Avoid These Mistakes When Starting a Freelance Business
Starting your own freelance business allows you to set your own schedule, be your own boss, and control what work you do and when. While there are many benefits, you also need to plan carefully for this type of career path. Make sure you avoid the following mistakes people tend to make when first starting their freelance business.
Not Planning For Deductions
When you run a freelance business, you are responsible for all taxes. Not only are you paying your taxes every time you file, but you won't have an employer deducting a percentage of your paychecks. This means you need to save a certain amount on your own. In order to get a break on your taxes, you can include deductions that relate to your business. Even if it might not seem like it, you probably have at least some deductions, so don't forget to find out. This might include part of the rent if your office is in your home, utility and internet bills, and gas when running business errands. Save all receipts so you can use them when listing your deductions at tax time.
Failing to Create a Business Plan
Another common mistake people make when they are a freelancer is not having a business plan. While your business might be a little different from others, it doesn't mean you shouldn't be fully prepared. Create a detailed business plan that goes over the type of work you do, potential marketing methods and getting clients, and some information about the future of your business and what goals you want to achieve. This can help you work toward something and know where to start when you first start offering freelance services.
Low-Balling Your Prices
A very common mistake that freelancers tend to make when they first start out is not requesting a high enough price for the work provided. You need to think about a lot when pricing your projects, from the effort you put in, to how much you want to earn per hour. A good way to start pricing work is by considering how much you want to earn an hour for this type of work, then figuring out approximately how long the project will take. While there are some other factors to consider, this is a good way to start.
Assuming an Accountant Isn't Needed
No matter what type of business you have or how small it is, you should see an accountant for tax and financial reasons. The accountant can let you know what deductions you have, help you decide on a good savings plan, and even work with you on advancing your business based on your current needs and future goals.