The first time I went freelance, I was 22. I jumped in with both feet, quitting my job and starting a location-independent life.
I couldn’t be more grateful. Without freelancing, I never would have been able to travel the world. I learned more in those two years than I ever did at school.
But, if I’m being honest, I didn’t love it. The pay wasn’t great, I had little work experience, and running any business is hard. I had no idea how to deal with contracts, invoices, taxes and health insurance.
My world became less about the actual work and more about staying afloat. I did everything wrong.
Seven years later, I’m back at it. But this time I’m prepared.
The good news is, whether you’re 22 or 82, you can learn from my initial naivete:
1. I didn’t hire an accountant
At 22, I thought only hugely successful freelancers could afford an accountant. With systems like TurboTax, why waste the money?
Here’s why: BECAUSE DIY ACCOUNTING IS THE ACTUAL WORST.
During this second go-round I’m not wasting billable hours figuring out my taxes. This year I’m paying an expert to do it right the first time.
The bad news is I report taxes to two countries, which means hiring two accountants. The good news is my German accountant wants to start blogging, so I’m helping him write content in exchange.
2. I didn’t stash tax money in a separate account
This one hurts to admit.
I didn’t track any income or put money away to pay my taxes later. I didn’t even know freelancers had to pay their own taxes. Seriously. When tax time rolled around, I had no idea what I was doing.
(Remember, I was 22 and our education system doesn’t require students to learn anything about finance, insurance or navigating our tax system.)
Today, I track everything with Freshbooks. I automatically take 20 percent out of every paycheck, no matter how tiny, and immediately put it into an online savings account.
3. I didn’t understand how to calculate my rates
We’ve all heard the advice, “Charge what you’re worth!” But if you’re new to freelancing, or don’t have much experience, it’s hard to understand what this means.
I was lucky to get any clients, nevermind one who could pay $100 per hour. So I charged $25. Sometimes less. I landed and kept clients, so I assumed I was doing something right. In reality, I could barely make ends meet. I eventually succumbed to a full-time job.
This time, I calculated my rate based on my old salary: $110,000 divided by 40 hours per week equals just over $50 an hour. So that’s what I charge. Clients happily pay.
After a few months, though, I realized I can’t work 40 billable hours. With admin tasks, emails and pitching, I might hit 20 hours of client work. Which means I should charge at least $100 per hour to make my desired salary.
This feels doable in 2016, but I can’t pretend I have this whole negotiating thing figured out quite yet.
4. I didn’t organize ongoing projects
At 22 I used a “system” of notebook scribblings and email overwhelm to manage projects. How I met deadlines is beyond me.
Today, I organize one-off articles into a spreadsheet kindly provided by The Write Life. Ongoing client work goes through Asana. Goals and daily tasks to into my beloved Passion Planner.
Together, these tools help me better manage my time and ensure no projects fall through the cracks.
5. I didn’t prioritize personal projects
During my first years, I completed almost zero personal projects. I updated my blog only when I had a gap in client work. I prioritized the day-to-day management of my business over growing it.
While I love and adore my current clients, I want to double my income while also challenging myself to write types of pieces I’ve never approached before. Since I have a full schedule, this seems unlikely.
However, when I schedule in an hour only for myself each morning, I not only prioritize growth work, but I also start my day creatively refreshed.
6. I ignored freelance networks
Sites connecting clients and freelancers get a bad rap, which is why I stayed far away during my first go-round. I signed on new clients primarily via referral.
This time, half my clients come through CloudPeeps. And thanks to Danny Margulies, I’ve also started using Upwork. Just two days into his course, I landed my first client at a rate of $95 per hour.
Lesson: Freelance networks don’t mean you’re desperate or bound to get low-balled. They keep my client roster full and interesting, while also giving me a chance to expand my skills.
7. I didn’t target my perfect client
Completing an ideal customer avatar was the most powerful thing I’ve done for my business. I spent days thinking hard about the type of people I want to work for.
Turns out they weren’t the people I was working for.
While tech companies are easy to come by, I prefer working with women-owned business and creatives. I rebranded, overhauling my services and honing in on work I wanted. It meant saying no to many potential clients, hoping my efforts would pay off.
They did.
Just one month after launching my new site, I landed three long-term freelance writing jobs with creative women, all at my desired rate.
8. I didn’t spend money on my business
I didn’t have any money to spend, so I did everything myself, wasting precious time and never truly feeling “pro.”
This year I invested a few hundred bucks in education — a writing workshop here, an online course there — and a few thousand in a new website design.
To afford this, I freelanced on top of my full-time job for three months. Once I saw the difference it made, I became more comfortable shelling out for services and software that make me happier and my work more efficient.
And now that I have my taxes finally figured out, I can finally expense things.
Next stop? A virtual assistant.
9. I didn’t require payment upfront
Most freelancers make this mistake only once.
Luckily, the client who stopped responding only owed me $60, but I never did it again.
Now I collect money via sites like CloudPeeps, Upwork and Clarity. This ensures I get paid, even if the client flakes at some point during the project.
For clients who hire me through my website, I require 100 percent up front, no exceptions.
This gives me financial security and results in clients taking their investment more seriously.
10. I didn’t pay attention to my internal schedule
If I have to read another article about the ideal morning schedule, I’m never waking up again.
Apparently it’s great to exercise first thing, immediately take a shower, take breaks every 23 minutes, stop working as soon as it hits 5:00 p.m., and on and on and on.
I call BS.
I’ve spent the last six months obsessively monitoring when I’m most in flow. My findings? Everyone is different.
I’m more creative and productive first thing in the morning, so I work straight through until lunchtime. No shower. Still in my PJs. I know. THE HORROR.
But because of this, I get to relax later, leisurely finishing other projects in the afternoon and evening.
By learning my own schedule instead of copying some guru, I’m not only more productive, but I also feel good doing it.
This applies to much of freelancing. So don’t feel bad if you worry you don’t have it all figured out. It took me two rounds to feel comfortable as a freelancer, and I’m still learning every day.
Have you learned any freelance lessons the hard way? What can you share with us?