Why Every Freelancer Needs An End-of-Year Business Review

The end of the year is approaching. For businesses and corporations, that is synonymous with end-of-year reviews — individual and performance-based as well as company-wide reflections on what worked, what didn’t, and how to plan smarter for the next quarter.

While freelancing means flexibility, freedom, and the ability to set your own schedule, that doesn’t mean your work cannot benefit from a little structure. There are many strategies and tools to be borrowed for the corporate world. Freedom is great, but can too much of it lead to chaos? Established companies have systems that exist for a reason. Big companies run because they review, forecast, and budget consistently. And you should too. The same principles that keep a business profitable can help you remain sustainable.  

Many freelancers struggle with business financial literacy which impacts their overall performance. They also tend to treat their work as project-based rather than viewing it as a full business. That’s right, 42% of small business owners admit they had none to little financial literacy before starting their business. For instance, 51% of freelancers don’t have a separate business account, they deposit their earnings directly into their personal account. On top of that, 38% of freelancers see fluctuating income as one of the biggest challenges they face. 

In reality, running a freelancer business shouldn’t be all that different from running a company. Corporations review performance. So can you. They forecast revenue. You can estimate your upcoming quarters. They budget for growth. You can map out your spending and savings with similar intention

This final quarter of the year, start by conducting your own end-of-year review and use it to build an informed plan for the year ahead. 

As we’ve seen, freelancers struggle to treat their work as a full business. Taking time to reflect on the successes and failures of the previous year is a great way to start treating your business as a business. 

“With all things in life, to make sense of things, to grow and to move forward, reflection in the form of an annual business review is an incredibly powerful tool,” said Helen Rajan, Solopreneur and Business Educator. 

“With the end of the year rapidly approaching, business leaders have likely started to plan for the year ahead,” said Samantha Pratt Lile, independent journalist and business analyst. “But to know where you’re going, it’s important to look at where you’ve been.

That’s exactly where you’re going to start. A year-end business review may sound daunting but it doesn’t have to be complicated. For your first one, you can keep it simple.

Start by looking at how much you earned and spent this year. Note which projects or clients brought in the most income and which ones were stressful or “not worth it.” Check where your time actually went compared to where you wanted it to go. Congratulate yourself for the things you excelled at and encourage yourself to get better for those with room for improvement. 

If your review was the study, then this is the application. Now that you’ve conducted your end of year review, it’s time to apply those findings to your upcoming year.

“Without knowing where you’ve come from, it’s hard to decide where you should be heading,” said Joseph Lucco, VP of Customer Success at ClearPoint Strategy.

So consider the following. Did you see a dip in income over specific months? Build a financial cushion for next time. Did certain types of projects perform better? Lean into those. Use what you’ve learned in your review to make informed predictions and set clear goals for the upcoming year. 

“Freelancing gives you freedom, but the unpredictable income can be stressful,” said Preston Lee, founder of Millo, a platform dedicated to helping freelancers thrive. “With the right approach, you can manage irregular cash flow, cover expenses, and even save for bigger goals.” 

Having a business account from which you pay yourself can truly improve your view of what comes in and what gets spent. It can also allow you to easily track tax deductible business expenses.

“Detaching your business and personal finances is an important step toward achieving financial stability and success,” said Meghen Ponder, contributor to TaxAct. “By separating your business and personal finances, you can keep track of your expenses, income, and profits more accurately.”

Trust in your ability to learn as you go, becoming more financially literate and stable as you grow. Here’s a final tip, implement weekly money dates with yourself. Make it cute with a nice cup of tea, some soothing tunes. This will help you track and adjust as the year progresses so you don’t have to wait until your next end of year performance review.