Freelancing gives workers freedom, but pitfalls often arise that challenge profitability. Rather than earn a decent amount of money, many freelancers end up disappointed with little to show for a lot of work. Although frustration may tempt some to give up, they should instead look out for the following 5 ways that freelancers bleed money. Just a few adjustments can result in a much better bottom line.
The Coffee Tax
Many freelancers have trouble working from home all the time. So its natural to head to the local coffee shop where the Wi-Fi is free, but the coffee isn’t. Being out of the house is nice and seeing other people stimulates the mind almost as much as the coffee, but after a few drinks, a sizable portion of your income for the day has already been spent.
Try going places like the library or the airport where you can enjoy a change of pace without feeling the pressure to spend money.
Software Purchases
Freelancers take a big hit when they buy expensive software. Packages like Microsoft Office and Adobe Creative Suite are just two that seem essential, but cost a lot of money. Most of the time, software purchases are avoidable through the use of open-source or free alternatives.
Instead of Microsoft Office, freelancers can use Google Docs without losing compatibility. Word processing, spreadsheets presentations, email and calendars all come free with Google without losing Microsoft compatibility. Similarly, freelancers can use Inkscape rather than Adobe Illustrator, Instead of Adobe Creative Suite and GIMP instead of Photoshop.
Alternative applications have similar capabilities as their counterparts, yet come without their hefty price tags.
Poor Recordkeeping
Poor record keeping bleeds freelancers dry because they don’t have documentation for their expenses when tax time comes around. Unfortunately, the day before taxes are due is too late to start.
Throughout the year, freelancers should put in a little extra effort to keep receipts and document the facts surrounding them. Expenses add up quickly and so does the tax deduction at the end of the year.
Too Much Outsourcing
While completing a job, freelancers understandably must sometimes pay a third party for their expertise, but sometimes they cave into the temptation to outsource work just to make it easier. Whether writing content, producing designs or writing a software program, freelancers should do as much of the work themselves as possible to keep as much of their income from every job for themselves.
Keeping Poor Quality Clients
Freelancers often struggle to find work, so when they have clients that become drags on their time and mental health. Clients who change their requirements in mid-stream, demand too many revisions and expect additional services consume valuable time that freelancers can use to do other work.
Freelancers should keep a record of total time spent servicing a client and review if often. Those who seem to be more trouble than they are worth usually are not worth keeping. To protect their bottom line, freelancers should quickly jettison problem clients to protect their own bottom line.
Avoiding the 5 ways that freelancers bleed money listed here will help build a more profitable and successful freelance business.
