It seems like everyone is turning to freelancing! Around half of us in the States are expected to be self employed by 2020.
And if you are planning to be one of them, you don’t need to worry that you have missed the boat. In fact, you are at a huge advantage if you are still preparing to make the leap into freelancing…..
Because you can see where everyone who went before you went wrong. That is the goal of this post – to help you dodge the common mistakes, with these 14 ways to prevent falling into freelancing start-up pitfalls.
We have to admit that there are lots of potential trip-hazards. And yes, we have stumbled on many ourselves. Luckily for you we are not too proud to use our experience to shine a light on these so that you can be prepared.
1. Be Absolutely Honest About Your Financial Needs
When deciding to leave traditional employment to start a freelance business you have to be absolutely honest with yourself about your financial needs. This is of course far more important if you are supporting a family, but regardless, we all have bills to pay each month, and bankruptcy is not a pleasant thought.
Start by tracking your monthly flow of cash so see how much you spend, and identify what is imperative and what can be sacrificed. Once you have listed your NEEDS in detail you can identify the minimum salary that you must bring in each month.
You can use a resource such as Mint to help you to see exactly where your money is going each month.
When you start out, and income is not consistent, it can be wise to save anything above this figure for leaner months. Yes, being a business owner is about being wise. It is also about learning hard lessons – so we will leave it at that.
2. Analyze Your Salary Accurately
A common mistake that new freelancers tend to make is under-charging for their services. This leads to the crazy bidding-wars where a busload of freelancers are fighting one another to be the lowest priced to offer a particular service. Not pretty.
Do not be tempted into this.
If you feel tempted, please head directly to our Freelance Hustler Challenge, which is free to access. It will remind guide you through this ugly situation, so that you can take charge of sites such as Upwork, and letting them wipe the floor with you.
To remind you not to settle for low pay, just think about what your employer subsidized on top of paying your salary. Overheads, stationary, furniture, medical (maybe), training, pension, taxes, fees, expenses, costs, holiday, sick pay…..etc. This needs to be included in your rate.
Plus think of all of the time you will spend doing the non-revenue generating stuff, such as admin/chasing leads etc. Hmm maybe there is another solution for this though. See point 7 below.
3. Remember Revenue Is Not Profit
Don’t be fooled when your invoice is paid, and your account is flooded with lovely money (positive thinking!).
It isn’t all yours, this is your revenue. You need to set aside everything that isn’t profit. We recommend having everything paid into a business account, and you can draw your salary for that. Hold back around 30% for tax, and if you are hiring an accountant, they will need some of that revenue too.
Also keep in mind that sometimes invoices will be paid late and there may also be lean months. So don’t blow all the revenue – or you will be sad later.
If you want to find out exactly what profit is…check out this fantastically clear video which explains it brilliantly.
4. Ask Your Employer To Be Your First Client
Don’t overlook your current (or most recent) employer as a potential first client. Approach them with a proposal to work with them on a contractual basis, after all, you should know a lot of the pain points of the business.
Be sure to make good use of your immediate network from your recent employment too. This is a gold-mine, don’t waste it.
5. Act Like The CEO
Don’t forget that you are the boss of your company. So that means you have to act like it.
When it comes to clients, set their expectations. Don’t over-promise. In fact, we recommend that you under-promise and over-deliver. That makes you look awesome!
Another boss-kind-of-behavior is to delegate. We will talk about it more in point 7. It’s a good one.
And while you are at it, being all bossy and stuff…we suggest that you charge more and work less. You know your monthly minimum, so make absolute sure that you hit that by raising your rates, and then you have space to breathe.
6. Don’t Try To Service Everyone
This is vital, so read it slowly. Don’t be one of those freelancers who promotes themselves as a ‘writer’ or a ‘web designer’.
Who are they servicing? Absolutely anyone.
What do they write/design? Absolutely anything.
Hmm, jack of all trades…..not actually appealing to any particular client.
This is a common mistake, because new freelancers want to cast their nets nice and wide, to catch all of the little fish clients out there.
The problem is, it can take a ton of little fish to fill a net.
Why not differentiate. Forget all the little fish and make yourself totally and utterly irresistible to the gigantic whale, who could actually break your net, and has needs that are far more specific than all the rest.
Sure, you are no longer interesting to all of the other clients, but by changing your strategy in this way, you won’t need them anyway.
7. Don’t Try To Do It All Yourself
This is one mistake that gives many new freelancers a massive head-ache.
Don’t try to do everything yourself! There are so many roles required to run a freelance business, many of which don’t bring in revenue at all. Many of which you will be rubbish at. Many of which will have you tearing your hair out, stressed and too tired to complete the necessary client work.
What to do? Outsource!
We recommend finding your perfect tribe using a platform such as UpWork.
Don’t know how? Then join our Freelance Hustler Challenge which will give you complete guidance. You can access it for free here.
8. Don’t Limit Yourself To Rigid Hours
When you are freelancing, you are no longer an ’employee’ so don’t get stuck thinking like one. You can be more flexible, you can take time off, but you have to also realize when you need to put in some extra time for your business. So don’t forget that you need to market your services update your skills, send proposals to potential clients and more. You need to keep the wheel turning.
9. Don’t Simply Follow Directions
This is an easy to overlook pitfall – that if avoided has the potential to launch your business up a level. When discussing a project with a client, don’t be afraid to take the initiative. That is what they are paying you for. Don’t just follow the directions that they are giving, oftentimes they don’t know exactly how to deal with a pain point.
So unleash your awesome ideas and creativity on them – think of how you can best serve this client in a way that they may have never imagined. This is a sure way to bolster your reputation and relationship with them.
10. Don’t Say YES To Every Project
Don’t get stuck in fear that you have to complete every single project that comes your way. Freelancing autonomy means that you can say no – and you must say no.
Choose your ideal clients and focus on them. If a job comes up that pays too little, or is a pig of a client, or just doesn’t suit your morals….then you have the option to say no. And you should.
11. Always Communicate Clearly
Strong, transparent communication is absolutely essential, in all stages of dealing with clients.
Put everything in writing if you can. That includes contracts, milestones, project briefs – everything.
When discussing tasks repeat, paraphrase and clarify. Be sure that everyone is on the same page – so that you don’t waste your time or their time. This responsibility is on you.
It can be tricky to communicate clearly when you have to think fast, check out this awesome video by Matt Abrahams which discusses the art of effective spontaneous speaking.
12. Don’t Lose Touch With Clients
Once you have finished a project and the client is satisfied, send a thank you email with a CTA so that they can get hold of you easily whenever they need to. But don’t leave it there. It is a huge mistake to lose touch with clients.
Keep in contact, not by pestering them, but always through adding value. Send them an article or ebook that will be relevant – keep the relationship warm, get to know them.
The great thing about past clients is that they know you and your work ethic (under-promise-over deliver remember) and you know their pain points. Past clients are a huge source of new work for many freelancers.
13. Don’t Blur Boundaries
This is a tough one – especially if your office is based at home. But try not to blur the boundaries with your home and work life.
Yes, this is in contradiction to point 8 above, but one thing that we have experienced for ourselves, is the drop in productivity when you don’t enforce an element of balance in your life.
That means taking care of your health, taking adequate breaks and not sacrificing important family time for work. We use an app called Breaktime that you can get hold of here. It shuts down your laptop to force you to step away for a while…. drastic, but necessary!
14. Don’t Give Up
Finally, we want to encourage you to not give up. Freelancing is not easy, but the rewards are enormous. If you have made a start and feel ready to give up then please check out our Freelance Hustler Challenge. We have put this together for people that are experiencing the frustrations that come with running their own business. It could be the support that you need to breakthrough.
Have you experienced any pitfalls as a new freelancer that we haven’t mentioned here? Or do you have a story about one of the points listed?
Please feel free to share with us below. We would love to hear from you.
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