Customisable business insurance
Being a freelancer isn’t all lie-ins and lattes. From sorting your own taxes to negotiating your pay rate, freelancing brings a lot of challenges and opportunities with it. If you’re just starting out, you’ll likely be finding your feet. But making mistakes as a freelancer can hurt your business reputation and cost you time and money.
To help you avoid them, we asked expert freelancers what the common pitfalls are, and what they wish they knew when they went freelance. Here are the top 11 answers with their tips.
1. Saying yes to everything
“Don't feel you have to say yes to every offer,” says consultant Louise Jenkins.
“It’s really easy when starting out to say yes to every opportunity that comes your way. I did at the beginning because I felt I needed to get noticed, build up a portfolio and, on a more practical level, get the money coming in. But if I was to start again there are some projects I wouldn’t do. I now focus on work that makes my heart sing.”
If you’re unsure about a client, it may be that your gut instinct is telling you your goals, values or approach to projects aren’t compatible.
“If the client doesn’t feel right when you first meet them, do not take them on board,” says freelance community manager Vanessa Stidever. “It’s super important to enjoy working with your client and make sure your purposes are aligned.”
And if a client immediately asks you for discounts or accommodations that feel unreasonable, you may have good reason to be cautious.
“A client asking you to reduce your fees is a no go,” says Sophie Marsden, founder of LIT Communication. “It's the worst way to start a business relationship and if they're asking for a discount, it already suggests that they don't value you, your product or service. I wish that [when I first went freelance] I knew how to negotiate, stand my ground and be firm with clients. You immediately gain respect this way and it marks the start of a good business relationship.”
2. Not having a rainy day fund
“People presume you can just land high paying clients immediately,” says freelancer writer Francesca Baker. “But it takes time, so make sure you have some savings! But, just because you're starting out, don't think that you should accept lowballing clients. You've got skills and experience that are worth paying for.”
3. Not keeping effective records
“In my first year as a sole trader, I had no idea what I was supposed to be tracking,” says carpenter Richard. “I didn’t keep accurate records of my earnings, I didn’t keep receipts for my expenses, and I didn’t figure out if I should be charging VAT until halfway through the year. It was chaotic and stressful, and I ended up missing the HMRC deadline to file my taxes because I didn’t have the right figures. So from the beginning you need to keep proper records. A Google doc or Excel sheet is fine, just keep it all written down somewhere safe.”
These days, most accounting platforms have expense tracking features and will send you deadline reminders. Check out our guide to the best accounting software.
4. Not taking time off
“I used to think that I couldn't take time out,” says freelance PR Sara Teiger. “It took me too long to realise that I had to factor in taking a reasonable amount of days off each year when I set my day rate. What is the point of freelancing if you don't take advantage of the 'free' bit and actually allow yourself to have a life, too?”
Give clients plenty of advance notice, make sure they have access to relevant files and documents, and – if they can’t wait while you’re on holiday – recommend a trusted freelancer who can cover for you while you’re away.
“I built up a network of other freelancers, so there is always someone I can hand over to if I want time off,” says Teiger.
For tips on connecting with other freelancers in your industry, check out our guide to networking as a freelancer.
5. Not managing your time effectively
When you’re employed, you might have a manager who gives you deadlines and checks your progress. As a freelancer, you may go long periods without your clients checking in. It’s easy to let tasks expand to fill the time available, or lose track of due dates.
The solution? “Time box!” says Stidever. “I can’t stress this enough. And use an app like Toggl to record your time.”
Time boxing (or time blocking) is a simple and effective way to take control of your calendar. Try these practical steps to create a time boxed schedule that works for you.
6. Overestimating your accountancy skills
“Hire an accountant,” says freelance marketing manager Karina Scott. “Trying to do your own accounts and paperwork is a huge pain, so having a professional help you out takes all of the stress away.”
7. Not getting business insurance
A lot of clients will require you to have business insurance, such as public liability or professional indemnity cover, before working with them. The world of freelancing can be quick and cut throat – if you don’t have business insurance when securing work and the client needs someone to start today, they may hire another freelancer who already has the right policy in place.
Not only this, but going freelance means taking sole responsibility for your work and your equipment. If something happened and a claim was made against you or if your kit was lost or stolen, could you afford to enter into a legal dispute or replace the things you rely on to work?
If you’re in the market for insurance, check out our customisable business insurance for freelancers.
8. Not taking downtime seriously
“Building a business is hard work and you will work long hours: people who tell you they built a six-figure business working four hours a week from a beach are not telling you the truth,” says wellness consultant Kate Morris-Bates.
“Schedule time each day to get outside, walk, exercise, meditate and cook healthy food. Manage your sleep like you would a child’s and you will have enough energy to drive your business forward.”
Burnout isn’t sustainable. As a freelancer, you are your own manager, HR head and wellbeing lead all at the same time. So book in breaks before you get busy, and make sure you take them.
9. Not having contracts
“When I first started freelancing, I didn't put contracts in place with new clients,” says Marsden. “It meant that they didn't see any urgency to make payment as there were no fees for late payment. It also meant they didn't give any notice when we stopped working together.”
“Invest in your terms and conditions,” says Scott. “It can be pricey up front but having solid terms and conditions that your clients agree to prior to a job can save you in the long run.”
10. Not scheduling time for ‘hidden’ tasks
As a freelancer, you’re not just an expert in what you do. You’ll be responsible for your own sales, marketing, tax and more.
“Only count 4 days a week as available to do client work,” says Doyle.
Use the extra day for the admin work such as time putting together a pitch, updating your expenses or laying the groundwork for new leads, without losing any sleep.
11. Undervaluing your own work
“Just because this work comes easily to you doesn't make it less valuable,” say Doyle. “[Conversely,] it makes it more valuable because not everybody can do it.”
With this in mind, be sure to charge what your work is worth. If you’re unsure what the standard rate is for the type of work you do, here’s a calculation that many use:
Take your current salary, add 30% (for extra work such as admin/marketing yourself) and divide by 220 (the average number of days you are likely to work in a year). This will give you your day rate.
There’s a lot of debate around whether to charge by the minute, hour, day or however long the job took. It really depends on what you do and what you’re comfortable with and some clients may even have a preferred payment method.
Learn by doing
Sometimes, mistakes are unavoidable. But, at the very least, they help us not to make the same ones twice. We hope this list has given you an idea of what to look out for and work to avoid, so you can lead a mistake-free freelance life.
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This content has been created for general information purposes and should not be taken as formal advice. Read our full disclaimer.
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