Most Common Mistakes Made by First Year Freelancers

On paper the freelance life must seem amazing. Think of it! The notion of forgoing the Monday morning commute and enjoying an extra half hour in bed while your peers scurry through rain and wind to get to their places of business alone is enough to make most seriously consider it. Those with strained relationships with management may also relish the notion of being accountable for their own productivity without a boss standing over them timing their bathroom breaks and monitoring their internet use.

However, while freelancing has numerous benefits for those frustrated by the conventional career path, it also has its fair share of caveats. And if nascent freelancers aren’t careful they can find themselves making these common mistakes in their all-important early years...

Working from home

Of course, working from home isn’t necessarily a bad thing. Indeed, the lack of need for a commute can help you to get a useful early start on the working day. But unless you take steps to compartmentalise your workspace from your living space one of two things will happen. Either you’ll be unable to extricate yourself from the quotidian household chores that can be so appealing when you’re creatively frustrated. Or you’ll find yourself in a position where you always feel like you’re at work and find it hard to switch off (more on that later). 

Failing to properly account for tax

Having spent your whole career with your employer managing your tax on your behalf, it’s easy to underestimate how much you need to set aside. Even if you’ve considered your income tax, there may be other taxes for which you are liable that you haven’t considered, which is why this online GST calculator is so useful. Make sure you’re registered for the applicable taxes and make your contributions part of your cash flow management. An accountant can be invaluable in advising you on this. 

Forgetting to declare all of their expenses

At the same time, while many nascent freelancers can fail to properly account for their taxable income and be met with nasty surprises, they can also shoot themselves in the foot by not declaring their expenses. This may be because they’ve forgotten to declare a business expense, neglected to retain a receipt or simply never realised an expense was deductible in the first place. This is why an accountant is such a necessary expense when it comes to keeping your books balanced. 

Not realising their true market value

Just because you’re new to the world of self-employment doesn’t mean that your skills aren’t valuable to your clients. Many new freelancers make the mistake of trying to undercut their competitors on price. But this can seriously bottleneck your earning potential. Unless you establish your market value and charge your clients accordingly, you could start your freelancing career on the back foot.

Burning out

Finally, all freelancers need to be aware of their own limitations, establishing set working hours and sticking to them. Otherwise they can find themselves overcommitting and burning themselves out early in their careers. And this benefits neither them nor their clients!