There are very few barriers to starting a freelance design or development business, which makes it easy to get launch quickly and without a major financial investment. Unfortunately, that also means that many freelancers get started without adequate planning or preparation, and it can lead to some significant mistakes. New freelancers are bound to make some mistakes, but if you’re aware of some of the common pitfalls before you even get started, you can work to avoid mistakes that could prove to be very costly. In this article, we’ll look at 11 mistakes that are often made by new freelance designers and developers. Avoiding these mistakes can help you to establish your business on a better foundation and set yourself up for success instead of failure. 1. Getting Started with Inadequate Savings If you’re freelancing full-time or if you leave a full-time job to pursue your work as a freelancer, you should have an emergency fund saved up to help cover your bills and living expenses in case you’re not making enough money right away. Most financial experts recommend having an emergency fund that includes enough money to cover all of your living expenses for at least 3-6 months. Of course, there are some details that can impact exactly how much you need (like if you’re supporting a family or just yourself), but this is something that you need to consider before relying on freelance work as your primary source of income. Even if you start landing clients right away, you may not get paid immediately. Some projects can get delayed, so maybe you’ll get an initial upfront payment, but the final payment may be pushed back. Or you may also have issues with a client who just pays invoices very slowly. If that’s the case, you may need money to pay your own bills and expenses before you’re paid, and you’ll need to rely on savings. An ideal scenario involves starting freelance work part-time while you also have income from a stable full-time job. That allows you to slowly build up your workload and client base before leaving the full-time job when the time is right. Even in this situation, you should still have an emergency fund to cover living expenses for a while in case your income is lower than anticipated. 2. Lack of Separation Between Personal and Business Finances Another common mistake is to mix personal and business finances. In order to keep your financial records straight, you should keep them separate. This means you should create a separate checking account for business purposes, and you may also want to sign up for a business credit card. Use the business credit card and business checking account to pay for all of your business expenses, and only your business expenses. 3. Lack of Planning for Taxes One of the main reasons why you should keep your personal and business finances separate is because it makes tax preparation easier, and helps to avoid mistakes. Unfortunately, many new freelancers […]
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