Being self-employed as a solopreneur or freelancer can be a rewarding path to financial freedom and autonomy, but it doesn’t come without its pitfalls. That’s why it’s important to recognize the types of issues you may face when you’re working on projects for clients.
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Here are some scary situations solopreneurs face – and how to avoid them:
1. Lack Of Efficient Funds
As a solopreneur, you’re the boss. So, it’s important to be financially savvy. Start by taking steps to ensure you have efficient funding to keep your business operational. Watch what you are spending your money on, including the money you invest in projects and tools. Have a savings plan from the start and put away a set amount for an emergency fund and for investing back into your business.
Reconsider investing money in projects or platforms that do not add value or enhance your business, such as freelancer platforms that charge large fees but don’t help you obtain enough work to stay operational. Go over your daily and monthly expenses and verify what is taking away from your business.
2. Lack Of Payment
According to the 2017 PayPal U.S. Freelancer Insights Report, at least half of the 1,000 freelancers surveyed indicated experiencing payment issues. Survey respondents cited several reasons, including lost payments, the inability to use established payment methods, payment disputes and late payment arrivals. When your client makes late payments or misses payments entirely, it can ruin you financially.
Avoid this situation by requiring a deposit or full payment upfront. For all of my company’s large app development projects that take up considerable time, we take a deposit that amounts to half of the project’s costs by the end of the discovery phase.
This helps balance the risk of nonpayment between you and your client. When your client invests money in your project and you invest time getting started, both of you will be more invested in seeing the project completed. Be upfront about your payment expectations by having policies clearly outlined in your contract.
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3. Unqualified Prospects
Clients who seem to have good intentions by asking you to provide proposals or lower rates up front may just be shopping around. Without qualifying your clients, you could end up working on several time-consuming projects that burn you out and barely help you pay the bills.
Instead of competing on price, set correct expectations for your clients. Explain and sell the value of your service. Remember that not every client is for you and you are not for every client. Qualify your prospective clients before you both invest time into the project.
4. Lawsuits
One of the most important steps you can take to avoid lawsuits is to have a contract that clearly spells out expectations, project details and the procedure for handling revisions, editing and rights of the content or products you products.
If you do find yourself facing a lawsuit, instead of reacting, take the time to think it over. Always consult with your attorney before making any decisions. The process can be long and drawn out, but some disagreements can be settled out of court.
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Finally, buy liability and errors and omissions insurance to protect you from potential lawsuits in the future.
5. Micromanagement
Clients who micromanage your project can stifle production in the long run. Set rules up front to avoid clients who overwhelm you by attempting to manage every aspect of your project.
For example, review the client’s requirements and communicate with them about any unclear language, such as deadlines or images that require more time for research. Have defined status updates and deliverable dates to keep your client worry free.
6. Not Enough Work
When you lack sufficient workload, you can go out of business fast. That’s why it’s important to market yourself and solicit prospects.
Do this by pitching projects and proposals, cold emailing prospects and leveraging search engine optimization and social media advertisements. Have a website so clients can find your work and samples. Nurture client relationships and follow up. Listen to their needs so that you’re offering them the best products or services.
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7. Inconsiderate Clients
It’s important to communicate with your clients regularly to ensure your project is running smoothly. But you may run into some clients who believe they can contact you at any waking hour of the day.
To avoid this issue, establish office hours and communication policies. You may need to explain the best ways to communicate with your client. Consider implementing chatbot technology that answers basic questions when you are not available. Just make sure that your clients are aware of who is actually answering their inquiries outside of your office hours.
Running your own business can be both rewarding and profitable – when done right. Keep an eye out for these common pitfalls and take steps to ensure you have enough work and the right clients to stay operational.Rahul Varshneya is the co-founder of ResumeSeed, a platform to download premium resume templates.