With the financial world in extreme crisis and various government running around in what can only be described as blind panic, one would could be forgiven for joining the mass panic. Granted that when the world economy does slide into recession that it is going to be tough generally.
However having been through three down turns I can give a few pointers that maybe helpful in these times of crisis. Particularly for people in Australia and New Zealand:
First off, stop and consider anything you are going to do with a long term view point. You know that share markets go up and down. Remember the sun will come up tomorrow, you still have your health (well I hope you do) and you will still have the skills you had yesterday. Yes sure this one is very severer, combined with the fact that we are no longer living in a world where there is a separate regional economies. The world is now one large global economy. The interesting aspect of all is that this could be the first recession of the hyperconnected age. It will be interesting to see where people place the value of the web in household budget.
Now you know that things are going to be tight. Clients are going to be late in paying. The cost of software, books and equipment is going to go up. You know these are a given. So it’s time to be a little more conservative. Yeah that means cutting back a little on those geeky gadgets. But trust me you may need to. Also look at the software and hardware you are using, do you really need to move up to Adobe CS4 (for instance), maybe there is a cheaper alternative. I know in the downturn in the early nineties I had a very close look at what software and hardware I was using and its cost. Now one area you shouldn’t cut is education and professional development. To do this will mean you find yourself behind the times when the recession lifts. So try and keep the conferences and networking going, even if you don’t have the latest phone.
Last in First Out
As a freelancer there is the temptation to go run and hide; taking up full time employment at the first sign of a recession. If I where you I would very strongly consider the following points before you did this. When a firm fires someone they generally look at the people that have joined recently, mainly because these people are usually not fully integrated in the team yet and they have no real emotion attachment to that person, plus the payout is usually less. The last person in would be you. So just consider this unless you manage to grab a government position you may just be back where you started, but with no client base.
If you are still thinking about bailing from freelancing then consider long term contracting. In some of the previous down turns I did from time to time take up a number of longer term contracts (1-2 years). Now these are ideal if you can win them, as they give you a constant cash flow. The work maybe a little mundane, but if you are savvy you will leverage the quiet times to improve your skills or even branch into new areas.
Consider Post Graduate Study
Sometimes it’s a good idea if things are really going pear shaped, and you can afford it, to go back to full time study. Maybe do a Masters or the like. Sure this does have the problem of the University fees bill at the end of it all. But you will have a shiny new post graduate qualification at the end of it all, just in time for when things are on the up and up. The secret is to pick the right subject to work on that will maintain your skill set or better yet enhance it. Traditionally the market is very conservative when it comes out of a recession, so they tend to look for the people with the bits of paper.
This is very topical for Australian and New Zealand. Now if the exchange rate is favourable for prospects in the UK and US, then you really should be considering looking for clients overseas as well. Now I would also be only be considering working with teams made only of people from places with a comparative exchange rate. So I would build the team locally to do jobs overseas. Sure they will have a depressed market, but if your prices are half that of the local (overseas) freelancer you are bound to get some interest.
Web Sites are Cheap
Developing, design or realigning a web site is a cheap form of marketing. When times get tough the bigger ticket items in terms of marketing budget tend to fall by the wayside. But the web is in relative terms a low budget item, so in many cases it will remain. Also traditionally in tough economic times big business does suffer. But it is the medium to small business, because of their agile nature, is able to survive. Improving their web service is often a good way for these businesses to get the jump on the big end of town.
As times get tough I would be researching any client or agency that comes to you to ensure that they have the money to pay. If you are in the slightest bit suspect, I would be asking for 80%-90% up front. For the bigger jobs maybe a credit check is in order. On the reverse side, cut your payment cycle down to say 14 days, this way people will stretch it to 30 days (back where it was). I would also be very pig headed with late payers. Ring them every day when it is late, don’t email them, ring them. Ask them when you are going to be paid. If they say tomorrow, then tell them you will be ringing tomorrow if it hasn’t arrived. And do just that. This works well if they have a separate accounts section, Also don’t talk to the person processing, take it to their management. You get the gist, get tough it is your money.
Freelancers are not Employees
Speaking from experience, employees are expensive when the times are tough and they are just sitting around not earning you a dollar. But freelancers on the other hand only work when you have a project and hence are a lot cheaper. Plus they come with all the costs up front. This is great for a business that is finding it a little tight. So in some ways Freelancers are preferred in times of a recession as they are generally cheaper for the speculative ups and downs of a fluctuating marketplace.
Australia is not the US
Finally remember that Australia (well from my view) is not the US. While our economy is still part of the global share market and the rollercoaster that is associated with that. From a private business and government view our economy is a lot more stable, and doing very well. Yes times maybe be a little tough. But we have the capacity and innovation to weather this better than any country in our region, if not the world. Let the US panic, we can just sit here with our beer be all chilled and relaxed. We just have to think a little outside of the square. But Isn’t that what we are good at.
So that’s a short list of things to consider, I’m sure you have a few things that you do when times are a tough as well, why not share them.