Once you have made the decision to leave the rat race and set yourself up as a freelancer, there are some things that you must consider before you begin, if you want to be successful. Although there is nothing wrong with giving it up and going back to your office cubicle and 9-5 routine, if you make these mistakes then you might be going back sooner than you think.
- Not Having Enough in Your Savings Account - Experts say that you should have between three and six months of expenses saved as well as your start-up costs. This can seem like a lot of money. There are ways that you can raise money, but two things you should not do is withdraw from your RRSP or put everything on your credit card. If money is tight you should start freelancing while keeping your full-time job.
- Not Defining your Goals – Once you decide to go out on your own you need to set your goals. The first one is to decide what you want to get out of going freelance. Is it about having a flexible schedule, and the ability to decide on the clients that you want to work with? Is it about just making enough money to pay your bills or do you want to make more than you did as an employee? Once you set your goals you need to check them at regular intervals to make sure you are achieving them or to revise them.
- Not Having a Business Plan- You need a business plan to use as a guideline for your future. Your plan needs to include basic information about your business such as the contact information, what you do and what you are hoping to achieve. In the future. You need to describe the products or services you are offering including pricing. Information as how you will market your business is important as is an estimate of your operating expenses and what you will need for future growth.
- Jumping in too Soon – It is a good idea to start your freelancing career while still working full time. You will be able to try out a different jobs and clients and see who you are happiest working with. It enables you to make mistakes and still have an income and also to build your savings so that you are ready when the time comes to jump. It also allows you the time to set up your office to suit yourself and have the equipment that you will need to do the work.
- Not Having a Contract – Having a verbal contract can be enough but a written one is usually better. A contract will not always help you to get paid, but it will define expectations on both sides and make sure that there are no surprises when the job is finished.
- Not Having a System to Organize your Paperwork and Money– You don’t always need to hire a bookkeeper or accountant, but as your business grows this might be a good idea. You can use an app such as Quickbooks to make tracking your income, expenses and taxes much easier.
- Taking on the Wrong Clients – Good clients are those who give you regular jobs that you can and want to do, and work with you to get the best results. They are also easy to communicate with and pay your invoices on time. Inevitably you will end up with a client who does not meet those criteria and you spend more time than you should on them for less money. You need to be able to decide when you have had enough and that they are no longer worth it, as well as how to recognize the signs to avoid this type of client in the future.
- Not Setting Realistic Rates for your Work – There is no fixed formula for setting rates for your freelancing work. Prices depend on the industry, geographic area, your skillset and expertise and the work you are doing. You need to decide if you are going to bill hourly or by the project, which can change with each job. You also need to decide what is your rock bottom dollar amount and keep this in mind when charging clients. You may start out at a lower price as you are building your clientele and experience, but you must know how low is too low so that you don’t take jobs that don’t pay enough leaving you financially overextended and stressed. As you gain more experience you should look at your rates and revise them if necessary.
- Not Having the Required Self Discipline– You might start freelancing assuming that the best thing about it will be the flexibility of your work hours. In reality, you will need to available for your clients during regular office hours which can be difficult if you prefer to sleep late. Even though clients cannot demand that you are available specific hours they still need you to be available to answer their questions or they will move on to someone more accommodating. On the other hand, you need to establish what hours you will be available to your clients, such as 8am to 6pm. Make it clear that unless you say so, calls from them at 10pm or on weekends and holidays will not be welcome.
Starting out as a freelancer can be difficult but you should not get discouraged if you make a mistake. You will soon discover whether working freelance is a fit for you.