Mistake #1: Not treating freelancing like a business
As a freelancer you “eat what you kill”. Your earning are entirely dependent on the clients you can acquire and the quality of work you can produce. Since many freelancers come from a background of working in a corporate environment with a strict work schedule the flexible scheduling of freelancing often causes them to become lazy.
This laziness comes from the freelancer not viewing what they do as a business. The CEO of a company knows if they don’t produce profit they fail as a business, and they continuously look to grow their company. Freelancer that get complacent and don’t keep a pipeline of work, projects, and clients for the future will fail and need to return to a 9-5 job.
Mistake #2: Not looking professional
If you don’t look like a professional why would a company hire you rather than someone that looks professional? Freelancers hate the idea that people judge them based on anything other than the quality of work they do. Unfortunately business owners judge people freelancers off of the appearance of their business. You only have one chance at a first impression.
As a business owner who would you rather receive a cold email from – email@example.com or firstname.lastname@example.org? The gmail guy has no website, contact information or email signature, and fresh web solutions has a website with a portfolio, contact information to inquire about pricing, and an email signature with a phone number.
You need to at least have a website (that has your contact information on it), and a company email address. The beginner’s guide to starting a website will show you how to do that. I also recommend having an email signature with your full name, company name, and a phone number. These things all make you look more professional, and appearances are much more important that any freelancer likes to admit.
Mistake #3: Wanting to travel more than freelance
One great thing about living in the 21st century is you can be a digital nomad. If you have income streams that aren’t geography dependent you work and live wherever you want. There are many successful digital nomads making at least six figures through affiliate marketing, eCommerce, and freelancing that live like kings. These digital nomads are the exception, most nomads live client to client and never have any savings. This is equivalent to living paycheck to paycheck in a corporate job.
If you want to travel for 6 months or a year you don’t need to be a freelancer. You can work in your career and save up enough money to travel. Living a digital nomad lifestyle requires a great deal of balance and if you go about it the wrong way you will be half-assing a vacation and half-assing your freelancing. Think about travelling for months on end and running a business, it would be tough but with the right lifestyle design you could do it. Remember mistake #1 and treat freelancing like a business.
Mistake #4: Not charging enough
Most freelancers don’t make a consistent, high income from their freelancing. Many freelancers have plenty of work they can do, but it doesn’t pay enough for them. The issue here is often that they do not have the confidence to charge more money. They charge a higher price than clients are used to and a couple of cheap clients say no so the freelancer lowers prices again.
Charging more is a great way to keep good clients and lose bad clients. Bad, cheap clients won’t pay, and good clients will appreciate the fact you do good work and need to make money to live. Good clients tend to be companies that you would imagine to be good employers, ones that would care for their employees and pay them a high enough salary that they could live on. Bad clients are companies you would not want to ever work for, they may haggle over price, not pay on time, and ask for endless edits.
Your freelancing fees should cover medical insurance, taxes, and other benefits you would receive from a full-time job. Treat yourself with the respect you deserve and charge rates that are worth of the work you are doing for clients.
Mistake #5: Having poor business skills with clients
This usually results from a freelancer not thinking enough about what they want from their clients. Not how much money they would charge as much as the type of company they would like to work for and the type of work they want to do. Freelancers have the privilege of choosing which clients they want to work for. When a client and a freelancer decide to work on a project it is because of the double coincidence of wants. The client wants your services and you want
to be paid by them to work for them.
When you know who you want to work for it becomes much easier to get rid of bad clients. If a client wants you to make countless edits or last minute changes on a project get rid of them. If a client repeatedly pays you a week late and makes excuses about it every time, get rid of them.
You should also be building good relationships with good clients. When you work on a great project with a client make a note of them in a Microsoft Excel spreadsheet or a Google Sheet. Reach out to them every few months to stay on their radar and build a professional relationship with the people on their team. Add them on Linkedin or refer them to prospective clients, the business world is built on good relationships and a good reputation. If people like you personally and you do great work they will recommend you when someone is looking for a freelancer in your industry.
Mistake #6: Not knowing your target monthly numbers
Personal finance 101 is about understanding your income, expenses, and savings. As a freelancer you need to be your own financial adviser and your own accountant. Firstly you need to understand your monthly expenses, how much money do you need to make to sustain your present standard of living. To do this you will need to track your expenses in a spreadsheet software such as Microsoft Excel or Google Sheets for a month (ideally 2-4 months because your monthly expenditure will naturally vary slightly).
Once you have calculated how much your lifestyle costs you will need to calculate how much you want to save. Find your monthly savings goals and add it to your monthly living expenses and that is your minimum monthly income goal. The emphasis is on minimum because hopefully your monthly earnings are going up. You can track your freelancing income, expenses, and profits with Freshbooks easy to use accounting and invoicing software.
Mistake #7: Seeing other freelancers as your competitors
If you are confident in your abilities as a freelancer you should not be viewing other freelancers as competition. You should be viewing them as your allies. Even if it’s another freelancer who does the exact same thing as you, if you have too many projects at one time and a client reaches out you can send them a project or vice versa.
Ideally you will be part of a network of freelancers. Companies will naturally ask freelancers do you know anyone that can do X (placeholder for freelancing skill), and you can refer them to someone in your network. Try to join an existing group of freelancers who refer clients to each other. If you can’t find a network of freelancers than simply create the group, this will be easy to get people to join because everyone wants referrals. You can build a Facebook group, a Skype group chat, a Discord chat, it really doesn’t matter as long as your build it and freelancers hear about it, they will come.
It can also be an asset to have certain freelancers you can outsource specific tasks to. If you do web design and web hosting for local businesses but don’t care for other services businesses want you to do, you can outsource them. This could be redesigning a logo or creating graphics for print materials, it could also be doing SEO or social media marketing. Either way if a company asks you if you can do a project that you don’t feel comfortable doing you should always be able to say “I know a guy”.
Mistake #8: Not targeting small businesses
Small businesses have the money to pay you handsomely for your work and you will not have to deal with the bureaucracy of a medium or large company. Medium sized businesses will usually have an employee whose job is to find the best freelancers or agencies and get proposals and price quotes from them. Writing these custom proposals and dealing with bureaucracy takes too much time as a freelancer
Small businesses are deciding between doing it in-house or hiring a freelancer. They will usually make a hiring decision based off a quick phone call and will not be shopping around for 10-20 agencies or freelancers and comparing rates and proposals to find the optimal choice. They process of acquire clients is much easier when you are dealing with small businesses.
Mistake #9: Not targeting local businesses
Online freelancing platforms such as Upwork are unfortunately too saturated and have became a race to the bottom where freelancers compete on price. These freelancers are often based in low-income countries where they can live a good life from their cheap freelance earnings. Often they become half-decent at what they do because of how many project they do.
The better alternative is to target local businesses. Local businesses are always in need of freelancers and it is much easier to acquire clients when you can meet them in person or have a local call with them. It is also easier to build trust with clients when they can meet you face to face. This is more likely to lead to referrals to other businesses and if you have a network of local businesses and freelancers you can create a lot of referrals.
Mistake #10: Being scared of outreach
Whether it is cold calling or cold emailing a lot of freelancers are scared of reaching out to companies. This all comes down to the fear of rejection. This is easy to get over if you believe that you are providing a valuable service to a company. If you are helping them provide a better service or make more money why would you be scared to get in contact with them?
Do you want to know how I know that people are scared of outreach? Because I see all kinds of local websites with broken websites! I always wonder why doesn’t a freelance web designer reach out to that company. I remember a particular company whose schema markup was broken.
If you are a freelance web designer and you see a broken website do you send a cold email to a decision maker at the company. If the email gets ignored do you send them a follow-up email or call the CEO of the company and explain the issue he is completely unaware of having?
E.G. for broken schema markup get him on the phone, give him your elevator pitch and tell him you are a professional web designer and his website is having issues in Google Search that makes his company look unprofessional. Tell him to Google his company name and look at the result. He will obviously say, “Wow that looks terrible!” Pitch him your services, but remember not to use nerd talk, he does not know or care about what Schema Markup is!
That is an example of how easy it is to get new clients. If you are not actively hunting new opportunities to get clients as a freelancer you are being lazy!
Mistake #11: Building everything from scratch
It is important to understand the requirements of your client. If a mom and pop retail store hires you to do some basic design work they do not care if you built it from scratch in Adobe Photoshop or Adobe Illustrator. They simply care about the quality of the finished product. If they call you or email you back and say “Wow, this looks great” it means you did a good job. If they rehire you in the future it means you did a good job.
Your client will not care if you use a template if it means you do the job quicker and more cheaply. Most clients would prefer well priced, good quality work rather than expensive premium quality work. If they wanted premium work they would be paying the big bucks and hiring an agency or a full time in-house employee.
Mistake #12: Not being professional with billing
You don’t need to hire an accountant but you do need to look professional with your invoicing. If you only collect payments by check or etransfer you are going to have an incredibly hard time during tax season. You are also going to waste time collecting checks and tracking down etransfer passwords. The solution is to use an accounting and invoicing software.
Using a professional invoicing software such as Freshbooks allows you to create professional invoice templates easily and easily collect payments. Yes, it even works with automated payments so you can build your monthly recurring income sources. Clients will appreciate this as well because they can be lazy about writing checks, and plus you don’t want to have to deal with emailing a company accountant or administrative assistant figuring out the best time to come pick up a check. Use invoicing and accounting software and save a lot of headaches.
Mistake #13: Not setting business hours
Your clients need to know when they can and cannot contact you. It doesn’t matter if you work sporadically during the day, at night, and on the weekend. If you only want clients contacting you from 9-5, Monday-Thursday set those as your business hours. Do not answer your phone or email for business requests unless it is during your business hours. The exception is if you want to set “urgent” or “out of hours” rates.
For example you can charge 50% extra if you are contacted with something that needs to be done urgently and you can set a 2 hour minimum billing for this. Even if it only takes 15 minutes clients will still be charged for 2 hours of work. If a client contacts you after 10pm you can charge them a 200% premium. Obviously you need this all written into a contract and your clients need to understand this so there are no misunderstandings.