The rise of freelancing has paved way to a growing gig economy. After all, the pros of freelancing outweigh the cons of working for someone else. Even fresh graduates are skipping the traditional route of working for others, choosing to take the plunge into freelance directly. But boy I wished I had put on my safety gear before taking the plunge! That is not to say it is wrong to follow that route, but a little preparation can save you many costly mistakes.
1. Plan ahead with realistic goals
The saying is true, “If you fail to plan, you plan to fail.” Without a proper plan in place, the transition from where you are to freelance can be a bumpy one. Have at least 6 months of savings in your reserves to prepare you for unforeseen circumstances. Review your goals every 3 months and make necessary changes to improve your success. Balance your short- term goals with long-term goals. It can take several little goals to achieve a major goal. Setting too large a goal can risk you getting easily disheartened if that goal is not achieved, so keep your goals realistic and appropriate.
2. Sole Proprietor or Private Limited?
While you don’t necessarily have to register yourself with ACRA as a freelancer, many companies still prefer to work with people who are already registered. Being a sole proprietor may mean less headache when it comes to filing your accounts, but it opens up risk to unlimited personal liability should you ever be sued. On the other hand, private limited limits your liability to that of your company and not to your personal assets, but filing your accounts will require a third-party auditor. Weigh in the pros and cons for each, and decide which path is best suited for you.
3. Freelance is 70% business, 30% creativity
Behind those fancy portfolios and that impressive clientele of successful freelancers are countless hours spent on selling their business more than creating their works. Business is what keeps your freelance business going. You will realise that time runs out quite quickly while you are doing both business and creativity, which brings us to the next point.
4. Manage your time well
As a freelancer, you don’t have colleagues or a boss to motivate you. You are now fully independent and totally in charge of how you spend your time, be it meeting with clients, filing your accounts or upgrading your skills. Self-discipline is key so divide your time on the things that matter most to your business.
5. Bill your clients based on value than on price
It is tempting to compete based on price. After all, who wants to lose business with a potential client? This may be true when you are starting out. However, it is one of the biggest mistakes many freelancers make by short-changing themselves in the long term. Price the client based on the value you bring to the table – assurance, quality, strategy, service, problem-solving and excellence. Help them see how your work helps their businesses. It is okay to lose a few clients along the way, but you will feel way better working with clients who respect your worth and who can keep your freelance career sustainable.
6. Know the legalities in your industry
Be well informed about your rights, especially intellectual property rights when it comes to selling your work. Issue a non-disclosure agreement if you are pitching your work to a potential client. All these will come in handy when drafting out your contracts and addressing issues to your clients. It also helps keep you away from trouble and protect your work from being exploited.
7. Accept that failures will come your way
Failure is every freelancer’s nightmare. Whether a client chooses to cancel your project or
there are no new projects coming in, the setback on your emotional and mental health can take a toll. No business in this world is immune to failure. See failure positively and learn from it. Never allow failure to turn into fear, which can ultimately freeze you instead of taking action. Remain creative than reactive.
8. Have a financial contingency plan
You’ve learned from your failures. Now ensure that a contingency plan is in place at all times. Adjust your cost of lifestyle to weather you in hard times. Look elsewhere to earn money than fall into the dangerous habit of cutting cost. Don’t fall into the temptation to put all your eggs in one basket such as making risky investments too early. Settle your debts first and contribute to your CPF whenever possible. Get your finances in order.
9. Never stop learning even when times are good
Even if you’ve reached your height of success, don’t let that tempt you to fall into complacency. New competitors spring out every day and trends in your industry are constantly changing. Always keep yourself relevant even in good times, because nothing in this world is forever.