Avoid These Freelancing Mistakes When Just Starting Out
There’s plenty of reasons you might want to start freelancing. When you decide to make a switch, it will help you to move forward with a plan in place. Or at least some direction. Not taking the time to draft a plan might do more harm than good, putting you in a dangerous financial position.
The first time I officially registered as a freelancer, it may be clear I had no plan whatsoever. I put on a figurative blindfold, trying to make sense of German tax documents without being able to see where I was headed. I expected clients to show up when I needed them, or magically fall out of the sky. Obviously I was delusional.
I got myself in trouble for a number of reasons. These are my fuckups when I first started out, followed up by solutions on how to offset or prevent the mistakes made.
Check out the height of health insurance fees for freelancers.
I had just moved abroad, signed up as a freelancer, without having a clue about how the system worked. Normally in Germany when you’re an employee, the employer deducts the full health care fee from your salary, and pays it to the health insurance provider. Consequently, the salary you receive is netto. As a freelancer, you pay for this by yourself.
What to do instead: You can’t prevent paying your healthcare fees. You can do research and inform yourself on the exact height of the fees you’ll have to pay monthly, based on your tax status and height of your (expected, if you’re just starting out) income, so you won’t be faced with surprises.
Not building up a buffer before you start.
I made a full switch into freelancing without having any savings. I managed to secure some freelance contracts within the first month, but these were demand-based, meaning I’d only receive work if and when there was something to do. For months, no work came in, while I sat there hoping for an assignment. Money was running out, while nothing was coming in. Oops.
What to do instead: If you want to switch to freelancing full time, create a buffer first. Assuming you have a full time job now, restructure your budget to save up for making “the jump”. I feel secure enough if my buffer is enough to live off for at least six months. It’s up to you and what you feel safe enough by of course.
To “hope” work would come in.
As explained in the previous point, I was waiting for work to drop into my lap. “I have some contracts, now I’m done with the work”. That is not how it works.
What to do instead: Keep searching for projects and clients. Your income as a freelancer is volatile. There is no guarantee that something is coming the next month, so you better go after it.
I had no clear goal or path laid out.
I thought I could “just do translating work” (which I still do as part of my services) but work was not abundant, at least not in the places I was looking.
What to do instead: Ask yourself questions beforehand.
- What kind of work do you want to be doing? Developing, writing, be a virtual assistant?
- Which steps can you take to get started towards doing this work?
- How much do you need to earn to be able to pay absolute basics (rent, food)? Get your expenses in order.
- How many clients or projects would you need for that? You need to secure your livelihood.
- Where will you find them? Indeed, LinkedIn, your private network, freelancer websites?
- How will you utilise your network? Public posts showcasing your work? DM’ing potential clients? How often?
- How and where will you market yourself? Social Media platforms are abundant and free, you can use these. You can build a website for free (this one is on my backlog too).
- In short, where would you like to go, and how could you get there?
Having no reference to showcase your skills with.
All I had at the time was my CV. I thought this would be enough. I had no website, no blog, no online portfolio, no digital references of what I was capable of whatsoever. It’s so much easier to convince someone of your skills if you can prove what you can do by showing what you did. Not by listing bullet points on a piece of paper.
What to do instead: The time I tried to get into tech, I shared some of my code in public repositories, and built some (very poorly made) live projects that I could show as proof of my coding skills when asked. No one would care if I just wrote on a CV that I could code.
For my writing, I like to take on opportunities for guest blogging, for fun, and to have it there as a reference I can point to. I run a blog in my native language. I can also point people here, to my Medium profile where I am collecting a body of work.
People want to see proof of what you can do. Have something ready to show, whether that’s a website, a blog, an online portfolio or something else. Make it easy for them to say yes to you.
Know where to find the work you’d like to do.
By now I know where to look, depending on the type of work I’m looking for.
For more “traditional” jobs, it can be:
- Indeed.com (or .de, .nl, wherever you may be located)
- LinkedIn job section
- Xing.de (for Germany)
- Facebook groups (communities for expats, groups for jobs in cities)
- Asking your Facebook or LinkedIn network directly
For remote work I look mostly at writing and marketing-related work, which I find here:
How clueless I was. The letters sent by the German tax instances not even native speakers understand. It’s essential to get help here. Do not miss your tax declaration deadlines. There’s no escape and ignoring these letters will cost you.
What to do instead:
- Never ignore letters from the tax authorities.
- Stick to deadlines stated in official letters from the tax authorities. If not, you will have to pay up.
- Keep all your tax documents neatly organised. The paper documents in a paper organiser. The digital documents filed together, per month, so you can easily access them for when it’s tax declaration time and you need to hand your documents to your tax consultant. Which brings us to the next point. If you can get tax refunds, it becomes even more important to save receipts and documents, and file them in a way that makes sense in a year time.
- Consider hiring a tax consultant. Sure you can declare your taxes by yourself, but do you want to? A professional will do the work for you that would take you hours to figure out. You can in the meantime focus on work you prefer doing. Work that increases your income. Or work that further develops skills that would increase your market value — which is probably not going to be taxes, unless you’re studying to become a tax consultant. So if you’re stuck, get some help here.
- Or try a digital software for tax preparation. Up next on my list to try out is Sorted, a platform that “helps out business owners to prepare their taxes and cut down on accounting costs”.