A few weeks ago we introduced you guys to our new favorite term: “survival entrepreneurship.” It’s all the rage, now that mass lay-offs and unemployment in The Plague Times have forced so many of us to pivot into full-time self-employment. When you’re out of traditional employment options, survival entrepreneurship is often your only option.
That’s why we brought in Katelyn Magnuson, the Freelance CFO, to walk you through all the concrete steps you need to take to start your own business. If you missed our interview with Katelyn, go back and read it now. Because unlike your humble Bitches, she knows what she’s talking about!
Did you read it? Ok good. Now that you’ve heard from the professional business-starter, it’s time to hear from me, a decidedly unprofessional freelancer who has turned flying by the seat of her pants into a competitive sport.
Specifically, it’s time I told you all the freelancing and self-employment hacks I’ve learned through trial and error over the years. That’s right, kids…
Learn from my mistakes, children. And LEARN WELL.
1. My mistake: Sitting on my ass hoping someone would hire me.
What I know now: If no one is hiring you, hire yourself.
In order to get work as a freelancer, you need to prove that you can do it. And in many fields, that means having a lengthy list of former clients you can use as references, or a nice thicc portfolio.
When I started freelancing I… did not have those things. Instead, I bumbled around like a drunk baby panda until I fell into success entirely by happy accident.
Allow me to turn to an expert you all know and love. That’s right—BGR’s very own Kitty!
Back in the day, Kitty worked as a freelance graphic designer. That’s a job where you need a portfolio of work in order to get more work. Which put early-career Kitty in a pickle. She needed to have finished work in her portfolio to get hired, but needed to get hired to fill her portfolio with finished work.
It’s kind of like the Internship Space-Time Paradox, or the Entry Level Multi-Year Experience Catch. You know: fucking absurd.
So wee baby Kitty came up with a creative solution: she hired herself.
If she saw an ugly ad while riding the train, she snapped a photo of it, then went home and assigned herself the task of redesigning it. Her improved designs went into her portfolio to show a proven track record of graphic design and rebranding skills. Eventually she had enough “speculative work” to start winning real paid contracts.
Do clients care if the work is real or not? Absolutely not! Even now, as a seasoned pro, her portfolio is full of works from her own imagination, or unpublished options her clients didn’t choose. It’s about demonstrating your skills, whether or not someone paid you to actually use them.
2. My mistake: Feeling guilty for pretending favors done for friends couldn’t be “legitimate work.”
What I know now: Call upon your squad—and let them call upon you.
We graduated during a horrible recession. Since nobody was hiring, almost all of our peers became survival entrepreneurs. We made it work by working together.
When Friend A started walking dogs to pay her bills, Kitty designed her a logo, business card, and website. Friend A looks more professional; Kitty has portfolio pieces and a real-live happy client to act as a reference. We’re very much against working for free, but this is different! It’s a strategic short-term investment of your time to build stability for yourself and your peer group.
Trading favors for references with friends is a Level 20 use of the Friend Trade. In these days of survivor entrepreneurship, you and your squad can help bolster each other’s reference lists in all sorts of ways!
That friend you did a professional favor for once; the mentor who gave you countless informational interviews; the pal who works in an adjacent industry—all of these people care about you, want you to succeed, and are willing to talk about how great you are if it’ll bulk up your reference list.
If you find yourself completely reference-less, do a favor for a friend. Suddenly that friend is a client and able to vouch for you.
To this day, Kitty is on my list of references as a client for my work “developing and editing” her award-winning blog and successful business. You know: the blog that I co-own and built from scratch! Potential clients don’t need to know that part of the story. When I’m looking to get freelance editing work, it’s super useful to me to have potential clients call her so she can say “I am a very happy customer and would hire Piggy again in a heartbeat!”
Quick caveat: don’t use your mom as a reference. For while she will extoll the virtues of your work in the same tones with which she praised your kindergarten macaroni art, her momly enthusiasm will be a dead giveaway in a professional setting.
3. My mistake: Feeling too shy or awkward to network.
What I know now: Networking is 100% worth the cringe.
Ever hear the phrase “It’s not what you know, it’s who you know”? I think it’s pretty true, which makes me furious. Hearing it should radicalize you, if listening to six-figure-salaried tech bros talk about cutting lattes hasn’t done that already.
Yes, I literally just told you to use your squad to bulk up your reference list, but… some people’s squads are the Winklevoss twins.
If you have friends who’ve agreed to act as references, take it one step further and see if they’ll make their positive experiences public. Companies are less likely than ever to give detailed references on former employees, but potential clients and employers still want to know you’re easy to work with. So ask a few (non-mom) clients to write LinkedIn recommendations or reviews on Google, Facebook, Yelp, etc. Make nice words about you very easy to find.
Look for industry-specific groups on whatever social channels you use. Join alumni groups for any schools you’ve gone to. And don’t be shy about putting yourself out there in a post asking for work. One of my first big editing projects was a novel written by a college classmate, and he approached me on the basis of a Facebook post in which I basically said “I’ll do anything just please fucking hire me.”
And YES, you absolutely need LinkedIn. C’mon. We’ve covered this!
4. My mistake: Trying to pass off my Arwen cosplay photos as professional headshots.
What I know now: Have separate, dignified contact information for your business.
For years I used my personal cell phone number as my primary contact for my freelance editing business. It worked fine, in that I was already paying a cell phone bill.
What was not so fine was the fact that clients called at all hours of the day and night, and I picked up, thinking it might be a non-work call. We’ve been over this before: it’s important to your health and sanity to keep a firm separation between work life and home life, even when you’re working from home. And that means keeping a separation between your personal and professional contact lines as well.
It’s easier than ever (not to mention free) to get a secondary phone number through Google Voice to use as your business line. And buying a domain and email address is also relatively affordable. No one has ever been considered professional with the email address “RewdBoi69420@yahoo.com.”
If you’re not willing to buy a domain, your name at Gmail or whatever is fine. Just make sure your photo and signature are dignified and identifiably you. “Dignified” doesn’t even have to mean paying for a professional headshot. Mine is a picture of me in a blazer taken in my own backyard by my roommate. And he was definitely high at the time!
5. My mistake: Working on project after project at a breakneck pace.
What I know now: Schedule time to stay on top of administrative tasks.
So now you’ve got your first three clients. Who cares if they’re your mom’s college friend, a Craigslist rando, and one of your seven roommates?! THEY STILL COUNT, SO GOOD JORB.
Now you need to manage how the work actually gets done.
Projects are great because projects get you paid! And money can be converted into all sorts of wonderful things, like food and shelter and those gross yet magical foot peels! But you have to account for the administrative time you need to back up your project files, send invoices, order supplies, balance your books, continue your education, look for new clients, and all the other small tasks of self-employment.
Don’t accept so much work that you have no time to stay on top of these tasks. Here’s more advice on how to stay on top of everything that needs to get done:
- Help! I’m Procrastinating and I Can’t Get Up!
- My 25 Secrets to Successfully Working from Home with ADHD
- How to Successfully Work from Home Without Losing Your Goddamn Mind (Or Your Job)
- Eight (Free) Time Management Systems to Try in 2020
- Stop Measuring Your Time in Beyoncé Hours
6. My mistake: Accepting work that promised me prestige, exposure, or paid work in the future.
What I know now: NEVER WORK FOR FREE.
There is no situation that justifies working for free.
You owe it to yourself to earn, at absolute minimum, the amount of money you need to eat food, pay rent, and clothe your body during the hours you’re doing that work. Although if you work from home, the clothing part is blessedly optional.
You also owe it to everyone else in your industry to charge fair market prices for your work. If you under-charge, clients will start to value your work less and less… which means they will expect rock-bottom prices from your competitors as well. Suddenly you’re all making jack shit for your hard work. Don’t join the race to the bottom.
When in doubt, you know how to answer an offer of exposure in exchange for your work: “People die of exposure.”
7. My mistake: Charging a price I thought was fair.
What I know now: The prices I thought were fair were way, way too low.
We’ve talked about this before, but it bears repeating: you deserve to be paid fairly for your work. But how do you figure out how much to charge? Allow me to introduce you to: ~*~*The Internet*~*~.
The internet is home to all sorts of information, including what various goods and services cost. Glassdoor’s salary index, for example, literally lists the average pay of various professions by region and experience. When I was but a wee baby editor, I lurked on various professional forums asking questions of more established editors and reading articles in industry journals (online, of course, I’m not an animal) about pricing models.
The information is out there, and you should trust the wider professional community.
You don’t need to pull a number out of a hat. And you certainly don’t need to charge a price you would personally be comfortable paying. Your client is not doing you a favor by giving you money. They are compensating you for your time, expertise, education, and equipment. And it would be a mistake to dither about the cost of all those very valuable things.
On a more emotional level: if you feel totally comfortable with your prices, it means they’re too low. It’s better to be just expensive enough that not everyone can afford you. A few high-paying clients are much easier to manage than a ton of those cockroachy deadbeats making you chase them for $50. You will know you’re at the right number when you feel a little nervous saying it aloud.
8. My mistake: Having a reliable price, year after year.
What I know now: Plan regular price increases.
When I started out as a freelancer, I charged $0.015 a word. And I’d even round down on my final invoices because I felt so bad about charging my clients. Which is… so bass-ackwards it pains me to even write.
But I soon raised my prices to $0.02 a word. And within a few years, I was up to $0.03 a word for editorial services. Kitty did the same, raising her prices $10 an hour every year.
Every time Kitty and I stepped up our prices, we would lose about 20% of out clients. Which is a good thing! It gives you more time to focus on your highest-paying clients, and to find more clients like them.
At first it stung to have to say good-bye to clients who could no longer afford my rates. I worried about losing work. Then I realized: I was making more money. I didn’t have time to miss the clients I lost, as they were quickly replaced by higher-paying clients.
And it was remarkably easy. Here’s a script:
Hello, [Client]! Hope you’re doing well.
I wanted to send you a quick email regarding an upcoming shift in my pricing. In consideration of my growth in experience and speed, I will be raising my prices from $X/hour to $Y/hour on all new projects starting 60 days from today.
You’re one of my favorite clients and I hope you’ll stick around! But if that’s not in your budget, please let me know. I have a few younger freelancers I mentor who would be glad to take up your work at a similar price point.
Some people like to keep their clients’ rates steady, and only raise prices for new clients. I personally think it’s a bad idea. In my experience, industries are very small. People talk. I’d be very annoyed to know someone charged me $500 for a service they provided to someone else for $300.
And raising your prices gives you an opportunity to pay it forward!
Any time someone said they couldn’t afford my higher rate, I was able to refer them to a younger, less experienced editor with a lower rate—someone just starting out in her career who could really use the work.
9. My mistake: Thinking my little projects didn’t need formal contracts.
What I know now: I don’t lift so much as the dainty pinky finger on my teacup hand without a contract.
Entire websites are dedicated to stomping on the disgusting cockroach of the freelancing world: the non-paying client. Here are some methods I’ve learned (the hard way) to get clients to behave.
- Make them sign a contract. It doesn’t need to be longer than a page, and it doesn’t need to have fancy legal language. But it should outline the terms of your arrangement so that if anything goes wrong, you can point to it and say “You promised in writing to not be a dick.”
- Ask for half of your fee up-front. I used to trust clients to pay me at some point after the work was done. Then it took me nearly six months to collect on a $400 invoice. And that’s nothing compared to some horror stories I’ve heard from other freelancers. Now I ask for 50% before beginning the job. This serves a few purposes: a) I don’t do a lick of work before I’m assured I’ll be compensated, b) even if the client yeets on the second half, at least I haven’t worked entirely for free, c) it assures me the client is good for the money, and d) it puts me on the hook for the work, which the client finds reassuring.
- Dictate the terms of payment. Prefer to be paid via Venmo? Personal check? Direct bank transfer? Small bills with non-sequential serial numbers? Tell your client before you start the job. Then it’s their problem to figure out how to pay you. (Keep in mind that international clients have restrictions on how they can pay you. In these cases, I’m willing to be flexible.)
- Be clear about due dates. Give your clients an estimate of when you’ll finish the job… and pad that estimate a bit just in case. The client will be psyched if you deliver early, and if you end up needing more time than you estimated, you’ll be glad you built it into the schedule. Likewise, give the client a due date for final payment (I usually allow two weeks to a month after completion).
- Enforce consequences. If your client is late in paying you, you have two options: charge late fees, or hold their work hostage. You’d be shocked how quickly people find the money the promised you when you charge them an extra 10% for every day they’re late. (Unrelated: it’s always the rich ones who don’t pay on time.)
10. My mistake: Keeping track of expenses by filling my purse with crumpled-up receipts.
What I know now: It pays to stay on top of basic accounting.
Regardless of what you need to report to The Man, I would advise you to keep very detailed account of your payments and income related to your freelance business. Keeping these notes will make filing your taxes a helluva lot easier, and will keep everything nice and organized and clear.
Your future self will kiss you right on the lips if you keep a simple profit and loss (P&L) record as you go. It sounds intimidating, but it’s so not. It’s just a simple list of the money your business has brought in versus the money you’ve spent.
Kitty and I keep a P&L in an Excel spreadsheet on our shared drive so we can both update it periodically. Although Kitty always waits until two days before our taxes are due to stay up late, panic-entering hundreds of merch orders, Patreon donations, hosting expenses, and mission-critical cheese cracker purchases because
you should do as we say, not as we do. procrastination is the way and the light
11. My mistake: Paying taxes like (ಥ_ಥ)
What I know now: Paying taxes like (¬‿¬)
I would certainly never advise anyone to not pay their taxes.
Certain types of income are very difficult for the IRS to track, because they have no way of knowing about it. But I would never tell you that it’s highly unlikely that they’ll ever come looking for that income. Because that would be wrong and illegal.
So I’m definitely not letting you know that it’s very easy to hide money from the IRS if it doesn’t come with a W-2 or a 1099. That includes cash tips, independent contractor payments of less than $600 in one year, under-the-table work, and money exchanged between private parties (like your SO Venmoing you their half of rent, or a friend paying you in cash to knit them a scarf or whatever).
You may run your business at a loss at first. That’s pretty normal. But if you do turn a profit, prepare yourself mentally for how badly self-employment taxes hurt.
The IRS will want about 15% of everything you make, no matter how impoverished you still are. So if you work your ass off to earn $12,760—the so-called “poverty line“—the IRS will expect $1,914 of it. It’s a flat tax, there’s no bargaining with it. The best way you can mitigate the hurt is by:
- Minimizing the amount of income you claim
- Maximizing the business expenses you claim
- A percentage of your rent if you have a home office
- A percentage of utilities like electricity and internet
- Business-related travel expenses, including (potentially) a percent of your car, insurance, and gas
- Classes, books, and paid tutorials related to your craft
- Attendance fees to conferences and trade shows
- And many, many more
- Setting about 20% of all your income aside as a safety net to pay for taxes and other unexpected expenses
- Building taxes into your pricing structure
What mistakes have YOU made?
With survival entrepreneurship becoming more of A Thing in these trying times, I’d bet my left tit (that’s the good one) you guys have more to say on this topic. The comments section is below—you know what to do!
Here’s more from your beloved Bitches on that freelance, self-employed life:
- Should Artists Ever Work for Free?
- How to Find Remote Work: On Getting the Elusive Work-From-Home Job
- Freelancer, Protect Thyself: The Importance of a Fair Contract
- Stop Undervaluing Your Own Work, You Darling Fool
- Becoming a Millennial Entrepreneur (in the Midst of a Pandemic) with Katelyn Magnuson
- Romanticizing the Side Hustle
- The Delicate Art of the Friend Trade
We know a lot of our readers are partially or fully self-employed as freelancers and independent contractors. So we want to hear from you! What mistakes did you make early in your career that you wish you’d avoided? Help some siblings out and tell us about them in the comments below!