I’ve always liked the title “freelance entrepreneur.” In contrast to salaried workers who lead more predictable work lives, freelance entrepreneurs enjoy pursuing ideas that inspire them most. They can take creative risks and work as hard as they want for as long as they want.
But is there a dark side to freelance entrepreneurship? Yes, especially if the freelancer squanders the opportunity to reap the full financial rewards of business ownership.
I like it best when entrepreneurs take control of their careers, work day and financial future all at the same time.
Here are five costly mistakes that can take all the fun and profit out of freelance entrepreneurship.
Marketing you not your company. Freelance entrepreneurs who make the most money over time understand the value of promoting their company brand more than their personal brand. Company brands adapt with greater ease than personal brands to changing consumer tastes. Plus the most lucrative repeat customer relationships trust that the founder is serious about the business of being in business. And of course, it’s easier to sell a company brand to another company at the time you don’t want to work anymore.
Becoming complacent. Freelance entrepreneurs should never stop looking for new customers, but they do all the time. Business is about change. Projects end, budgets get cut, natural disasters interrupt everyday operations and so on. Even If you think you have “enough business” today, you have to schedule time every week to solicit new customer relationships to ensure that you don’t ever run out of customers.
Assuming satisfaction. Not all customers will be pleased with your work and will resist payment or consume your time with complaints and change order requests. The best way to avoid customer unhappiness is spend more time before a job begins discussing customer expectations in detail. This means not assuming what the customer wants but asking what the customer wants. Document the results in a service agreement that is signed by both parties. Don’t forget to define when customer payments are due and how disputes will be resolved in the service agreement too.
Risking too much. When you are a business of one, you bear all the financial risk for unexpected problems and freak-of-nature surprises. To the extent that your income is solely dependent on your personal health and productivity, consider obtaining a low-cost small business liability insurance policy and a disability insurance policy. Also, if your freelance business is organized as a sole proprietorship, consider forming a Limited Liability Company or corporation.
Lacking strategic vision. What does success look like? What do you want to achieve in business? This is a question I ask all freelance entrepreneurs. The way to get more out of your work day today is to have some purposeful goals for tomorrow. Having a few goals doesn’t have to take the fun out of being your own boss, but it will make you a better boss.
Susan Schreter is a veteran of the venture finance community and entrepreneurship educator. She is the author of the comprehensive new book, Start On Purpose which provides specific action steps to start a new business, attract investors, and make any new business idea bigger, better and more lucrative. Follow Susan @takecommand