Research by Intuit estimates that by 2020, more than 40% of the American workforce, or 60 million people, will be independent workers. There is a range of benefits to adopting a freelance lifestyle, but there are always learning lessons when starting your own business.
Based on my experience and of those fellow independent PR freelancers I know, I’ve compiled a list of 10 common “rookie mistakes” that independent PR and others going freelance in the service industry often make:
1. Bad Contracts
Bad contracts will haunt you. I’ve seen independents work without contracts or leave out crucial clauses. Contracts are a safeguard for your business. Don’t do client work without one. Spend the money to have a contract lawyer advise on verbiage, or get your cousin’s friend or whomever to review it. Get something in place before you start working. Make sure you include a clause about legal recourse if you have to seek payment. Contracts also help clearly outline what’s expected of you.
2. Unclear Scope Of Work
When terms are vague, it leaves room for scope creep. Devise a clear scope of work from the very beginning. Outline the number of hours your specific budget allows for as well as the program specifics as best you can. And be realistic about what you can get done within a said amount of time. Don’t oversell just to get that business. This always creates an imbalance of expectations and it will not end well.
3. Lack Of Professional Help
No, not a therapist (although we’ve all had clients who drive us to needing one). In this regard, bring in professionals from the beginning to get your administrative house in order. In addition to legal resources, having a bookkeeper or accountant can be a godsend to stay on top of timely invoicing and especially tax prep. Late invoicing is a common mistake from independents; they just forget.
Remember that a lot of companies have AP departments that only run payroll certain times of the month and like to adhere to net 30 terms. That means if you bill late, you get paid late. Don’t put yourself in an unavoidable pinch.
4. No Tax Strategy
It is critically important to stay on top of paying toward taxes throughout the year. It’s a common pitfall to let this slide and then get hit with a big bill or additional penalties if filing late. I’ve been there. I learned early to set up an account and throw money toward it every month, like any other bill, and it helped tremendously when it was tax time to not have to drain accounts to pay.
Taxes are not something to put off. I’ve received lien notices to garnish wages for freelancers I’d worked with. Kind of embarrassing for past colleagues and businesses to see that, don’t you think?
5. The Home Office Slump
Working at home has its advantages and downsides. When you no longer have the stimulation and daily engagement of an office, it’s important to set yourself up for success.
At some point, you will grow tired of working at your dining room table. Switch things up for creative and social reasons. Work from coffee shops, the library or outside. There’s a boom in co-working venues to choose from these days (and remember, those are tax deductible).
One approach I enjoy is inviting other indies over or going to their home office or some other venue to co-work. We end up swapping stories, sharing advice and commiserating. It’s a nice boost and breaks up the routine.
6. Lack Of Business Software
FreshBooks and QuickBooks are commonly used for invoicing, and many indie PR folks I know use time-tracking software like Harvest or Toggl. Time management is crucial when getting started, especially if you take on several clients.
PR service software tends to be expensive and isn’t tailored for independent budgets. Platforms like Cision and Muck Rack cost several thousands of dollars each per year. Sometimes you can get creative. Otherwise, there are offerings from companies like Meltwater, Brand24, Agility PR and others. Shop around and ask your network.
7. Not Delegating
When you’re a one-person shop, it can be easy to fall into the mentality that you have to literally do everything. No, you don’t. With PR, there are always foundational activities for clients that involve research and building lists and calendars, for example — and you know how time-consuming that is. Tap virtual assistant services for these things. They can also help with things like scheduling meetings and other admin tasks like travel, etc.
8. Weak Network
This is important. Build a network of fellow independents — PR, content, digital marketing, design, etc. You never know what kinds of programs you might end up pitching and it’s helpful to have people on tap — and for lead generation. I’ve received great leads from fellow indies and have passed leads on. And when it’s time to scale, you’ll have trusted folks to turn to.
9. Being Afraid To Say No
Too often, independents will take on business they know is not good for them. There are red flags all over and yet they let the desire to win the business or to have the client like them override logic. This never ever ends well. Don’t make fear-based decisions. If you have a weird feeling about the client, listen to yourself. Say no. Walk away.
10. Undervaluing Your Worth
Your experience is valuable and you deserve to be compensated for it. When figuring out what to charge, ask around. I’ve been shocked to learn about some of the low-ball numbers senior people have been asking for. They, in turn, have been shocked to learn how much more money their peers have been commanding — and getting. If a client balks at your rate and wants to cut it in half, see point No. 9. You run a business now; think like a business person.
There are many more tips, but this will get you on your way.