A lot of people think of freelancing as the low-risk alternative to getting a day job. Who doesn’t want to set their own hours, be their own boss, and blog in bed with a cup of coffee on the side? With no day job to tie us down, we can travel the world; and make money from our blog, while we sleep. Right?
But for most freelance workers around the world, that’s not the life we lead – okay, maybe some of it. But there’s a lot of hard work involved; and clients are often very much like employers, but without the health benefits and paid vacation time.
Thus, many workers realise too late that being an entrepreneur in any form, is not the walk in the park they thought it would be. Here are the five biggest mistakes that usually land them in trouble.
1. Failing to Ask for a Fair Price
Perhaps one of the biggest mistakes most new freelancers make is not asking for the right price. This robs not just the new freelancer of income, but more seasoned freelancers as well.
When new freelancers allow clients to low-ball them, they get conned out of making better money. Meanwhile, this lowers the average market value of their services, making it more difficult for seasoned freelancers to command a fair price.
For advice on how to decide on a fair price, check out my post on 10 Factors Affecting How Much you can Charge your Clients.
2. Allowing Bullying from Clients
Being flexible is important as a freelancer, and is one of the main reasons clients prefer freelancers to employees. Freelancers work on more open schedules and are usually reachable even at odd hours. However, new freelancers often fall into the trap of becoming too flexible, refusing to say no even when they know they’re completely out of their depth.
Of course, most clients are reasonable business people, but you can count on some to take advantage of this kindness. For instance, I had one client who paid only on a per-project basis, but wanted me to keep my entire days free – just in case he needed me.
If you don’t set boundaries, clients will set them for you to benefit themselves. Sometimes you just have to say no, even when it means losing their business.
3. No Work Day and No Work Schedule
A lot of freelancers – new and seasoned – make the mistake of thinking:
Well… I work for myself now, so I’ll get up whenever.
This may not seem like a big deal, at first. But if you track your work hours, you’ll realise you’re getting less and less done. It doesn’t matter what time you set as your usual work hours, but have one in place. For instance, if you’re not a morning person, consider setting your work hours from 11AM to 11PM with breaks in-between.
This doesn’t just help define what your productive hours are. It also creates a more reliable schedule clients can count on. Allocating a full 12-hours also helps to ensure they can reach you, no matter what time zone they’re on around the world.
4. Not Saving Money
As I mentioned in, Why I Choose to be Underemployed, one of the main drawbacks of freelancing is not having a steady paycheck. Some months can be really lucrative, and new freelancers often give in to the temptation to spend.
What many don’t know is that lucrative months are often followed by dry spells – so the money evens out. Because of this, saving is important.
In fact, even before you dive headfirst into becoming a full-time freelancer, it would be wise to have some savings at hand. This helps to provide a cushion while you secure clients that pay high and fair prices. This won’t happen overnight.
Full-time freelancers also need to save to pay their taxes, and if you don’t set aside tax money as you go along, you’ll have a tough time paying the IRS or other tax agencies when the money is due.
5. Not Reinvesting
Reinvesting in your business – yes, even your freelance practice – is an important part of ensuring you remain in business. Yet, many new freelancers fail to reinvest profits; and instead, spend their entire disposable income on purchases that don’t benefit the business at all.
This is all great fun until the equipment fails, or you lose your clients to other workers. It’s important to spend at least a small portion of the profits on marketing and promotions, and upgrading your equipment over time. If there are funds left over, consider saving it for a rainy day, in case of equipment failure, or theft.
If you’re interested in more hands-on professional help as a freelancer, check out Alexis Chateau PR to see how we can help.