- Image by Wease via Flickr
Written by Karen D. Swim
Many of you left behind the shackles of employment to brave self employment in 2009. You are basking in the glow of your freedom as you realize that no one is the boss of you. Put down your bowl of Froot Loops® and step away from Oprah because I am going to save you money and time by helping you avoid the mistakes common to new business owners.
- You are an entry level employee required to work your way up the ladder to earn the promotion. Welcome to self employment . You have been promoted from chief bottle washer to chief of everything. Start acting like it.
- Fees are based on time in business rather than value offered. Yes, you are a new business owner who will have to build a portfolio of successes but presumably you can actually do the job. Your past experience has value even if you obtained it as an employee. There is a prevailing myth that new business owners must charge below market value in order to establish their worth. This is utter hogwash. I am quite frankly puzzled by the thought process but let me clear it up for you, your clients are paying you for what you can do for them. It’s up to you to price it accordingly.
- People will do exactly what they say. Contracts exist for a reason. You do not have to overwhelm your clients with lengthy agreements but you should document the scope of work and terms and gain agreement in writing before you begin a job. Whether you sell a product or service, the terms and expectations should be articulated in writing.
- Business will come to you. You meet someone in line at the grocery store and get into a conversation that results in them saying they need your services. You give them your card and they promise to call after the new year. Bless your heart, you believe them. You have to develop leads, and follow up with them. I’m not proposing that you stalk them but follow-up is critical. People get busy and priorities shift. If you don’t follow up, when the problem crosses their radar screen again, they are going to call the person that comes to mind and it may not be you.
- You cannot afford to hire help. Hire early and hire often and you will earn more and avoid the trap of equating being busy with success. Build the cost of a Virtual Assistant (VA) into your jobs. Many VA firms have pay as you go structures so that you are not locked into a long term contract. You will make more per hour when you share the workload.
- You have to know everything. As an employee when you did not know something, you did not declare yourself unfit for your job. You gained the knowledge you needed to do the work. Knowledge is easy to obtain. Do not allow it to hold you back from pursuing a bigger project, or trying a new challenge.
- You have to know everything today. Knowledge is so easy to obtain that you are now attending three teleseminars per week, subscribed to 100 must have newsletters and have more ebooks than files on your computer. Limit the information to what you need to know and will apply now.
Being in business is hard work but so rewarding. However, you don’t have to suffer the newbie blues by making blunders that can be avoided. Don’t be afraid to ask for help if you get stuck. There is always someone who either knows the answer or can point you to someone who does.
Please feel free to add to the list with your tips, suggestions or questions in the comments.
Resources
StartUp Nation – Discussion forums, community support, resources and vendors
Freelance Folder – Blog, forum and resources for freelancers or solo professionals
Success In Sweatpants – Sweatpants Manifesto, Coaching programs and advice on building a 6-figure freelancing business
IAC Professionals – VA firm that offers a wide range of services including admin, accounting and marketing
Business Tools and Resources – Communication, bookkeeping and other tools useful for any business owner
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Cindy, thank you so much for your comment! I am so glad that you took the time to share from the other side of the desk! I brought my “corporate” mindset to my own business and I wholeheartedly agree with you! If I could frame your comment, I would so that people would finally “get it.” Thank you, thank you, thank you for this valuable perspective!
I’m not a freelancer, but in my day job I’m in purchasing, which puts me on the other side of the desk. I’d just like to address a couple of points: First, sales people are not automatically annoying. They only become annoying after the fifth or sixth “follow-up” call.
Also, underpricing your services is a sure way to lose the job. I’m instantly suspicious of a bid that comes in much lower than the others. Price your work in line with the marketplace, and I will likely not have a clue that you are the new guy on the block.
Just thought you might like some comments from the “other side.”
Cheers!
Cindy´s last blog post..Sleep More, Weigh Less
@Meryl, I get the question all the time and I try my best to point them to resources and explain how they can arrive at their own. You’re right it is a complex issue and you have to understand your market and competition but all too often newbies do the research and then short change themselves.
@Rebecca, you are so right! It is way to easy to have your business take over your life until you have no life. Great point and I like your method for sticking to it!
Excellent points, Karen! As a business owner, I’d add another tip: Take time off for yourself.
Sounds like a no-brainer, but when I first started up, I was surprised by how many hours I spent working (days, nights, weekends …). Face it: There’s always something to do. Accounting, marketing, networking … oh yeah, and let’s not forget doing your actual job (copywriting, in my case)!
For your sanity (and your family’s), take some time off for yourself. I actually schedule mine in my planner!
I’ve had new freelancers emailing me asking what to charge (#2). I am not trying to be rude — your answer explains exactly why I can’t help them figure that out.
Pricing depends on so many variables even if we’re both writers. Experience, content, knowledge, etc.
Meryl Evans´s last blog post..7 Traits of Bad Twitter Follows
Roland, I’ve lived these mistakes and I’ve overcome them and helped others do the same. If I can help someone avoid them, I’m so happy to do so.
Friar, you are far too smart and too good for your company. 🙁 I bet if you read Good Honest Dollar you will find more infractions that your company has committed. When Basile the Dog gets published…you can fish and write all day. 🙂
Andrew, great points! I have seen so many entrepreneurs fall into the pricing trap and it is not necessary. If I can help even one person get just this point I would be elated. Instead, people take on lots of little jobs, work lots of hours and at the end of the day they are burned out and not making much more than they would have if they had spent the day flipping burgers. Pricing correctly also leads you to higher value clients. Good clients (emphasis on good) mistrust cheap providers believing that they will also receive cheap quality. Yet, everyone chases the lowball jobs to “build credibility” and those clients are more hassle and headache than clients who will pay you more because they want value.
Ulla, #4 is huge for so many people – men and women. As Andrew noted, it is not limited to women. It really seems to be very true of “nice” people. I don’t mean to imply that those who are comfortable with it aren’t nice but I mean the people that you walk away from and say, “oh my gosh they are so nice!” In fact, later this quarter, I will try to present some tips, perhaps even by video to help everyone grow more comfortable with self-promotion. It is useful to everyone whether you are an entrepreneur or employee and a large number of people struggle with it.
I totally and absolutely like this post So true, and exactly the problems I see in front of me. Especially #4, #6 and #7.
@Karen
Wow….
You’ve JUST described my company to a tee! 🙁
Friar´s last blog post..Grampa Friar Remembers Telephones
Karen,
Firstly, in response to Ulla’s question, I have not personally had the experience of being in business for myself, but as a man, I could imagine that I would personally suffer from similar fears with respect to follow up.
Maybe not everybody suffers from such fears, I don’t know. But I would imagine that many would. I know I would.
More broadly, Karen, whilst I cannot speak from experience, the above points sound to me like a great deal of common sense.
I particularly like your second point. I don’t know where the idea of charging below market value springs from, but I do not see how you could raise prices at a later date without losing some of the clients which you may have gained under this strategy.
Simply put – common sense would dictate the setting of full market prices from day one, and providing a level of service which is at least as good as, if not better than, that which is expected under common industry standards.
Andrew´s last blog post..Fund managers are not paid to hand money to scam artists
Karen,
I am an employee myself, but I’ve got a few friends who are new business owners, and we talk quite a lot about their experiences. Your post is very helpful. Most of my friends have difficulties with #4 – Business will come to you. My female friends are afraid about getting on other people’s nerves when they follow-up. What about men – do they have the same difficultiies?
Ulla Hennig´s last blog post..Mozart: Rondo Alla Turca