7 Mistakes To Avoid When You're Self-Employed
Making the leap from standard employee to self-employed can be exhilarating, but it comes with an entirely new set of challenges. Here are some of the most common mistakes to avoid, from founders who've been there.
Whether you're starting a business, doing freelance work or launching a side-hustle after hours, the lessons you learn when you're striking out on your own and running the show for yourself are going to come in hard and fast. Chief among them? Failure is inevitable and very much part of what will give you the knowledge and savviness that is instrumental to success.
That being said, preparation is key in helping you minimize the fallout as you learn how to steer the ship on your own. Here's what you can take away from the most common missteps so you (hopefully) don't have to make them all yourself.
Get comfortable with learning new skills. Quick.
Congrats, you took the plunge! These uncharted waters are exciting, but they come with a lot of unknowns. When I left my 9-to-5 last year, I was a mid-level professional with nine years of experience. After going solo, it suddenly felt like I was back to my post-collegiate days and taking on many, many new roles and confronting a lot of unknowns.
At first, this made me feel inadequate, but I soon learned that wearing different hats is par for the course. Zoila Darton, co-founder of public relations and marketing agency Word Creative, explains that rather than being intimidated by all the new roles, prepare yourself as much as you can.
“Set yourself up for success with tools to grow your business from all angles. Learn basic graphic design and a bit about bookkeeping. Brush up on your grammar and copywriting skills. Until you really get off the ground, there likely won’t be money to hire help, so it’s nice to possess minimal skills to keep your ducks in a row.”
If you let the things you don’t know paralyze and scare you, it will be difficult to get through the many hurdles coming your way.
Know what's up when tax season rolls around
First, find an accountant and get money savvy. Since you most likely don’t have time to learn state and federal tax laws, find someone who is an expert to help guide you so there are no surprises come tax time.
Ariana Cabral, founder of La Catrina Style, has been there before: “Implement accounting and tracking procedures early, and make sure you keep up with them throughout the year. This will make your life easier come tax season and will be a little less overwhelming, since you probably don't have an HR department to fall back on.”
The last thing you want is a panic come tax season, or a big bill.
Don't fall into the "I can't take time off" trap
It's all too easy to fall into the mindset that because you're your own boss, everything always depends on you, thus you can never have time off. On the contrary, because being on your own can be so stressful and all-consuming, it’s especially important to give yourself mental breaks and set aside time for the other things in life that you love—even if it’s 10 minutes of meditation or a phone call with a friend.
Learn what times of days you are most productive and maximize what you accomplish during those times. Since working from home this past year, I have found that I need to schedule time to socialize, so I try to schedule a weekly lunch or coffee date. Failure to do so can be damaging to your business, and more importantly, to your mental health.
Don't undervalue your time and services
Especially when you're starting out, it can be tough to know what you should be charging for your time. But make sure that you are factoring in things that you might have to pay for on your own now, like taxes, insurance and any other costs associated with doing business like shipping.
Zoila also recommends educating yourself on the basic ins and outs of contracts and negotiating terms with clients and vendors. If you don't have the resources to hire legal counsel, "have an experienced business owner give you a crash course on contractual agreements,” she says.
Take care of your relationships
Yes, the old adage “It’s not what you know, but who you know” can be frustrating to those us of us who feel we are not masters of networking or didn't waltz into the situation with a bunch of lofty connections, but don’t underestimate your network or fail to continue developing and expanding your circle.
Expanding your social capital will make a tremendous difference in everything you do. If the prospect of attending the next happy hour seems daunting, keep in mind that you can also invite people to coffee or connect with them via social media.
Loriann Serna, founder and owner of event planning and management company Wife of the Party, has built a career out of making people feel special. “The way you make people feel personally translates into how you make them feel professionally,” she says, adding that making time to meet people in person, and writing (and sending) thank-you cards are personal touches that go a long way.
Know when to ask for help
Going solo can be lonely—especially when the going gets tough. Don’t be afraid to be open about what you're struggling with. Loriann recommends reaching out to people you respect and admire and asking them about how they accomplished their successes.
You will need mentors, colleagues and cheerleaders in this journey, and going solo means that they won’t really be in the lunchroom waiting for you. You need to go out and find them. This also means knowing when it’s time bring in people to help you, and when that time comes, it's imperative to make sure you're working with the right people.
In a small setting, this can oftentimes mean tapping friends. But that, of course, comes with its own perils. ”If working with friends, make your expectations very clear," says Zoila. "It’s easy to be casual with your buddies, but this can easily land you in strange waters."
Allocate your time with *extreme care*
You need time to work in the business and then time to work on the business. For example, if you are selling products, you need time create them, ship them, and then promote them on Instagram, etc. Plus, you need to allocate time to pay your vendors, pay yourself. You need time to be your own accounting, and HR department, too. You get the idea.
“Implement structure and discipline into your daily and weekly schedule," Cabral recommends. "Time management is key. It's so easy to get distracted and sidetracked when you no longer have a supervisor, you're working from home, and you don't have set work hours.” Try something like the good ol' Pomodoro Method to stay focused throughout the day.
But here's the biggest thing to remember: These are common mistakes, and you're going inevitably make some of them. Don’t let the fear of making a mistake prevent you from going into business on your own if that's what you want to do. As Cabral puts it: “Own the new stage of your life you are entering as a business owner, and just know that it's better to have taken a risk and tried, than to never have tried at all.”
Betsy Aimee is a career coach and founder of the creative studio Born In June.
Words: Betsy Aimee