The Top 5 Mistakes Freelance Consultants Make
Every business wants to make money, but it’s very easy to fall into bad habits that cause you to end up spending more of your time and resources than you have to for any number of reasons. However, it is entirely possible to stop doing these things and instead focus on work that will help increase your bottom line.
Many of these mistakes are not only common, they are to an extent understandable. That being said, they also represent a fundamental misunderstanding of how to do business and play on a number of human traits and faults that need to be overcome in order to get the most out of your work.
Here are just the top five things that are done by freelance consultants which can seriously hurt their business.
1. Not Tracking All Client Time – The first mistake that people often make is that they don’t actually track all of the client-facing time that they have. This should include both billable and non-billable time, and here’s why: the time that you spend with your clients is always valuable to them.
You wouldn’t be with your clients if it didn’t benefit them somehow, so you need to understand how much value you are providing in order to be able to determine if you’re charging an appropriate amount. Whether you have done a bid or you charge by the hour, it’s important to be able to alter how you do business in order to get the most out of your work.
You can find a pretty cool list of online time tracking apps for freelancers here.
2. Not Telling Your Client When You Do Out of Scope or Extra Work – Human beings are naturally inclined toward trying to please other people. As a result, we’ll often take on small projects or agree to do little things for free because we were asked or just want to make our clients happy, even if they aren’t technically a part of our jobs. We justify these actions by saying that we’re building our reputation or engaging in good customer service, but that doesn’t work if we don’t let them know that we’re doing it.
It’s ok to do work that is out of scope or free, but tell your clients so that they know that they’re getting a deal.
3. Cutting Prices During Sales – There is often the temptation to cut the price of your service in order to try and lure new business, especially early in building your company. Often the assumption is that you will get a steady stream of income or possibly make connections that could benefit you later.
The problem with this line of thinking is that is not only rarely pans out, it also sets a poor precedent. Any referral you get from the people you cut your prices for will come with the assurance that you can be talked down, and in most cases you won’t get new business. Instead make sure you charge a consistent price that is reflective of the work you do.
4. Underestimating Projects – Whether it’s because you genuinely think that it can be done for very little or you’re afraid of losing business, it’s never a good idea to underestimate how much a project will cost or how long it will take. This not only causes problems by making you look unprofessional, it also cuts directly into your bottom line by putting you on the hook for overages.
The easiest way to avoid this early in your business is to ask other people to double check your figures, especially the people doing the work. Also, keep a list of common estimates for regular jobs so that you know what to expect. For example, if you’re an SEO consultant, it might be helpful enlisting the help of an SEO reseller that can help you fulfill your client work.
5. Skipping Postmortems – What’s the difference between an experienced team and an ad hoc group of freelancers? A team has learned how to work together and developed a common playbook for handling their job. The way that playbook is built is through postmortems.
After every project it is important to talk about what worked, what didn’t work, and how to improve. This is how a team shares knowledge and learns to better execute the job they’re hired to do. Skipping this is abandoning your best shot to learn as a group.