Common mistakes beginner freelancers make

Written by Xolo
on April 16, 2024 3 minute read

Becoming a freelancer can be one of the best decisions in your life…or a new locus of unwavering pressure if you don’t prepare yourself for some challenges. 

Just like any other decision in life, freelancing isn’t fail-safe. 

Since many people have walked before you, you can learn from their mistakes.

Working without a signed contract 

Never ever start delivering a service before you put things in writing. Period. 

A work contract is a mutual agreement on the scope of work, payment terms, and obligations of both parties. It should be ironed out in advance to avoid any unsavory questions like “What happens if the work gets delayed from your end or the client’s side?”, “How many revisions are allowed?”, “When will I get my money?”. 

If the engagement goes awry, you have a legal document, which protects your right to getting paid. Plus, it’s a document you can always point toward when the client makes unreasonable demands. 

You can find plenty of free work-for-hire contract templates or use an online contract builder. Customizing a work contract takes minutes, but saves you hours in potential headaches later down the road. 

Charging too low 

As a new freelancer, you may be tempted to lowball your offers. That’s a rookie mistake 60% of beginners make.  

But being new to freelancing doesn’t mean you’re new to the job market. Don’t undervalue your skillset and past work experiences. Likewise, don’t go with the recommended hourly rate for your profession, since such employee hourly rates don’t factor in self-employment taxes and business operating expenses. 

If you’re unsure what to charge for this or that, browse recommended rate guides or post a question in a freelancing community to get some peer feedback. 

Commingling personal and business finances 

Freelancers may want to avoid the hassle of opening a new bank account when they start out, and rather channel funds to a personal account. 

If you’re registered as self-employed, this is legally allowed. But commingling business and personal funds will likely make the end of a financial year a nightmare. You’ll have to sort through countless transactions to highlight client payments and business expenses, then do a painful tally of those. 

To avoid that, open a business bank account. With Xolo Go, you can get a free virtual business bank account in several clicks to receive payments via SEPA bank transfer, Visa, Mastercard and American Express. Other freelancer-friendly banking options would include Revolut, Monzo, N26, and Lance.

Not building a financial cushion 

It’s normal to go through a feast and famine cycle in your first year of freelancing. What’s problematic is when you don’t plan ahead for the rainy day. 

Don’t spend your entire income each month. Create a system of pockets where you set aside extra money to cover: 

  • Monthly business expenses 
  • Tax payments 
  • Delayed client payments 

It’s important to maintain a business bank account, with a minimum of one month's worth of personal and business expenses as your safety net. 

Tolerating late payments 

Late payments are not acceptable. If a delay happened once, give the client a polite, but firm reprimand. If late payments somehow become the norm, fire that client. 

To avoid late client payments:

  • Be upfront about acceptable payment terms 
  • Introduce contract clauses for charging a late fee on overdue invoices 

Sign up for Xolo Go and set automatic payment reminders for your clients


Going with the flow

You’re in charge, and you must be proactive about business management. This means being intentional and somewhat selective about the work you accept. 

By accepting unsuitable projects — low-paid, irrelevant, or plain boring tasks— you’re limiting your ability to pursue more rewarding work, and to grow your personal brand. 

Don’t accept every request falling into your lap. Create a set of criteria for evaluating different clients and projects. Stick to it. 

Not having a work-life balance

No vacations, long working hours and no time for other personal commitments aren’t the way to go. Freelancing is about flexibility and freedom to focus on things you love the most.  

Sure, growing your income is a great goal. It’s not worth the sacrifice of your physical and mental well-being. There are many things you can take advantage of to help in avoiding the burnout train.

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