KPIs, or key performance indicators, are a method of measuring the performance of a process or a business. In this article, we’ll look at specific KPIs for freelancers and how to use them effectively.
As a freelancer, you may gauge your performance in a variety of ways. The amount of money you receive is one factor, but it is not always the most essential.
Other considerations you may wish to consider are:
- How many clients you’re getting
- What you’re earning per hour
- Effectiveness of your marketing efforts
Going with the flow isn’t going to cut it if you want your business to succeed. To truly track progress, you’ll need to establish intelligent indicators.
Continue reading to understand more about KPI indicators, including Excel Dashboard examples. If you’ve already looked up “KPI meaning,” you’ll know that this abbreviation can indicate a variety of criteria, including:
- the number of customers you managed to acquire,
- what you are genuinely earning per hour of work,
- the effectiveness of your promotion efforts, etc.
So, what exactly is a KPI? A KPI, or key performance indicator, is simply a method of measuring the performance of a process or a business.
Using KPI is a fantastic technique to measure your organization’s growth efficiently. KPIs are simply meant to track long-term and short-term trends, allowing you to intervene if a specific region isn’t performing as expected. It will assist you in determining whether you are devoting too much time to something that is not worthwhile.
The SMART approach is used to define KPIs. These must be Specific, Measurable, Achievable, Relevant, and Timely, as this is the only method to track its progress.
KPIs for Freelancers: 4 Ways to Track Your Progress
Profit is a clear sign of how well your company is doing. However, profit can fluctuate significantly from total revenue. After taxes and business expenditures, profit is the money that goes directly into your pocket. Measuring your profit can usually help your business in a variety of ways.
For one thing, it assists you in identifying so-called “famine seasons,” or months when you have a minor job and earn less money. Furthermore, it is a fantastic indicator of how your firm is evolving through time.
If you find it difficult to measure your income monthly or yearly, you may want to consider using a financial app or program to make tracking this KPI much easier.
To truly understand how well you’re doing in the long run, you need to track growth. Profits can be divided on a monthly or yearly basis to calculate this. When you know how much (or how little) your company has grown in a year, you may determine what to do with that information.
If you want to see more growth, attempt to maintain an upward year-over-year trend (monthly values tend to be too skewed to be helpful in this case).
Maybe you’re pleased with the way things are going and want to keep them that way – you should still measure growth and strive to keep it flat or slightly upwards to account for inflation and shifting expenses. Failure to do so may result in negative growth being ignored until it is too late to intervene.
Hourly Rate for Each Client
Whether you charge clients by the hour, project sections, or whole project price, measuring the hourly rate is a good idea.
Tracking the time you spend on anything, adding up the hours when you’re through, and dividing your profit by those hours is a straightforward way to do so. You’re likely to wind up with a relatively wide range of hourly rates if you work with various clients.
Clients who pay you the most for your time and services are at the top of that scale. Every freelancer will have clients who take up a lot of your time but don’t contribute much money to your firm.
Ideally, you want to swap the types of customers on the bottom for clients on top. Rinse and repeat after a given amount of time, say one or two years, for consistent growth in hourly rate and, subsequently, profit.
Last but not least, by utilizing the preceding and different indicators, you may determine what your social media marketing is genuinely accomplishing for you. How many clients does Facebook bring you if you use it to gain new clients? Compare that to how much you can earn utilizing freelance websites, for example.
Furthermore, what types of clients do you acquire through that channel? If they are usually at the bottom of the hourly fee per client range, you may want to reconsider your strategy or abandon this aspect entirely.
Here are a few key performance indicator ideas to consider for your social media marketing:
- 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
However, we underline the need to take a more in-depth look into social network KPI indicators. You may be inclined to overestimate the importance of specific characteristics.
Some of these metrics are referred to as “Vanity KPIs.” The amount of followers or likes, for example, fits these criteria. This information is far less essential than the number of leads or traffic generated. However, many people place far too much emphasis on these factors.
The examples above are just a few of the ways you could use key performance indicators to track the success of your organization. In reality, many factors might assist you in efficiently measuring and evaluating your growth.
Other types of KPIs include:
- Customer acquisition costs (i.e., how much you’ve spent on advertising measure against how many customers you have acquired with these methods)
- Funnel drop-off rate (how many potential leads leave your website’s sales to funnel without converting)
- Inventory turnover (this only applies if you sell physical products as a freelancer)
- Marketing outside of social media (SEO, PPC, etc.)
- Leads generated/converted into clients
- The average number of hours on onboarding clients
What Key Performance Indicators Should I Use to Monitor Growth?
Choosing which of these KPI examples to employ to track your company’s growth is primarily dependant on your goal.
Of course, from a company standpoint, tracking your financial growth through profits, cash flow, and hourly rates makes the most sense. As a result, you should concentrate on financial KPIs.
However, after financial development is no longer a top concern, you may decide that analyzing factors like efficiency (time over money), customer satisfaction, and conversions are .better approaches to tracking your firm’s performance over time.
Finally, understanding KPIs indicators is a critical first step.
To summarize, KPIs can assist you in determining what is going correctly or wrong with your business and acting on that data. Every freelancer does it instinctively, but crunching the facts will provide you with a clear perspective, free of excuses and rose-colored glasses.
Source: Map of Freelancers
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