The benefits of a freelancing career are seemingly endless: You get to be your own boss, you get to work in a field that you love or that you are great at (ideally both), and, with enough work, you can make a great living wage from anywhere in the world (that has an internet connection).
According to a 2015 report in The Atlantic, not only are more than 50 million people in the United States alone making at least some of their income from freelancing, many of those people report being happier because of “freedom, choice, and flexibility.” Additionally, 1.4 million British freelancers work across all sectors. The majority of the freelancers surveyed also reported making more money in their new “solopreneur” ventures than they did in their previous jobs.
But freelancing isn’t easy. There are plenty of potential pitfalls that any budding freelancer should be aware of and should be prepared for.
Billing, Expenses, and Taxes
In your 9-to-5 taxes can be relatively straightforward: You receive your paycheck, with whatever amount of deductions are applicable to you, and at the end of the year you file once and hope to get some money back (or at least to not owe too much).
But freelancers are in a much different situation. A Freelancers Union blog written by New York based CPA Jonathan Medows helps to orient budding freelancers: There are 1099s, self-employment taxes, quarterly estimated payments, business expenses, and many more things, that, if you’re like me, you’ve never heard of. This can be confusing for anyone who is just starting their freelance business. I mean, you’re a writer, or a graphic/web designer, and now you also have to be an accountant? Who signed you up for this?
Stop. Don’t panic. There are great tools like AND CO available (currently for U.S. work) that can take care of plenty of your record keeping needs without the need to learn any software. Not only do you get a personal “CO” (chief operator) who you can reach throughout the day, but that CO is also knowledgeable about tax deductions, and can help you keep track of all of your income and expenses.
Working Hours For Freelancers—It’s Up to You!
Some freelancers work set hours, just like any other job. They sit down at their desk at 9 a.m. with a cup of something hot and caffeinated, they walk their dog and grab a bite at 1, and they shut their laptop and leave the “office” at 5 p.m. on the dot.
Others work all hours of the day and night, especially if they are just starting their business. But the motto “work smarter, not harder”, almost always applies. Once you’ve landed some great clients who consistently pay you what you deserve, you can ease back a bit and make sure you make it to all of your appointments, or all of your kids’ football games. Now put your phone away and watch little Johnny as he takes aim for the back of the net.
Cash Rules Everything Around Me
You need to get paid. We’ve all heard horror stories about freelancers who work on big projects, do a great job, and then still have to go begging for their money. That’s why you need to be organised. You should have a contract that clearly states the terms, time line, and, for larger projects, requires a deposit up front as well as payment upon completion. AND CO helps with this as well: Not only do they review contracts and provide suggestions on what may not be quite up to snuff, they also send invoices, keep track of them and, if a client does not make payment by the agreed upon date, they follow up on your behalf with another invoice that includes any fees due to late payment. This frees you up to worry about the things that matter the most for your business: Landing clients and doing outstanding work on deadline.
Clients Come and Go, Keep a Steady Flow
In episode 10 of season one of Mad Men, Roger Sterling drops a bit of wisdom on his staff: “The day you sign a client is the day you start losing them.”
Now, that doesn’t mean you are going to lose them—what it means is that nothing is permanent. Maintaining the relationship is just as much on you as it is on the client. But sometimes the work dries up, or the client goes under, or you’re just not doing the type of work they are looking for. That doesn’t mean you should give up, it just means you need to evaluate what you can do to ensure that your work remains in demand for all of your other clients and for your future clients.
Look back at Mad Men to see how it works: They lose plenty of big clients, but they also gain even more. Keep making connections, looking for opportunities, and finding ways to keep your relationships with your clients as strong as you can by always offering your best work. Then, one day, you too might have hundreds of employees at the firm you started, and you can spend your days like Roger Sterling, drinking martinis and snapping off one-liners.
Freelancers need to be jacks-of-all-trades. You need to sell yourself, you need to be dedicated, organised, creative, flexible, and so much more. But you also have to be prepared for the worst if you want to weather the storm and ultimately become successful.
And you do, don’t you?