If you want to be a good freelancer, you have to read this article, how to avoid 5 biggest common mistakes made by new freelancers. Freelancing is an interesting job option for today’s young generation. This may use as a part-time job also. But, if you want to work as a freelancer, at first you have to your printed business card. Because you have the duty to acquaint you with the rest of the world. Various companies will give you work after seeing your work efficiency. Also, you have to set up your Facebook page or Twitter account.
Before we start any business, we should learn about the subject clearly. This is not a great idea for regret about that. Rather we should think about it before we start it. If you have no idea about Freelancing, then it would be a very difficult task for you. You should not compromise anything with your financial matters.
You should not think over such matters which you are not doing. Even you do not interrupt your sleep at night for any trivial matter. Those who are going to start their career as a freelancer often do some mistakes which they should not do. Accidentally it may occur. So, here I try to give you some tips to avoid such mistakes that will help you to be a successful Freelancer. So, do not worry. Just follow these tips.
How To Avoid 5 Biggest Common Mistakes Made By New Freelancers:
You Should Not Keep Your Finances Separated:(Avoid 5 Biggest Common Mistakes Made By New Freelancers)
When we pay for something, we often pay it through our personal credit card or personal bank account. It is a big mistake. We should not do that.
If we do not separate our finances, it may be the cause of our nightmare. We have to go through our personal passbook to find which expenses are personal and which are business related. It would be a great hazard to us.
Almost we all have an LIC policy. But, sometimes it may be very difficult to prove that our business is a different entity if we do not have any separate credit card or bank account. It would be very hard to prove the different entity.
If we do not set up any bank account or credit card, it would be very difficult to run a freelance business. Without making any credit card or bank account, we can not build our business’ credit. And if we can not be able to make business’ credit, then it will be very harmful to borrow money in near future.
The small business administration says some important information about business credit. A business credit score is the pivotal thing of the financial reputation of your business. You can build up a business credit score if you open up an account in the name of your freelance business. By making positive business credit score, you can earn huge amount of money when your business is growing.
Forgetting To Set Up An Emergency Fund:(Avoid 5 Biggest Common Mistakes Made By New Freelancers)
After seeing so many facilities of freelancing, often people switch off their old business and storm down into freelancing business. Even it may happen that you may build up your freelancing career and then leave the old business because you have now believed that freelancing may be a good career option for you.
Whatever business you take, but you have to be sure that your future will be secured. Because our main aim in life is to secure our future life. Whatever we do in present, it’s impression will fall in future. In this respect, the first priority is to build up an emergency fund for our future. We should save the expenditure for 3 to 4 months. Some freelancers try to save almost 8 months expenditure. It is a great idea.
You may think that why should we save for our future expenditure. It is very much necessary. Because freelancing is a very uncertain job. Though you have great anchor clients who may pay your regular bills, but you have to confirm that if there is any economic downturn or any other crisis, you can overcome the situation. There may sometimes when no one is willing to hire a freelancer. So, you have to prepare for all these adverse situations by making an emergency fund.
Forgetting To Save For Retirement:(Avoid 5 Biggest Common Mistakes Made By New Freelancers)
In this dynamic world, it is inevitable that we have to retire one day. History to leave the place for a young generation. So also happens in the case of freelancing. After a particular time, a freelancer has to be retired. But this time money problem appears very badly. Because your lifestyle continues on a certain amount money. So, we should think about our future when we are able to earn money. There are many freelancers who do not put importance to save money for future. But it would be better if save some amount of money when our employers gave us our fees.
We have to make sure that we would save at least 10 to 20 percent of our income. Then we should keep the money in a safe place. You can put the money for any pension scheme so that you get a handsome money after your retirement.
It is very much important for a freelancer that where he/she put the savings money. A freelancer should be more careful about saving the money. Because at the end of all these, a freelancer should be more serious about his/her personal and business finances.
Not Realizing You’re Personally Liable For Business Loans And Credit Cards:(Avoid 5 Biggest Common Mistakes Made By New Freelancers)
It may be necessary for you to buy some business related equipment for your freelancing business. When you want to start building your business credit, you may take a loan in the name of your business.
But, according to the small business administration, there are some rules which will play very hard with you if you do not pay the debt. According to the rule, if your business credit is unable to repay the loan, you would be responsible for that.
So, you have to be careful before you take the loan with your business credit. It is better to buy a computer for your business, but you should not totally depend on loan. Rather you should save some amount of money than to take it on loan.
You all are aware that a freelancer’s income is floating. It means a freelancer’s income is irregular. It may be high and on the other hand, it may be low. You have to be more careful to fulfill the requirements of your clients as the payment depends on their satisfaction.
Not Considering Setting Up An LLC:(Avoid 5 Biggest Common Mistakes Made By New Freelancers)
There are lots of reasons why should you set up an LLC for your freelance business. These reasons are so strong that you can not avoid them.
The first reason is that you can face a professional liability. As you are working in the freelancing industry, you may face this type of liability. Suppose you are an accountant in the freelance industry. If any client claims that you do not return their debts, then they can seize your home also. You have nothing to do. You can only watch this and regret your deed. They can take up all your personal assets. But you set up an LLC for your business, then your clients cannot take up your personal belongings. Your clients can take up your business assets.
There is another reason to set up an LLC for your freelance business. You can use it in order to plan your income and future savings. If you see you are incredibly successful in a year, you can save up a large sum of money for the betterment of your future. Even you can take the money in the next year, when your business may not be going quite well.
I think, if you follow these 5 mistakes and try to avoid these mistakes in the way of your business career, you may be a successful Freelancer. Only you have to remember these tips and use it practically when it is necessary. If you like my article, please like and share this article. And also give your valuable comments, so that I can enrich myself for my future writings and to be perfect.