9 Common Problems New Freelancers Face

Freelance architectFreelancers in all industries deal with the same problems due to the nature of their work.  Typically, freelancers are solo work-from-home contractors that manage every aspect of their business.  If you’re thinking of dropping your career as an employee to begin freelancing, consider the following obstacles you will need to navigate.  Unfortunately, problems beget more problems, and a shaky foundation quickly leads to a crumbly business, and many regrets about starting in the first place.

Bad clients

Clients who demand too much work for too little pay, clients who do not pay on time, and especially those clients who do not pay at all define our expectations for the next client.  Often, new freelancers do not know how to tell the difference between a good client and a bad client until after the contract has been signed.  Or worse, a contract is never signed and the freelancer accidentally does work for free, much to the delight of the shady client.

Bad pricing

Pricing that is too low attracts bad clients like flies to a dead horse.  The outrageously low price signals that the freelancer who made this bid or asked for this rate absolutely has no idea what they are doing and does not value his or her work; that they are new and can be taken advantage of.  If you price your work reasonably, you are much more likely to attract reasonable clients.

An unprofessional website

Too many freelancers have websites that look like they were built in the late 1990s.  It’s important to create a user-friendly website that clients will find aesthetically pleasing, whether you made it yourself or hired a web designer.

A professional website signals that you take your work seriously and demand to be treated with respect.  A clear photo somewhere on your homepage also helps your client to see that yes, you are human, and no, you are not likely to be okay with doing work for free.

The lack of experience

This is a tough one.  Of course, if you have just started in the world of freelancing, you don’t have much freelance experience.  Fortunately, it’s very similar to when you got your first job.  Apply for smaller, lesser-paying jobs and work your way up to well-paying gigs.  With freelancing, it is typically easier to attain higher-level jobs than if you were, say, working in retail.  A freelancer with an extensive portfolio on their professional website is very likely to be trusted for larger projects.

A shortage of initiative and drive

New freelancers start with a seemingly inexhaustible enthusiasm and as much passion as you could find in a young and overly optimistic entrepreneur.  This, like the effect of caffeine in the morning, wears off before much work has been accomplished.  Then the initiated freelancer hits an unexpected snag or feels overwhelmed with the amount of work to be done, and wonders why they ever started in the first place.

A sense of drive and ambition need to overcome all obstacles in order to succeed.  As a self-employed business owner, a freelancer has no boss spurring them on.  Since many lack self-discipline and an intrinsic sense of motivation, freelancing is certainly not for everybody.

Persistent feelings of inadequacy OR a tendency to blame others for perceived failures

Failings of motivation usually stem from feelings of inadequacy, and lack of initiative comes from a tendency to shift responsibilities.  If a freelance worker suffers from low self-esteem, where will the confidence come in to market themselves and negotiate project costs effectively?  It’s also easy for a freelancer to blame the dearth of good clients than take responsibility for the fact that their market strategy is failing.

Not researching enough

Sometimes these personal failings could be fixed through simple research.  Knowing what other freelancers have done in similar situations increases confidence in making business decisions.  Minor successes that result from positive business decisions and overcoming obstacles build motivation.  Research on business matters affects mood and level of dedication to making it as a freelancer, and is therefore crucial to the beginning of any endeavour in freelancing.

Not understanding freelance work

Many aspiring to self-employment simply do not have any idea what freelancing entails.  Contracting services to other organisations or individuals requires lots of time and effort that won’t immediately earn a profit.   Employees tired of their own work lives idealise those of freelancers, and often ignore the difficulties faced in this environment.  Before counting on notions of an optimal freelancing experience, consider your own life, strengths, and abilities.  Ask yourself these questions: “Am I truly ready to begin a long-term career in freelance work?” and “What do I want to achieve through freelance work?”

Record-keeping and tax

Employees have the luxury of their employers handling the recording of their taxable income and deducting their tax each pay-day. As a freelancer you will need to register for an Australian Business Number (ABN) and possibly for GST. You will need to keep adequate records of your income and expenses to satisfy the Australian Taxation Office (ATO) in the event of an audit. And you will need to set aside money to pay your taxes and GST. For the first year as a freelancer you will pay no tax at all until you lodge the tax return for that year — then you will have to pay all of it at once. After your first tax return as a freelancer the ATO will put you into the PAYG Instalment system where you pay quarterly tax instalments based on the estimated taxable income for the quarter. Find a good accountant to help you — ideally one that specialises in small businesses.

 

If you are currently a new struggling freelancer, tackling these problems from the bottom up streamlines the path to success.  If you ever become discouraged, remember that everyone starts at the beginning, and that you too can achieve your desired level of success if you put in the work to attain it.

Good luck on your new adventure!