Running a business is rewarding. It can also be challenging when you make mistakes or issues arise, and you feel as though you've hit a brick wall.
Being a sole trader is undoubtedly tough at times. If you're new to freelancing, you'll find that the first two years will be the biggest learning experience of your life.
But fear not! I've pulled together the usual pitfalls you might face along the way and have offered the following words of wisdom to help you tackle them.
Day and hourly rates
Before you do anything else, consider your day and hourly rates. What are others charging in your field? What's your competition offering? Do some research to find out what your rates should be.
Remember, large agencies will charge anything between £600-£1,200 per day. They're justified in doing so because of their wealth of staff and higher overheads. You, on the other hand, are a smaller business and should price yourself accordingly.
When a potential new client approaches you, listen carefully to their needs and take lots of notes. Do not be pressured into providing a quote on the spot. Explain that you'd like to go away and have a think before offering any costs for your services. It gives you time to properly consider how many hours or days you think the project will take.
When costing up jobs, get your quote right! Add as much detail as possible, explaining exactly what your potential client will get for their money. Add disclaimers and be clear on what your quote involves. Don't worry about adding too much detail. It'll avoid any future misunderstandings with the client.
It's then best to save your quotes on file so that you can refer back to them. When you're pleased with your final cost, email a formal document to the client. For obvious reasons, we'd recommend creating PDFs for all your quotes. Or why not use something like FreeAgent, which generates nicely designed estimates that you can then convert into invoices if the project goes ahead.
Quote high, not low
When you've quoted for a project or job, eight times out of 10, the client will try to mark you down on price. That's why it's always good to price yourself a little higher. Remember, once you've quoted you can't go back. A client can always haggle and lower your price – it doesn't work the other way round.
So make sure you start high and never too low. If you think your price is exactly right, then explain to the client that you are unable to charge anything less. Stick to your guns and have faith that those who trust in your skills will hire you for the job.
I heard a great piece of advice recently from an agency owner – work out how long something will take, double it and then quote. The client is likely to reduce your fee but never by half.
Consider the client
When quoting for any job, think about the client. Are they going to be easy to work with? Do you have a good feeling about them? Do they trust in your skills? Or do you think they might be hard work? A significant cause of stress? And perhaps the kind of client who will battle you at every opportunity? If you feel a client might place a higher than average demand on your time, increase your day rate. That way, your budget is covered, and it makes the job worthwhile.
Run for the hills when a potential client starts saying things like "I haven't got much budget for this" or telling you some sob story. Read the warning signs if they're claiming their business is 'suffering' and 'could go under' at any minute. Just go with your gut feeling. If you smell trouble, it's best to walk away.
How to walk away with grace
If you don't want to work for someone, you don't have to. Don't feel guilty if it just doesn't feel right. There are many ways in which you can walk away from a potential client with grace. Explain that you're working to full capacity and it isn't a project you're able to assist with at this stage. Merely say: "We're not taking on any new business at the moment". The client will go elsewhere, and your reputation will remain intact.
Desperation is obvious
If you're desperate for work, it'll be apparent whenever you meet potential clients. They can smell it from 100 miles away, and many will try to take advantage of you. Be confident and self-assured that your skills are worthy of your day rate. Stick to your guns and only be flexible on your price when necessary.
Don't be naive
During your time as a business owner, you will undoubtedly come across some nasty individuals. Therefore, trust no one and keep your cards close to your chest. People are always going to copy, steal, gossip or – in some cases – try to damage your reputation deliberately. These underhanded tactics will be evident to those who matter, so don't worry about the strange people out there who feel the need to lower themselves to this level. They merely aren't as good as you, and their negativity always trips them up in the end. Concentrate on running your business and doing an excellent job for your clients. It's what truly counts.
You might think the business world is vast and immense. It isn't. We all come across each other at some point, so never bitch or gossip about anyone. If someone tries to start involving you in a bitchy conversation, don't participate. For example, they might say "I don't think much of that marketing company do you?". Reply with something like: "Oh, really? I saw their recent work and thought they were brilliant!". Overall, try to change the subject and talk about something else. Remember, negative words will always come back to haunt you. Equally, positive words will bring good karma. You never know where your positivity will spread.
Dealing with difficulties
If an issue arises with a client, it's often best to pick up the phone. Sending emails can be a bit of a cop-out, plus they're forms of communication that are permanent and impossible to take back. Emails can also be challenging to get across the right tone and can seem impersonal or even create the wrong impression. That's why meeting someone face-to-face or speaking to them on the phone is better. You can undoubtedly lead the conversation in the right direction and deal with the issue more tactfully.
Invoicing and payments
Don't forget to send out your invoices on time every month. Then allow 30 days before you start chasing for payment. I think it's rude to harass any client for money before this 30 day period ends. However, once 30 days have passed, you're in your rights to chase. Make sure you keep on top of all your invoicing and retain records for your files. If a client still hasn't paid, post a statement to remind them of the outstanding balance. Only consider further action if it has been three months since you invoiced the client.
You're always on show
You represent your own business, so think about how you present yourself – in person, through emails and via any form of communication. Be friendly, personable and open. More importantly, be a chameleon and adapt your personality to suit the business, contact or client that you're dealing with. However, always remain professional and never bring your personal life into the relationship.
Your client is important
Nurture your clients and keep the communication channels open. Pick up the phone, arrange meetings and be pro-active. Show them you care. If you get that niggling feeling that you haven't touched base with a client for some time, it's probably your instincts telling you to take action.
Make every client feel like they're the most important person in the world. Remember, people aren't interested in you. People generally love the opportunity to talk about themselves. So ask questions and allow clients to talk as much as they like.
Ignore the competition
Your major competitor has just launched a new website, and it looks incredible. Another has recently won a wealth of new clients. So what! Who cares? Don't stress about the competition! There is plenty of work to go around. Just concentrate your time and effort on growing your own business. Your efforts will pay off. Trust me!
Negative remarks or tweets
Now and again, you'll have someone attack you online. That's whether you're on Twitter, Facebook or you have your blog. Accept that not everyone will like you or what you're doing. In most cases, these people will be your competition and might be jealous of what you're up to. Take this as a fantastic sign! It means you're doing well and seen as a potential 'threat'. When dealing with negative remarks online, only respond where necessary and don't get involved in any pointless arguments. Sometimes, it's best to leave the immature people to their own devices.
The most important thing of all – keep a balanced life. Don't let work overtake everything. It's imperative to enjoy downtime and relax. Try to get into a routine, working to regular office hours if you can. Work should be off-limits during evenings and weekends. Your mind and body need time to unwind. Otherwise, you'll only make yourself ill – and where's the fun in that?
Above all, running a business is one of the best things you can ever do. There is nothing better than being your boss and being in control of your destiny. It's certainly not easy, and there will be times when you want to crawl under your desk and hide from the world. On those days remember that the world is generally a lovely place and for every issue or problem you come across, you should pat yourself on the back for overcoming these difficult challenges.
Remember, no one's perfect, and it's reasonable to make mistakes. It is, of course, how we learn and how we progress. But hopefully, our top tips will help you avoid some of the most common pitfalls of running your own business.