The 5 biggest pitfalls for freelancers

Currently, the Netherlands has over 1.2 million freelancers. This diverse group cannot be lumped together. Yet there are 5 pitfalls that almost every freelancer person falls into. Are you guilty of these too, or are you the exception who has everything in order? Read it in this article.

1. Asking too little money for your work

Especially the starting freelancers regularly fall into this trap. You may not be sure of your business yet and you may not have a good idea of what your expertise is worth. A shame! Because this way you are losing money. To make sure you are charging the right fee and not losing money, you can make an annual financial plan with expected income and expenses.

An annual plan provides insight into the finances you need. That way you know exactly how many hours you need to work per month to earn the amount you want. Will you choose to increase your rate or work more hours? With that in mind, you can differentiate between your clients or customers. Focus on the value you provide with your work.

2. Not building a financial buffer

Do you have your finances mapped out? Then make sure you also separate your business income from your personal account. Close a business account (and savings account) so that you keep a good overview of your income and expenses. Also take into account (later) expenses such as VAT returns and income tax. Be on time with this, because late payment results in fines and that is of course a shame!

Make sure there is always enough money in your business account for these payments and any other unforeseen expenses. You can do this by, for example, always reserving 30% of an invoice for this purpose. You can then put this back into the business savings account. In addition, as a freelancer, you may unfortunately also have to deal with illness or defaulters. Even then you will have to be able to bridge the time yourself. A buffer helps to avoid getting into trouble.

3. Not doing enough acquisition

Unless you work in sales yourself, chances are that acquisition is not your favorite task. Many freelancers struggle to find new clients and see acquisition as a tough task. Therefore, it often fades into the background, especially when you are busy. Logical, but not convenient. If an important client drops out, you often have an immediate problem. After all, without work, no income!

You can overcome this by building and maintaining a network. If your current assignment ends, this will help you to quickly find another job. Other ways of acquisition include: being active on social media, creating a user-friendly and clear website, or visiting trade fairs, events or network meetings in your industry.

4. Losing focus

As a freelancer, a lot can come your way. A big risk is that you forget the purpose of your business and get bogged down in side issues. For example, as a starter you might turn down assignments that don't actually suit you well, spend too much time on certain assignments because you want to prove yourself too much, or perform tasks yourself that you are not good at. You can want to do everything, but often that actually results in less.

That's why it's important to keep your focus. Set goals for yourself where you want to grow and what you want to achieve with your business. Then stick to them by asking yourself with every step you take: does this contribute to my goal? For example, you may find that you want to outsource certain things such as accounting or acquisition. You can't be specialized in everything. It may actually be more beneficial to outsource these things and focus on your core business.

5. Not covering important risks

As a freelancer, you are responsible for your own work and you therefore also run all the risks. You cannot always estimate in advance which situations you will end up in. Making mistakes is human and you too can fall ill. That is why it is important to think carefully about your insurance.

Consider disability insurance and don't forget liability insurance or legal aid. Business accidents or legal aid is really different from what you are insured for privately. Keep this in mind. Also, as a freelancer, you are responsible for your own pension accrual. You can use a group pension plan for that, for example.

Getting started

Now that you know what pitfalls there are, it is important to get started. Could you use some help checking your hourly rate or taking out insurance? Or are you looking for a new assignment? We would be happy to give you advice! Register for free on our platform and check out the possibilities.