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6 common freelance mistakes to avoid

by Sara Meij

If you’re a seasoned freelancer reading this, we can probably agree that just like me, you’ve been guilty of some or all of the following mistakes during the early days of your career. It’s ok! We live and we learn. I’ve rounded up some of the most commonly made freelance mistakes to avoid, especially when you’re just starting out.

 

Assuming work will come to you

Unless you’ve been freelancing for a while and you’ve made a name for yourself, don’t expect work will come to you. Especially when starting out, you need to actively and frequently do outreach and prospect for new clients. Doing this regularly will build a safety net for yourself, so that if one of your clients decides to end your working relationship, you have other relationships in the pipeline as backup. 

Even if you already have a good client base, don’t expect clients to supply you with work. At the beginning of my freelance career I fell into this trap many times. The problem was I still had the mindset of a salaried employee, which caused me to sit back and wait for work to arrive from my existing clients. The result: weeks passed and no work. Depending on the agreement you have, some may come to you with ideas or projects, while others will rely on your expertise to pitch to them what you think they need. 

 

Taking on too much

It’s so easy to get overworked when you first start out. It’s another trap you can fall into: for weeks or months, you’ll have very little freelance work - despite your efforts to build relationships and get new projects through the pipeline. Then, suddenly, everything comes through at once and you have three or four big projects to work on at once - all with similar deadlines. You don’t want to say no to any project for fear you’ll lose the client, so you hunker down and work around the clock to get all of them done. Then the 20th of the month comes around, you do your invoices, get your big pay day, and then collapse into bed because you’re so exhausted. How do you avoid this? You plan ahead. If you want to invoice a certain amount by the 20th of each month, calculate back to figure out when you should start drumming up work. From my experience, even the most organised clients can be unpredictable with their projects. Sometimes a client will take weeks or months to scope out the project they want you to work on, while other times that same client will give you the green light within 24 hours. Account for that as much as you can when you do your planning.

Also, always be considering your own schedule. Think about how long it would take you to finish certain projects without forgetting to account for your recurring work. On top of that, make sure to factor in downtime so that you don’t overextend yourself. For me, exercise and rest are essential to rounding out my workweek - I can’t survive without them! Having enough time for yourself and your health will make you more efficient and will help you produce better work.

 

Setting your rates too low

Before you even think of putting your rate to a client, do your due diligence. Figure out what the usual rate is for the type of work, and then factor in what sort of business your client runs. If it’s a start-up, and you’re starting up yourself as well, you may want to consider offering a discount on your rates, especially if the project is likely to lead to a long-term relationship with a new client. Once you’ve set your rates, it’s crucial you reassess them every year. It’s incredibly unlikely a client will decide to give you a pay rise without you asking for an increase in your rates.

Renegotiating your rates on a yearly basis will allow you to adjust for inflation as well as give yourself a pay rise. Most clients will expect you to increase your rates every year, but make sure you provide reasoning to back it up regardless. If the client has been happy with your work all year, you’ve always met deadlines and have built a good professional relationship, you’ve got solid ground to ask for more money. Make the increase manageable; don’t bump your price by 50% unless you really lowballed your rates to them previously and you’re ready to walk away if the increase can’t be met.

 

Not asking for testimonials/referrals

Testimonials are a great way to gain trust from your prospects and grow your work portfolio. My personal rule of thumb is to ask testimonials from clients after a year of working with them. A year is long enough to have built a good working relationship and to have shown your consistent quality of work. 

Use your website or online portfolio to showcase some of your testimonials. They really do make a difference if someone is deciding on whether or not to reach out to you with work. If you’ve just finished a successful short term project with a client, don’t forget to ask if they know of anyone else who could use your services. More often than not, they do and will pass on your details.

 

Not having a tight grip on your finances/taxes

This is last on the list, but one of the most important points to consider. Income from freelance work is inconsistent and hard to predict, so freelancers must be financially prepared for periods with little or now income. This means checking your bank accounts regularly, building up healthy balances in your savings account and emergency fund, and limiting your spending throughout the year (not just when your income dries up).

Additionally, you must be aware of and plan for your tax obligations. PAYE employees in permanent roles don’t have to think about tax; their employers do that for them. As a freelancer, you alone are responsible for fulfilling your obligations to the IRD and ACC. This means learning about and planning for these obligations, knowing your tax rates, and setting aside a percentage of your income from every invoice to go towards those obligations.

To simplify things, I highly recommend using Hnry to pay and file your taxes for you. Hnry is a tax and financial admin service designed specifically for self-employed contractors and freelancers. Hnry automatically calculates, deducts, and pays your taxes for you as you earn, which means you have more (stress-free) time to focus on other things, such as growing your freelance work.

 

Wrapping it up

We all have to fall flat on our faces sometimes - it makes us learn and do better next time. But hopefully, with the tips above, you’ll fall less hard and less often before you figure out what works best for you. Embarking on a journey as a freelancer is exciting, scary, nerve-racking and incredibly rewarding, all at the same time. Give it your best shot.

 

We’ve got more guides, tips and tricks on freelancing (and tax) on our blog and great interviews and articles on The Leap

 

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