Ask the cubicle expat: What are the biggest mistakes that newbie freelancers make?

Toward the end of Sunday’s live chat on Writers Revealed about how to be a successful entrepreneur, one woman asked what mistakes newbie freelancers make and how that hinders their success. I talk about this a lot in the book, serving up many of my own wildly embarrassing gaffes from my first few months working solo, including:

• Quitting my job with no money saved, no clients, no business know-how, no networking savvy, and no contacts
• Signing truly shitty contracts that effectively had me working for peanuts
• Agreeing to work with clients who basically had “666″ tattooed on their forehead

Emira Mears of Boss Lady, who I had the pleasure to do Sunday’s live chat with, also wrote this incredibly sharp post about how we fempreneurs have a tendency to undercharge for our time and talents. (For pep talk on setting and negotiating rates, see my previous post.) And here are a few more rookie freelancer screwups, culled from a Q&A I recently did with Work It, Mom:

• Spending too much money on equipment, supplies, and consultants you don’t need right off the bat
• Working in a vacuum rather than finding other independent professionals to bounce ideas off of, share war stories with, and help you feel less isolated
• Failing to sufficiently research the market you’re getting into
• Not being realistic about how much money you need to keep the business afloat and a roof over your head
• Not educating yourself about what makes a good contract (so you can steer clear of the crappy ones)
• Not keeping set business hours, which often translates into working round the clock

Feel free to share any and all of your own fempreneur fuckups in the comments. We’re not here to laugh at each other, only to help. And telling others what stupid business move you would never make again can certainly help them avoid stepping in the same steaming pile of crap.

6 comments July 31st, 2007

Nifty freelance rate calculator

AlmostGotIt’s comment on a recent post of mine raises a question I hear a lot: How much more should I charge as a freelancer? Is there a hard-and-fast rule or formula? I’ve also heard a variety of percentages we freelancers should be charging above the corresponding employee rate — 30% more, 40% more, 50% more, etc. (Here’s one take on what to charge.)

But rather than worry about whether I’m living up to some universal formula of freelance wages, I’m most concerned with whether I’m pulling in enough money to cover my business expenses, unbillable hours worked per project (invoicing, contract negotiations, and the like), personal benefits, tax requirements, and living expenses. And of course, I’m concerned about whether the rate is fair for the industry, geographic region, and my experience level.

Of course that means doing the math and necessary research, but I think crunching the numbers yourself can help boost your confidence when it comes time to haggle with clients. If you know you need, say, $500 a day to cover your business and living expenses, you won’t settle for anything less.

I offered up some negotiation tips here. But today I wanted to direct your attention to this cool hourly freelance rate calculator. I especially like the “here’s your break-even rate” feature. I think this information can also help you strengthen your negotiation skills. If you know a client’s only willing to pay 2% above your break-even rate, it will be easier to stand your ground and walk away if necessary (that is, if you’re looking to do more than merely cover your business and living expenses and would like to make an actual business profit). My one gripe about this calculator is that it doesn’t have a field for utilities other than telecom, but you can add that in with the rent or “other expenses” fields.

9 comments July 31st, 2007