Mistakes that Freelancers Make
There are many people who want to delve into the world of freelance, but often there are common mistakes made that return them back to the 9 to 5 jobs.
With some little planning you are able to avoid these mistakes and set yourself up for success.
How to Avoid Freelancer Mistakes
Starting off Without Savings
Finance experts will tell you that you need at least three to six months’ worth of living expenses in savings as an emergency fund. You need to have funds available so that you are able to get the equipment you need and for any other costs involved for your freelancing dream.
You also need to plan ahead and take into account any costs that might creep within the next few months.
Not Defining Goals
You need to know the goals that you aim to achieve by being freelance and also what you need from it. Once you have set your goals, you should create a timeline and check these at set intervals to ensure that you are achieving them. You can also revise your goals as you learn more about the market.
Some of the most successful freelancers worked full time jobs, whilst they were getting their freelance careers going. This will enable you to try out different kinds of jobs and clients so that you are able to determine which ones you like best.
You are also able to make mistakes and fix them. Also you will be able to build that nest egg by setting aside your earnings from any extra work you take on whilst you still have a full time job.
It’s always best to have a written agreement with a client. This will not necessarily help you to recoup money if they fail to pay but they will help to define expectations on both sides, keep honest people honest and to ensure that there are no surprises down the road.
Successful freelancers are able to keep track of their records which include expenses, payments due and received. You can use an Excel sheet and an envelope for receipts or a free personal finance software package.
Wrong Kind of Clients
A good client is one that offers work you want to do and which you are equipped to do and will also work with you to achieve positive results. It should be easy to communicate with clients and they should pay you on time and in full according to the contract.
When you get a client that is not like this then the trick is to not keep working with them, but rather learn from the experiences so you will be able to spot a bad client.
Charging too Much or too Little
Setting prices can be difficult because if you set them too high then you may not get the gig, but if you charge to little then you may overextend yourself.
If you are freelancing in the same industry as your former job then you can set the prices based on this and ensure that your hourly rate works out to be about the same as you were earning when you worked for someone else.
You will need to also calculate the hidden benefits included in your compensation like health insurance, retirement contributions and office supplies. Once you know what you were really getting paid at your old job then you can divide accordingly and bill hourly or by project.