Except for very few highly qualified professionals, no one buys a yacht on a 9-to-5 salary. But, of course, it’s not just about the luxury — self-employment gives you schedule flexibility, control over your career’s path, and a variety of experiences. But that’s only half of it. The flip side is teeming with pitfalls that take determination and preparation to overcome.
The lessons you will learn as you venture out to run the show come knocking fast and hard. Mistakes and failures are part of the game. They help you gain the knowledge, experience, and savviness that it takes to succeed. However, you cannot afford to go about making avoidable mistakes. So here’s what you need to avoid like a plague.
A. Failure to Keep Track of Your Revenues and Expenses
Many people fail to keep track of their cash flow, especially when their small business is based on their passions and hobbies. Sure, that passion does not include bookkeeping. However, it would be best if you still adopted accounting and money-tracking techniques early in the business. You have to if you are going to be a successful entrepreneur.
Note down the expenses immediately they occur, rather than scribbling them down on pieces of paper or the back of receipts and assuming you will remember. Consider a spreadsheet, or better yet, an accounting software. It will also be helpful when the time to do your taxes comes. Talking of which…
B. Not Doing Your Taxes Right
Tax filing season is nobody’s favorite, but it will come, and you will have to file something. First, your business must be registered. Even if you are a freelancer, you still have to register as one. Next, it would be best to find out what your deductibles and tax percentage will be to set aside the required amount.
If you are not money savvy, consider finding an accountant to guide you. You might not have the time to learn the tax laws in your region, but an expert can quickly guide you through key areas of concern. They will also leave you with enough knowledge to file the taxes on your own next time.
C. All Work and No Play
As a self-employed individual, most aspects of the gig rest on your shoulders. You will also find yourself determined to work extra hard for success. It’s expected, but it doesn’t mean you can’t take time off. It can get stressful if you don’t set aside clear periods for other affairs or fail to give yourself a break. Make sure you have some self control.
Determine the days and times when you are most productive and maximize how you utilize them. For example, be sure to take breaks and don’t take lunch at your desk. The time off helps prevent burnout and boost your productivity.
Don’t reply to messages or answer work calls during your time off. This rule cuts both ways – you don’t want to be going through work-unrelated social media posts or funny stuff while at your desk, either.
What’s more, find something interesting to do during your time off, even if you will be indoors. For instance, you could pick a good activity for the time off, such as catching up with your favorite series – it is advisable to avoid potentially stressful things like slot and casino games. Finally, don’t forget to treat yourself to a proper holiday if you can.
D. Over-Reliance on a Particular Client
This problem is especially deadly for freelancers, who are prone to losing clients without prior warning or adequate time to prepare. For example, when a client goes out of business or makes sudden budget cuts, it affects the service you are providing. If you don’t have any redundancy measures to fall back on, your business may experience brisk disruption.
You must also not assume a contract will be honored, especially working with large, established corporations. It is easy for them to go back on an agreement. However, building a solid relationship with them may safeguard your future.
You also want to trade carefully when dealing with contracts that carry lots of work from a single client. Finally, take measures to make the option financially secure – like asking for the full payment or a deposit when signing the contract.
E. Poor Time Management
Most human beings are naturally wired to work best under supervision. That is why it is often said that we work best under pressure. So, what happens when you are your supervisor? You get more flexibility, but this also means you need to be a self-starter.
Allocate time for the business and time for home, then stick to your schedule strictly. Be sure to establish clear boundaries and limits. For example, avoid responding to emails and calls when you are not working. Most of all, don’t sacrifice your business to attend work-unrelated events just because you are your boss.
F. Undervaluing Your Time or Charging by the Hour
Estimating what you should be charging for your time might be challenging, especially when you are only getting started. For starters, ensure you factor in the expenditures you might have to incur, such as taxes, shipping costs, and rent. Then, consider hiring a professional or consulting with a more experienced business owner.
Moreover, it is often more advisable to base your fee on the problem at hand rather than charging by the hour. If you are good at what you do and finish quickly, you get to move on to the next job without the temptation to stretch the project.
G. Unprofessional Presentation
Professional presentation is crucial to client conversion, no matter how good your products or services are. Any time you meet a prospect, they will be passing judgments both consciously and subconsciously. Among the must-haves for a professional outlook are:
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- A professional email address with an informative signature
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- Active social media channel(s)
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- A dedicated business telephone number
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- A professional website
H. Not Asking for Help
You have to know when to get help and be ready to act on it. Doing everything on your own can be tricky, exhausting, lonely, and sometimes impossible. You need a support system of mentors, colleagues, and other experts if you wish to succeed.
They won’t come looking for you, so you will have to reach out and find them. You also have to know when it’s time to bring in help. What’s more, surround yourself with people who encourage you, but don’t ever shy away from the critics. They might help you see something you are missing, so long as you don’t let them break your will.
Conclusion
While being your boss may mean more flexibility, it also comes with increased responsibility. Everything depends on you when you are self-employed. You have to be disciplined, create a routine, manage your time with strict adherence, and keep learning. Remember to also ask for help whenever you get stuck in a rut.
