7 Common Mistakes Made by New Freelancers
Making a transition from employed designer to freelance designer can be intimidating for even the most talented of designers because there is so much more involved with being successful as a freelancer. As a freelancer you’ll be responsible for every aspect of your own business, and it’s those aspects aside from the actual design work that typically create the most significant challenges. While the transition is rarely easy, if you take a look at the mistakes that are commonly made by other new freelancers you can prepare yourself and avoid those potential pitfalls.
In this article we’ll take a look at 7 mistakes that many new freelancers make. The purpose is to help those of you who are in the process of moving into the world of freelancing, or considering it. By knowing these challenges ahead of time you’ll be better prepared to avoid them in your own business.
Mistake #1: Not Saving Enough Money Before Moving to Full-Time Freelance Work
This mistake often happens even before making the move to full-time freelance work. If you are planning to try full-time freelancing there are a lot of uncertainties about how much money you will earn, especially during the first few months while you will likely need to work harder to find clients while establishing your business. In order to avoid financial problems and more stress than needed, ideally you will have at least enough money to cover a few months of your living expenses in case things start slowly.
Many people leave a full-time job and assume that they will be able to start making enough money right away. In some cases it does work out this way, but not always. In fact. most new freelancers don’t bring in a whole lot of income the first few months, so that savings may be essential. Not only will it help your personal financial situation, but it will also prevent you from needing to go back to a full-time job right away because of upcoming bills.
Mistake #2: Lack of Planning for Taxes
Staying on the financial theme of the previous point, taxes are one of the most significant differences in working as an employee or being self employed. As a freelancer there will be no paychecks from an employer with taxes already deducted. Many freelancers underestimate the amount of taxes they will need to pay, or they simply lack the discipline to not spend the money.
You’ll have to be prepared and disciplined to set aside enough money for taxes, and you may have to pay quarterly estimated taxes throughout the year. Everyone’s tax situation is unique, so seek the guidance of a tax professional that can help you to plan. This way you won’t be surprised by owing a lot of taxes at the end of the year, and you won’t face unnecessary penalties for not doing things properly.
Mistake #3: Accepting Every Project that Comes Your Way
When you’re first getting started as a freelancer and you’re in need of client projects the natural reaction to an inquiry from a potential client is to want to jump into the project right away. However, not every project will be a good fit for you, and if you want to save yourself some headaches take the time to make sure any project is a good fit before accepting the work.
This is a mistake that I made in my early days as a freelancer and I learned quickly from a few bad situations that I needed to be more selective. This doesn’t mean that every project that you pass on is for a “bad” client, it just means that it wouldn’t be an ideal fit for you. In my case a client wanted to use an obscure CMS (content management system) that I’ve never had another request for in the years since. The price that I was charging didn’t justify the amount of time that was required to learn the CMS. I should have either charged more or used a more familiar CMS that wouldn’t require as much time. The project wasn’t a good fit for me because the client insisted on this particular CMS, and I knew it was something I would never work with again. It wound up being a waste of a lot of time that I could have used in other more productive ways.
It’s a good idea to think about the type of clients and projects that appeal to you. It could mean working with a specific industry, a certain type of design (example, web or print), a CMS, or even a specialization like e-commerce websites, PSD to HTML conversion, etc. Knowing your ideal project can also help you to know what projects simply don’t fit with your big picture goals, and when that happens it is a good idea to pass on the project. If you don’t want to completely pass on the project, make sure that you at least quote a price that is high enough to cover the loss of your time that you could be spending on other projects.
Mistake #4: Not Using Contracts
Almost every freelancer has a problem arise at some point from either not using a contract at all or not going into enough detail in a contract. This is a mistake that you probably won’t make too many times before you realize the importance of contracts, but it’s even better if you can start off by using contracts effectively to avoid any of these problems.
One of the most common problems that freelancers face (even experienced freelancers) is fighting scope creep. On many projects you’ll find that the boundaries of the project are pushed or stretched as clients ask or expect you to work on things that weren’t originally a part of the project when you provided the quote. A contract is an outstanding tool to help prevent scope creep because it allows you to clearly define what is and what is not included in the price that you are quoting for the project. This helps to get everyone on the same page, and then when scope creep sets in you’ll be protected and you can charge additional amounts according to the extra time that is needed.
Contracts are also helpful for establishing guidelines for when payments must be made, deadlines that must be met by both the designer and the client, limiting liability, and defining intellectual property rights. If you don’t have a contract that you already use on your client projects we have a few available at Vandelay Premier that may interest you:
Mistake #5: Starting a Project Without Collecting a Percentage of the Payment Up Front
Another common mistake that involves the financial side of running a business is not collecting a percentage of the payment up front. Contracts also help with this issue. By starting on a project with no up front investment from the client you are drastically increasing your chances of having problems with payments arise later. Getting a percentage of the payment up front will ensure that you are only working with serious clients and you’ll avoid wasting your time without getting anything for your work. Plus, clients will be more committed to the project since they already have something invested.
The up front money also helps to provide you with some income that may be needed before the project is completed. Clients who don’t pay anything up front are more likely to drag a project along slowly, which only delays your payday further if you are waiting until completion of the project to invoice the client.
Mistake #6: Jumping in to the Design Work too Quickly
Although the design and creative work is ultimately what motivated you to work in the industry, before you start designing for a client project you should dedicate the time necessary to adequately get to know the client, their customers, and the specifics of the project. Each client and each project is unique, and without investing the proper time to get familiar with the situation it is impossible to get the best results.
It’s a good practice to establish some sort of process for working with new clients so that you get to know as much as possible. Some designers like to meet with clients for face-to-face meetings when possible, others conduct interviews on the phone, some have questionnaire that they ask clients to fill out, and at times you may even need to talk to customers of the client in order to get their perspective. While this does take time, it will drastically improve the results for you and for the client.
Mistake #7: Working Without Tracking Your Time
As a freelancer, how you manage your time will be critical to your success. There are many aspects to running the business aside from just doing the design work, and in many cases it can be difficult to know how much time you are spending on different tasks. By tracking your time you will have a better picture of how your time is split between the different activities involved in running the business, and hopefully you will be able to identify any inefficiencies that could be improved. Especially when you are just getting started it is important to know how you are spending your time so that you can make the needed adjustments, and for planning your time.
Tracking your time is also very helpful for evaluating your rates. Without tracking your time you won’t really know how much time you have spent on a project. But if you do know how much time you spent on a project you can calculate the hourly rate earned on that project. New freelancers often find that when they calculate their hourly rate for a project it is much lower than they anticipated. Under charging is a common mistake for new freelancers, but by knowing how much time you have dedicated to past projects you can do a better job of estimating the amount of time needed for future projects, and you can improve your accuracy for developing quotes that will pay you a fair rate.
Tracking your time is also helpful to see how many hours you are working each week. If, like most freelancers, you are working from home it can be challenging to draw a line between personal time and work time. Tracking your time will help you to see the big picture of how much you are working, and hopefully it will prevent you from falling into another trap for freelancers, working too many hours. It’s important that you have enough time away from work and with your family and friends to avoid burnout and to help you to actually enjoy your work.
Published January 5th, 2012 by Steven Snell