Whether you call yourself a freelancer, small business owner, or entrepreneur, you probably feel like you never quite know what you’re doing. People say this “imposter syndrome” eventually goes away, but I’m not sure (yet). The truth is that you know more than you think you do.
When you can consider it all one big experiment, the pressure to “get it right” fades away. And if you’re willing to learn from your mistakes by seeing them as opportunities to get better, rather than as ruinous setbacks, you’ll be light years ahead of most. Simply make adjustments and carry on.
With that in mind, here are six mistakes I’ve made in my own business and the lessons I learned from them.
1. Charging Too Little
Aside from deciding whether you should charge hourly or by the project, establishing any type of rate is one of the most challenging things you have to do as the owner of a business.
People used to tell me, “the market will tell you what it should be.” Which is great, but ain’t nobody got time for that when they’re trying to pay last month’s bills. I put a lot of pressure on myself by thinking I needed to get it right the first time out.
I started out by charging $35 per hour, which felt like a lot more than the estimated $25 per hour I earned as a teacher! It didn’t take me long to realize it was too low. After taxes and expenses, I was left with very little.
So I experimented. For the first few months, I made a deal with myself to raise my rate by $10 per hour with every new client. I wasn’t trying to rip anyone off. I was simply testing the market. Of course, you have to provide quality work to back it up.
If you really want to take things to the next level, stop trading dollars for hours and work by the project. This is where you make the real money. The challenge is to figure out what kind of value you provide to your clients/customers and clearly communicate how you deliver it.
Lesson: We all undervalue ourselves when we start out. Save yourself some time and set your rate at a level that makes you slightly uncomfortable. That feeling means you’re getting close.
2. Working in Isolation
I thought working from home was going to be awesome. It was. For about a month. Then it got lonely.
Most freelancers work in some sort of creative capacity. And yet one of the ironies of working for yourself is that you’re isolated from the creative energy of other people.
I’ve written before about how much I love working at a co-working space. I can come and go as I please. I can sit by myself or with others. And I get to network. (Sometimes, simply being around people gets you work).
Sitting by yourself at your home office does none of these things.
Lesson: Whether you make a plan to get out and work in a coffee shop once a week, or you join a co-working space, you need to be around other people. Go to networking events. Set up lunch with friends. Do something to get out of your house or home office to let those creative juices flow!
3. Comparing Yourself to Others
Ah yes, the constant fear that someone is doing it better than you. Who doesn't have this from time to time? It’s an easy trap to fall into. It’s hard not to compare your success with other people, especially when everyone is on the internet presenting the best version of themselves all the time.
The most helpful thing I heard regarding this feeling is, “Never compare your beginning to someone else’s middle.” This will always be true. Someone out there will always have better clients, more experience, or a bigger...car. Let’s just say car.
Comparison is a dirty disease to be avoided at all costs - especially in business. It causes you to doubt your work, your value, and your strategy.
Of course, learning from what others are doing is always a good thing, but it’s important to avoid getting caught up in judgments.
Lesson: Stop looking at what others are doing and start working. Put your head down and keep grinding. In the end, that’s what matters most anyway.
4. Focusing on Things that Don’t Matter
Unless your business depends on the number of political statements or memes you share, get off Facebook. (If this job DOES exist, I want it).
In the same way that comparing your business to others’ is a waste of time, so are almost all the other things you’re probably doing.
It’s easy to become distracted by the large numbers of things that seem really important but aren’t. ANOTHER website redesign? Not important. Updated your social media pictures? Not important.
If you’re doing things that are directly tied to making money, you’re not working. You’re Doug.
Lesson: It’s too easy to feel like you’re working because you’re “busy.” Constantly ask yourself, “Is this the most important thing I can be doing right now?” If it’s not moving you toward some bigger business goal (ahem...making money...ahem) stop doing it!
5. Putting All of Your Eggs in One Basket
You work on some projects, get paid, then realize you haven’t been drumming up work because you were so busy working. It’s always a challenge to avoid the feast and famine cycle.
But every now and then, you get hooked up with clients who want to develop long-term relationships - the holy grail of contract work. A situation like this is great for a variety of reasons, but none more so than stability and consistency.
But you can also be lulled into a false sense of security. Have you considered what happens if that consistency goes away?
As much as you might think the working relationship is solid, you should always consider the fact that you’re a contractor. You’re always vulnerable. When one client is responsible for 50% or more of your income, you’ve got to diversify.
Lesson: Remember to generate leads on a weekly basis, no matter how busy you are. You’ve got to keep the pipeline full, because if your business relies on one client, there’s a good chance you’re going to be scrambling at some point. And desperation is never sexy.
6. Having Unclear (or No) Processes
Your business is only as good as the processes and systems you put in place. (In case you’re wondering what the difference is, processes build larger systems).
It’s hard to think through every possible scenario when you’re starting out, but it won’t take long before you start to see what works and what doesn’t.
Write these down. Without them, you’re setting yourself up for failure. Do it for the same reason Steve Jobs wore a black turtleneck every day. The less you have to think about small decisions, the more energy you have for things that matter.
Here are a few things to think about: How do you get new clients? What’s your process for generating leads? How are you tracking responses, contracts, and follow-ups? How do you onboard new clients? What’s your system for tracking income and expenses each month? How will you measure growth? How will you respond to new inquiries?
Lesson: Flying by the seat of your pants, might work for awhile, but eventually, chaos will ensue and you’ll miss important work. You must identify and write out the processes that make your business run smoothly. These processes will define your larger systems.
Leave a comment below to share some of the mistakes you’ve made in your business. What did you learn from them?