First-Time Freelancers: How to Avoid 5 Common Mistakes

first-time freelancersFeeling an itch to do your own thing? This guide for first-time freelancers is sure to help…

Whether you’re dreaming about being your own boss or want to start a side hustle, freelancing can be an excellent way to feel professionally satisfied and support yourself financially.

Sure, striking out on your own is exciting. But it also comes with a handful of hurdles you’ll need to navigate as you get started. With that in mind, we put together a list of common mistakes first-time freelancers make — and, more importantly, how to avoid them.

Read on to run your biz like a seasoned pro, even if you’re just starting out.

1. Scope the Work

The first step: fully understanding what’s involved in a given project.

No matter what services and skills you offer, you’ll need to to calculate how much time it will take to complete. “Scoping” a project or offering means to carefully consider all of the details. That way, you can make an accurate plan before you get started. You’ll also feel confident knowing exactly what the project entails before you commit.

First-time freelancers should consider the following questions when scoping a potential freelance project or gig:

  • What does the work involve?
  • What isn’t included in the project, but may be added as extra work (e.g., creating additional marketing materials, logo design, or copy editing)?
  • Does the client need to provide anything?
  • How long will the project take?

Once you have the answers, you’ll be ready to bang out a statement of work and sign off on the project. Beware of “scope creep,” which happens when clients ask for things outside of the work you initially agreed on. Sticking to your terms will help ensure you don’t end up doing extra work — for free.

2. Get It in Writing

As a freelancer or business owner, you’ll need to become familiar and comfortable with agreements and contracts. After all, signing off on project details helps all parties understand who is responsible for the different aspects. And, a signed doc offers protection when something doesn’t go as planned. To make things easy, aim for a concise and clearly written agreement. Your goal: a document that is easy and effective to reference before, during, and after your collaboration.

Not sure where to start and haven’t drafted or signed a contract before? Scour the interwebs for some templates that apply specifically to what you offer. Need something super specific or more custom? Hiring a lawyer to write a contract for you might provide the peace of mind and confidence you need to get to work.

3. Research Rates

How much are your time and talents really worth? Pricing is a tricky area that can be a major pitfall for first-time freelancers who aren’t sure how to figure out the value of their time. But don’t worry, there are a couple of tactics that can help you establish your baseline.

First, research the standard hourly rate for your type of work by searching on Google, asking in relevant online groups, or consulting with contacts who offer something similar. Next, find and consider signing on with a placement agency (such as Creative Circle) in your industry — the emails and information you receive about relevant jobs will give you insight into how much companies are willing to pay someone with your expertise. If all else fails, this neat Freelance Rates Calculator and Freelance Rates Database by Contently could be a huge help.

4. Set Up Your Business the Right Way

Whether you’re freelancing as a side hustle to earn some extra cash or plan to make it your full-time work, how you set up the business side of things can have different effects on the responsibility you’ll assume and the taxes you’ll pay for your earnings. Do you plan to work as an independent contractor? If so, research the implications of working as a sole proprietor; First-time freelancers need to be totally aware of personal liability should a client or customer should take legal action against them. A sole proprietorship also means you’ll be personally responsible for all burdens and debt. Setting up a formal business structure, such as a limited liability corporation (LLC), can alleviate some of the personal responsibility. With an LLC, you may also be able to claim additional tax deductions.

Not sure what’s best for you? Check out the different options on incorporation sites such as RocketLawyer or LegalZoom. Both companies have customer service reps who can help you understand the different pros and cons of each. Once you’ve decided and set yourself up, head to the bank to open any new accounts, such as a business account, that you might need.

5. Track Expenses

Once you start earning money and thinking about taxes, it’ll be time to track the money you’re spending to get your freelance work done. First-time freelancers want to account for funds they use on transportation, client meetings and gifts, services and programs they use for their work, and anything else that affects the bottom line. Don’t forget about the Target trips for office supplies, internet you use to work from home, cell service you need for client calls, and other daily details. If you’re unsure, check with your accountant about what’s deductible. Business expenses add up at the end of the year and can save you money in the long run.

Avoid these five mistakes and you’ll be a foot loose and fancy free, seasoned freelancer in no time.


For this post, we’d like to thank our friends at Levo.





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