typical mistakes of freelancers

Typical freelancer mistakes and how to avoid them

More freedom means more responsibility. And as a freelancer, you are very, very free ... But there are a number of stress factors that don't have to be. About ill-considered customer acquisition, hourly rates that are too low and more.

I have been working as a freelance journalist, publicist and content specialist for companies since 2012. I write articles, create videos, advise on all aspects of content, run one or two of my own web projects on the side, publish e-books and online courses. In other words, it never gets boring.

Sometimes, on the contrary, it can be extremely stressful. This is part of the job and is virtually unavoidable. But some of the problems are also homemade. Here are some typical mistakes that, in my opinion, make the freelance life more stressful than it needs to be:

Hourly rates too low

It's a recurring theme: you underestimate your market value. You also quickly miscalculate how much money you really need in the end. This is especially true if you were previously in permanent employment.

The biggest mistake is to assume 40 hours of work per week. Sure, you can work 40 hours a week, maybe even more. But you shouldn't assume that you will be paid for 40 hours a week. That is a significant difference to being an employee.

Why is that? As a freelancer, there are many tasks that permanent employees of a company do not have:

  • You first have to find and agree on paid jobs.
  • You need to take care of things like finances and taxes (see below).
  • You can no longer call IT if you have computer problems.
  • If you fall ill, go on vacation or use public holidays, the money does not simply continue to run.

In addition, expenses tend to be higher as a freelancer. For example, you have to buy your own work equipment. You may need an office. You have to take out health and long-term care insurance. And a lot more.

Tip: Do you want to work as a freelancer in the WordPress and WooCommerce environment? Then read our tips in the article WooCommerce for freelancers. It shows you what opportunities and business models are available.

You can calculate extensively and in detail here that you need to charge at least 60 euros per hour to achieve a typical average salary in the service sector. Or you can use these two rules of thumb to get an idea:

  • You take what you consider to be a good gross salary and multiply it by 1.5.
  • You must reach this value in half of your available working time in order to include both your disadvantages as a freelancer compared to employees and unpaid time.

For example: 4,000 euros/month would be a good gross salary for you. This roughly corresponds to the typical average salary for service providers mentioned above. Your freelancer target is therefore 4,000 x 1.5 = 6,000 euros/month. As a rule, 21 working days per month are assumed. 21 days x 4 hours = 84 hours. 6,000 target sum divided by 84 hours of monthly working time = 71.43 euros hourly rate.

Freelance work

This is an initial rough guide. It will seem like a lot to some and may even seem unrealistic to others. And yes, this rate can change if you have a long-term project, for example. Because then you may be able to bill more than 20 hours per week. In general, freelancers often work with daily and weekly rates, which are slightly cheaper.

No overview of the finances

As a permanent employee, the financial world is very clear: after all, you have your salary, which comes in every month. And the duties and taxes have already been deducted.

As a freelancer, it's all much more complex. Because your income is not regular and can sometimes be late or even fail to materialize at all. At the same time, taxes, for example, are paid later. And you have expenses that were not necessary in the past. As mentioned above, this includes your own work equipment, insurance and much more.

It is therefore important that you keep track of whether your finances are going in the right direction. In the past, a glance at your bank account would have been enough. Now, however, this is misleading: you always need to keep an eye on your income and, above all, your expenditure in the coming months. However, you can't tell this from your current account balance. There is simple accounting software that can help you with this. A spreadsheet can also do this in case of doubt.

No reserves for lean periods

It's important that you always plan a reserve for "surprises". Because they come more regularly than you would wish... Ideally, you should have reserves for three to six months to bridge lean periods. Or perhaps to get out of the hamster wheel you've created for yourself. Illness or other obligations can also cause your income to fall or stop altogether.

Factor in the taxes

Those who pay taxes in advance are somewhat less at risk here. However, if you pay quarterly in advance, for example, you may forget to do so from time to time. It is certainly a good idea to set aside at least 20% of all income immediately. Either mentally or actually. If you want to be on the safe side, increase this figure to 30%. As a freelancer in Germany, sometimes more - depending on your personal situation and other income. A tax office can help you with the calculation. In the end, it's always better to have too much money on hand than too little.

Unthought-out customer acquisition

Many freelancers have to keep looking for new clients and orders. However, if they only do this when their previous jobs expire, it may already be too late. Finding the right tenders, winning and agreeing the job, delivering the work and getting paid at the end: All of this can take many weeks or even months. You should always keep this in mind. And look around when things are going well. It's also important that you invest in your own marketing (see below).

Relying on a single major customer

When freelance life is difficult, you are happy to have a big client and rely on them. The danger is that this contract can fall through - and then you're suddenly left out in the cold. If you haven't taken care of other potential clients, it can take a long time to get out of this slump.

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As nice as long-term jobs are: You also have to bear in mind that you are largely "out of the picture" for this period. You will have little to no time for acquisition, self-promotion or further training. You should not underestimate these indirect costs of a lucrative major contract. You should also consider the threat of bogus self-employment if you live off a single large client.

Not selecting customers critically enough

As a freelancer, you tend to accept a job because you urgently need the money. Or because you like the job. This overlooks another important point: You also need to harmonize with the client. Otherwise, this can lead to frustration or perhaps even a canceled project and disputes.

Imprecise agreements and conditions

If you have new customers, you should make it clear:

  • What is actually included in your offer
  • What additional services are and what they cost
  • What has to be paid by when, etc.

Over time, you will develop a template that hopefully clarifies common questions and problems in advance. In the case of extensive services, this may also include invoicing part of the final sum at the start and defining further billable milestones.

Do not offer service packages

Depending on the field of work, it may be possible to offer packages with clearly defined services. Your advantage: You don't have to discuss the details of the order with each customer individually. Productized services is the buzzword for creating products from individual services.

Work independently

Not defining your own portfolio clearly enough

As a general rule, anyone who can present themselves as a specialist reduces their potential target group. However, he or she also increases the likelihood of being considered. In addition, the hourly rates are potentially much better. In this respect, make sure that people quickly understand where your particular strengths lie. At the same time, show where they come from.

My tip: If you have several subject areas, it's better to distribute them across individual, appropriately optimized websites and profiles.

Invest nothing in your own marketing

This includes seeing advertising on your own behalf as an important and ongoing task. Show your strengths and emphasize the topics and tasks that you particularly like and are good at. As someone once said to me: "If you mainly sell bread rolls, but you like cupcakes better and bring in more, you have to put your best cupcakes in the shop window."

This also includes asking satisfied customers for a recommendation in two or three sentences. You can then present these on your website as "social proof".

Chaotic work organization

One of the biggest challenges for many freelancers is being able to work productively and independently. As an employee, you are often told exactly what to do. As a freelancer, you are responsible for this yourself.

Everyone is different in this area. Some people need a clear structure. For example, I schedule difficult or lengthy tasks for the morning. When in doubt, I work on this project for two hours before I do anything else on my computer. Emails then have to wait. And Twitter & Co. even more so.

Note: As a freelancer, you usually work from home. This is a challenge for many people. We have summarized the best tips in the article Working remotely: Pros & cons summarized.

At the same time, you have to learn to accept (and plan for) the fact that you won't be able to work productively or creatively for eight hours a day. At least that will be the case on many days. Plan your working hours and your day accordingly.

I could easily write another article about productivity techniques. There are countless guides on this topic. Personally, I couldn't live without my to-do app Todoist. I record everything in it. However, I don't follow a specific system such as Getting Things Done (GTD), as this is too much overhead for me. Others, however, swear by it.

As a freelancer, it is important that you do your work properly and deliver it on time. Even small jobs should get your full attention. Because you never know what might come of it.

Closing words

One more thought that I find particularly useful: freelancers should see their work as a business and treat it as such. It may not feel like entrepreneurship, especially at the beginning. You may have become a freelancer out of necessity. But the more professionally you approach it, the greater the chance that it will work out in the long run.

Images: Headway, Jordan Whitfield, Danielle MacInnes

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