goals anyway) are as follows.
- Keep sight of the idea of ruthless balance and protecting my business: I wrote about these concepts here. In the past I haven’t always been as consistent as I’d like with working on my business (i.e. non-client work) rather than in it, so I’m now tracking my consistency on a week-to-week basis with specific (but flexible) time goals based on my analyses.
- Take a more varied approach to my professional development: having come to the end of the large time investment required for PRINCE2 Practitioner, I can now focus on a wider variety of activities. So, this year my goals are to attend the CIEP conference (online), complete the CIEP’s course Copyright for Editorial Professionals, read several books I’ve had on my shelf for a while, and get back to reading blogs and listening to podcasts on a regular basis (so far it’s working well to listen on my walks to and from the gym).
- Do more developmental editing: I’ve long offered developmental editing when requested by existing clients, but I’m increasingly enjoying the mental challenge it offers. I will therefore now be officially offering non-fiction developmental editing and working on how I present this service on my website.
- Publish a blog post at least once a month: writing makes my brain zing but I have been guilty in the past of allowing it to fall by the wayside when I’ve been busy with client work. I’ve recently streamlined my writing process to cut out the bits that made me rage (why can I never think of tags when I need to?!) and am aiming to get ahead with writing posts. Fingers crossed I can therefore finally settle down to a regular schedule.
I’ve also shared my report with my assistant-cum-business-advisor, for two reasons. First, I wanted an objective opinion on my conclusions and goals, to ensure I wasn’t being either too optimistic or too pessimistic. Second, sharing my goals will help to keep me accountable and on track. Involving another person is optional, but in my experience it can be hugely powerful if you pick someone who understands your business and cares about its success and your wellbeing.
I’ll be returning to my report a minimum of once per month to reflect on my goals and progress and to ensure I’m actually following through on my priorities. I’ve also already started a list called ‘Things to report on in FY22/23’ and will be adding to it over the course of this year as new ideas and initiatives strike me.
Writing freelance annual reports into the future
The format, focus and comprehensiveness might change, but this is definitely an exercise I’ll be repeating for years to come (decades if this career sustains me for as long as I’m hoping). For me, writing an annual report as a freelancer is now an indispensable aspect of taking my business seriously – and my own wellbeing too.