Freelancers: It’s Time to Take Stock (And Not Just for Taxes!)

January is here. The holiday frenzy has settled, out-of-office auto-replies are turned off, and a new fiscal year is stretching out before us. For most freelancers, solopreneurs, and self-employed workers, this time of year signals one thing: tax preparation.

However, limiting your annual review to simply gathering receipts for the taxman is a missed opportunity.

Taking stock is about looking in the rearview mirror so you can drive forward more effectively. It’s the moment to turn your numbers into strategy. Here are the 4 essential pillars for a successful start-of-year business review.

1. The Financial Review: Beyond Revenue

Of course, you need to know how much you made. But to ensure the longevity of your business, you need to dig deeper:

• Analyze real expenses: Did you underestimate certain costs last year (software subscriptions, travel, bank fees)?

• Profitability per project: Did you hit your revenue targets? If your revenue went up but your net profit stayed flat, your overheads may have exploded, or your pricing might no longer be sustainable.

• Cash flow management: Did you experience any "air pockets" in your cash flow? Now is the time to plan for a more robust emergency fund for the coming year.

💡 Pro Tip: Don't leave your receipts in a shoebox. Organized bookkeeping is the key to maximizing your legitimate tax deductions.

2. The Client Review: The 80/20 Rule

The Pareto Principle often applies to freelancers: 80% of your revenue often comes from 20% of your clients. Ask yourself the hard questions:

• Which clients brought you the most satisfaction (and revenue)?

• Which projects were energy vampires with low profitability?

• Do you have clients who consistently pay late?

This is the ideal time to clean house. Sometimes, you need to fire a "difficult" client to make space for two new ones who align with your values.

3. The "Quality of Life" Review

We become self-employed for freedom, but we often end up slaves to our own businesses.

• Did you take a real vacation last year?

• Did you regularly work evenings and weekends?

• How is your current stress level?

If the answer is negative, your goal for this year shouldn't be financial, but organizational: delegate better, automate certain tasks, or say "no" to contracts with unreasonable deadlines.

4. Goals: Adjusting Your Aim

With inflation and the experience you gained over the last 12 months, your rates from last year should not be your rates for this year. January is the socially accepted month to announce a rate increase to current clients or to update your pricing structure for new prospects.

Set SMART goals (Specific, Measurable, Achievable, Relevant, Time-bound).

• Bad goal: "Make more money."

• Good goal: "Increase revenue by 15% by launching a new online training offer by June."

Conclusion: Don't Face the Numbers Alone

Doing a business review can be anxiety-inducing, especially when you are already juggling production and sales. Yet, it is the most important management act of your year.

If looking at an Excel spreadsheet or the prospect of tax season gives you cold sweats, it might be a sign that it’s time to delegate this part of your business.

At L&L Services, we help freelancers and small business owners turn their accounting into a simple, clear tool for growth.

Contact us now