The decline in South Africa’s economy is forcing people to consider other means of income. This has resulted in a rise of freelancers and consultants across all industries. But one does not simply become a freelancer. There are many freelancing pitfalls that can be avoided if you know what to look out for.
(This article first appeared on MarkLives.)
Regulating your income
Managing a revenue stream is probably the biggest concern for freelancers. Many of us started with a client or two in the bag. But what happens when you lose a client? Or when the area you specialise in is not in demand any longer?
To limit the typical ups and downs of the freelancer income it is important that you diversify. This does not only mean offering a broader range of services than what you specialise in but also dividing your time between working and trying to find work.
Two years ago, I enlisted the services of a business coach. He made me realise that, even if I am in a comfortable financial position, I should never stop exploring new business opportunities. I started approaching my freelance profession like a salesperson – setting targets for cold calls and new-business meetings and working towards a specific financial goal not just for this month but mapped out for the entire year.
This approach requires immense discipline and it is not easy to maintain the energy required to do this. But it is worth it.
Managing your time
Because it is difficult to estimate whether you will have work next month or not, freelancers tend to accept more work than what they have the capacity for. To avoid burn-out, and to ensure you meet all your clients’ deadlines, it is important that you plan your time carefully. As you gain experience as a freelancer you will get to know how long each job takes to execute. But the main trick is to always overestimate.
It is further important that you know your worth. Don’t spend days on a job with a large scope if the financial rewards are small.
And linked to this is the hourly fee structure, which I disagree with. As freelancers, we should be paid based on the value we add to the client’s business, not for the time we spend doing the work. If I can solve your business problem in two weeks, and someone else can solve the same problem in four weeks, why should I be paid less?
The dreadful admin
If you think freelancing will release you from doing the dreaded admin, think again! As a freelancer, you are running a business. You are responsible for marketing, new business development, office administration, and billing.
And on top of that, you need to do accounting and bookkeeping and become familiar with contract law. Not to mention all the tax regulations and the preparation for submitting your tax returns as a provisional taxpayer. Thankfully many freelance bookkeepers offer all these services at affordable rates, but you must keep a meticulous record of your income and expenses
There are many freelancing pitfalls, but they can be managed and even avoided. The only thing you need to do is take the blindfolds off. Approach your journey as a freelancer with purpose, with your eyes wide open, and you will reap the rewards.