There are many reasons why people choose to eschew the traditional career path for the life of a freelancer. Many hope to achieve a better work/life balance, while others expect more autonomy and freedom in their working days.
Some do it because they hate having a boss or because they want to escape the internal politics and gossip of the workplace. Still, whatever their reasons, many find that freelancing is not all that it’s cracked up to be.
Some have unrealistic expectations, while others find that the unique set of challenges created by freelancing exceed the challenges they faced when working in a salaried job.
Here are 5 of the most common reasons why freelancers fail, and how you can ensure that you don’t make the same mistakes…
#1 They try to do all their work from home
One of the biggest draws of freelancing is the prospect of working from home and foregoing the hated Monday morning commute.
And while there’s certainly a satisfaction to be gleaned from taking an extra half hour in bed and sipping your morning coffee while others are stuck in nose-to-tail traffic, working from home has its disadvantages.
The home environment is full of distractions, and you may find that you get lonely after a while. You may want to look into affordable workspace solutions like hotdesking. You might find that you’re much more productive and much less lonely in a shared working environment.
#2 They undercut themselves on price
It’s understandable that you want to be competitive to gain a market share. But undercutting your competitors on price is not the way to give yourself the inside track. In fact, you may find that it hobbles your profitability.
Prospective clients may also associate low cost with low skill. This article has some useful advice on how to calculate what your freelance rates should be.
#3 They don’t keep track of their expenses
As a freelancer, you’re 100% responsible for your own tax compliance. But this also means that you can reduce your tax bill by logging your business expenses and offsetting them against your profits.
An accountant can guide you through what is and is not tax-deductible as part of your job. Many freelancers, however, take one look at their tax bill at the end of the financial year and decide that it’s just not worth it.
#4 They don’t organize their time effectively
The freedom of freelancing is a double-edged sword. When you have complete autonomy over how you manage your time, you might just miss having a boss standing over you, structuring your working day on your behalf.
Many freelancers struggle to organize their time effectively and as such, they tend to have long and miserable working days. Use task management and project management tools to map out your days and keep yourself on the right track.
#5 They put all their eggs in one basket
Finally, many nascent freelancers find a steady client and cling to them for dear life. And while you never want to alienate someone who gives you regular work, it behooves you to think about what you’ll do if their business goes under or their department restructures and they can no longer use you.
Make sure that even if you’re getting steady work, you know where to go to hustle for new clients.