1. You’re not networking enough

No person is an island, and even if you’re a freelancer working remotely, you still need to build a network, form business relationships and reach out to others.

Networking allows you to develop business relationships and friendships that can be helpful in many ways. Not least financially!

Your network isn’t just a bunch of people from whom you can ask favors from time to time and bounce ideas off but also a valuable pool of professionals from whom you can seek guidance. By networking, you can also build authority so you become the go-to person in your field – a safe pair of hands that your network can refer colleagues to for your services.

Networking, when done well, is very much a two-way street. It requires your input, too.

If you aren’t networking or forming and nurturing relationships within your network, you are potentially leaving money on the table. That’s not just from unexpected opportunities that may arise but also from you proactively reaching out to your network and asking them if they know of anyone who would benefit from your assistance.

A simple email or follow-up to a key player in your network can go a long way, but like anything, to be successful, you need to be consistent and continue to nurture the relationships you build. 

This means you actively support your network where possible, too.

Networking (or lack of it), on the face of it, might not seem like a money mistake, but there’s a reason why they say your network is your net worth!

2. You’re not planning ahead

Not properly planning ahead can manifest itself in a number of ways, from not planning for potential dry periods (i.e. not marketing yourself adequately when you have work in and then getting caught up in the freelancer feast or famine cycle) to not planning ahead for events that are inevitable or regular such as tax and accounting obligations, to basic cash flow forecasting (know when cash is coming in/know when bills are due and money going out).

The good news is that a simple schedule can eradicate many of these problems. Having a routine schedule and sticking to it will also increase your productivity. There are plenty of online tools to help you with scheduling and planning; the key is to keep track of what you need to do (and when) and take action, i.e. don’t put things off or procrastinate.

There are other things besides planning you can do to make your freelance business run more efficiently, including automating time-consuming business processes. For example, when it comes to invoicing regular clients who need to be billed on a fixed schedule, you can take advantage of Invoice Ninja’s recurring invoice and auto-billing feature.

Auto-billing is a feature that enables the payments system to capture your client’s credit card details and store them for billing at a future date. This means future invoices can be issued automatically.

Invoice Ninja also has a time tracking extension for Google Chrome so you can log and manage all your tasks. You can also organize and plan your client work with Invoice Ninja’s visual project management tool. Find out more in our short video here.

Try Invoice Ninja for free here.

3. You’re comparing yourself to others

They say that comparison is the thief of joy, but when it comes to freelancing, it’s also the thief of your time and peace of mind. It’s easy to look at other freelancers’ progress and compare it to your own, especially when it comes to the rates they may charge. 

You could start thinking you need to increase your rates or, in some circumstances, decrease them to be more competitive.

However, the reality is that most freelancer’s rates differ for a wide range of reasons. They may offer different deliverables or add-on services, have varying levels of experience and expertise, position themselves differently, and target a specific client or target market, and that’s before we get into different locations and overheads particular to them. 

No one freelancer is exactly the same.

Your price, among other factors, should reflect your experience, the quality of the product/service, and your positioning in the market. It should also cover your overheads before you can generate a profit.

Trying to keep up with others is a drain on your time, money and resources. Sure, review your rates, but do what works for you and benefits your clients.

4. You’re not attracting the right clients

A lot of money issues by default are due to not attracting the right clients for you.

Take time to ensure your ideal client avatar you identified at the start of your freelancer journey is still the right fit. It may have changed considerably since you first started out.

It could be that your marketing materials and online presence are attracting clients that are no longer the right fit, or your website needs a tweak so it’s clear on your rates, even if it’s an approximate range that your prices start from. Read more about displaying your prices on your website here.

Also, don’t get stuck charging the same rate as you did when you began your freelance journey. You want to be paid what you’re worth, and bear in mind that lower rates can sometimes attract lower-quality clients.

Regularly reviewing your rates (upward) is the path to good positioning and prosperity.

The key is to avoid getting into a freelance rut, staying stuck charging the same rates you’ve always been charging, not learning new skills, or developing in line with the times and client needs.

Freelance success is routed in getting the foundations right, adding value to client projects and regularly updating and reviewing your skills (and rates where applicable).

~

Hopefully, you’ve found these tips helpful. If you know of anyone else who would benefit, please share. Thank you! 

1. Not having a buffer fund before you go freelance

As the wise saying goes – prevention is better than cure. And having rainy day savings or a buffer fund is certainly a good idea before you ditch your 9 to 5 and go all in on freelancing.

It makes sense to put some money aside so you have enough for everyday living expenses but also to see you through a few months of not earning any money. This doesn’t mean you won’t earn money when you start out, but knowing you have funds in reserve will stop you from accepting all work offered that you may not be in a position to accept through lack of experience, lack of time, or the clients might not be the right fit for you. What’s more, in an effort to get the work you might not charge enough or discount your prices. If you start off on this footing, it can be challenging to get back into a productive freelancer routine and avoid the overwhelm.

Another option to consider is to start your freelance career as a side hustle and move to a more full-time freelancer career once you have a nice roster of clients and are earning enough to make it a permanent full-time role.

2. Overspending on non-essentials

Unless you absolutely must purchase expensive equipment to perform your role, when starting out, start with the minimum required, opt for freemium online tools, or buy pre-loved equipment. 

If you need to splash out on something at the beginning, ensure it has a good return on investment (ROI) and pays you back many times over. You don’t need fancy websites with all the bells and whistles when starting your freelance career, and the more you can get used to only spending money on assets that will provide a return at the start of your career, the better. You’ll soon get used to it, and hopefully, this habit can help ward off Shiny Object Syndrome so you remain a savvy and sparing business owner. 

Increasing sales while keeping an eye on spending instead of raising them both is a sensible initial strategy for most new freelancers.

3. Not compartmentalizing your finances

When you go freelance or set up a limited company, it’s important to separate your business and personal accounts. This is something you must do at the very beginning of your freelance career, as otherwise, things can get messy quickly. In the worst-case scenario, you run the risk of getting in trouble with the tax authorities or getting fined if you don’t identify what is personal and what is business income.

Furthermore, you could miss tax deadlines and obligations. Depending on how you set your business up, your jurisdiction and your industry, there will be different rules and regulations for taxes and expenses. Keep all your receipts, have a dedicated bank account, and unless you are a financial whiz yourself, hire an accountant or professional to advise and assist you and your business.

4. Not automating, delegating or outsourcing time-consuming tasks

Tedious tasks that take up your time and do not directly add to your finances should be automated, delegated, or even outsourced where possible. You need to ensure you are making the best use of your time and not getting bogged down with tasks you could automate or outsource so you can focus on big-picture goals and avoid burnout.

You’ll often find that delegating or outsourcing these tasks to other people works out more cost-effectively. If you calculate your hourly rate and the time spent on time-consuming tasks and then equate that with the cost of outsourcing it to someone else who can do it quicker, you can easily make the cost-saving comparison. But even if you don’t delegate or outsource, there are plenty of automation tools on the market, and many are free or freemium models.

Take invoicing, for example. This task is definitely necessary but can be time-consuming, especially if you manually compile invoices yourself.

Invoice Ninja is a leading free invoicing software for small business invoicing, online payments, tracking expenses and billable tasks. It also includes attractive, professional invoice template designs you can customize with your logo and brand colors.

Try it for free here.