6 Common Mistakes New Freelancers Make
I have had “side gigs” on and off for many years. I’ve been a freelance fashion stylist and a publicist, and I made money from both side ventures. It is almost a completely normal thing nowadays do freelance work on the side of your main job. Some people have such great success with their side gigs that they ditch their nine to five to pursue their freelance trade full time. However, getting started can be a little challenging. Take into consideration these six common mistakes that many new freelancers make and how to avoid them:
Not understanding that you need to promote yourself to your clients.
Hiring a lawyer to write a contract, opening a business bank account, creating a business plan, designing your business cards and setting up that perfect website are all great, but it’s all in vain if you don’t have clients. Creating social media accounts is smart but is a total waste of time if you don’t know how to use them properly to target and engage with prospective clients. Being a new freelancer means learning how to sell yourself and close the deal. Remember, not everyone wants what you are selling so you need to narrow down your search to those individuals who can use your services.
Start with promoting your services within your immediate network. Yes, I’m talking about friends, family, current and former co-workers, and even former employers. Former employers already know you and how you work as well as the quality of your work and could hire you as a contractor.
Reach out to agencies and see if they hire subcontractors. Many times agencies will have a ton of projects and may outsource to someone with your expertise. Even if they may not need you now, be sure to keep in contact with them. If you stay on their radar, chances are they will call you when something comes up.
Not understanding that you can’t take on all clients that come your way.
When you are an employee for someone else, you know that every two weeks you get paid a certain amount and you plan your bills and other expenses around that payment process accordingly. However, when you work as a freelancer, there is no steady paycheck. You need to learn to budget and save for a rainy day. Understanding this is crucial when it comes to choosing clients. Not every client will be a good client and you need to pick and choose well because you don’t want to end up in a situation where you’ve done the work but can’t collect your payment. Just like businesses, a lot of times clients will have their own reputation and if you don’t know them personally, it may be a good idea to ask around about that client to see what kind of person they are. If possible, talk to referrals and other freelancers that might have worked with that person before. There is nothing worse than spending your time working on a project that you will never be paid for. Never underprice yourself. When you are a new freelancer, sometimes you may feel that you are willing to take any and client and work with all types of budgets, but that isn’t at all practical. It should be a priority to get paid what your work is worth–and sometimes that means having to turn down projects.
Not learning the difference between revenue and profit.
New freelancers often don’t take into consideration that there is a lot of overhead expense that they need to pay for. Even if you work out of your home office, you still have a lot of expenses that you need to consider. You may need to purchase office supplies, outsource some of your tasks, hire a lawyer or an accountant, and so on. The point is, the money that you make from clients may need to go right back into the business to assure it’s sustainability.
Not considering the idea of forming an incorporation.
As a freelancer, something to take into consideration is whether or not you should form a corporation. The main reason a person would want to incorporate would be to protect his or her personal finance in case a client would feel a need to sue for any reason. In a perfect world, we wouldn’t have to worry about such things. If incorporation is something you want to move forward with, it may be a good idea to talk to a CPA about what type of business structure will work best for you. Check out this article on the subject by a CPA for more information. As an extra tip, having an accountant to manage your money or managing your own finances is also very important. Remember, your clients aren’t going to withhold taxes for you, so you need to withhold your own taxes. You don’t want any problems with the IRS at the end of the year.
Not understanding the importance of using your time wisely.
New freelancers find it difficult to get out of the mindset of having a boss. When you have new clients, you have to remember that they are clients and not your boss. Sure, clients hire you and can fire you but you can also fire clients if the fit isn’t right. It is very easy to fall into the trap of being treated like an employee by your clients. Sure, you are providing a service for them and you will deliver what they ask for but you are the expert. That’s why it is crucial to set a strong foundation from the start.
- Communicate to your clients how you work before you start work. As a professional, it’s up to you to control how you fulfill your end of the agreement.
- Outsource some of your tasks. You don’t want to waste time doing certain tasks like bookkeeping, bill paying and more. Delegate those tasks so that you can focus on the main project and finish in a timely manner.
- Use your free time to relax. As a new freelancer, you’ll find it very difficult to just stop working. You will feel as if you must work all of the time just to stay afloat. If you don’t take time for yourself, you will burn yourself out. Consider this, without your health you won’t be able to work anymore anyway so be sure to have a work/life balance.
Not understanding the power of networking.
Networking the correct way can lead to nice business opportunities. When it comes to the people you meet, be sure to keep in touch with them. If possible, try to develop genuine relationships that are more than superficial. If they are industry professionals, try to be useful to them. If you can help them out with their business ventures they may feel inclined to do the same. Always have your business cards ready and try to attend as many networking functions as possible. Don’t expect to get clients right away. Rather, have the goal of becoming a familiar face and start planting those seeds. Networking only pays off if you are willing to put in the work. It will take some time to build those relationships but they will be well worth it in the long run. How about you? Are you a freelancer who can share some common mistakes newbies make? Would love to hear about them in the comments below.
Article was originally published on MakingMoneyAddUp.com on March 18, 2017.