I have a background in website development and graphic design that goes back some 20+ years, and was employed at a 9-to-5 corporate job for most of those years. Those years brought me so many lessons, helped me acquire a diverse set of skills, and I was privileged to meet a multitude of kind, wonderful people.
However, after being laid off due to downsizing (along with about 300 of my coworkers), instead of jumping back into the corporate world of web development I decided to start out on my own as a freelance web designer/developer. I can’t honestly say being any kind of a business owner is easy – not by a long shot – but I can say that I would not trade the experience of running my own business for anything. Once you are your OWN boss, it’s real tough to go back to working for someone else, I’m telling you.
If you are considering starting your own small business and/or trying your hand at being a freelancer, there are many books on those subjects that could help you on your journey. Read our take on some of the Best Books on Blogging, Freelancing and Small Business to find out more.
If you have decided to venture into the world of online entrepreneurship by starting your own blog, check out this article on How to Start a Blog the Easy Way.
That being said – here are a few of the challenges and surprises that I encountered in my first few years of self-employment:
1) You can’t always count on family members to be supportive of your business venture.
I’m listing this item first because this was the biggest surprise that I’ve experienced so far since I started my business. In the months leading up to actually taking the leap into entrepreneurship I had visions dancing in my mind of various family members. I pictured how they would react when my husband and I told them the news about our new business, and envisioned the looks of respect and admiration on their faces. And the high fives …
Not to mention the fact that I envisioned (and hoped for) future projects, referrals and clients to come filtering into our business via the support from both sides of the family. This never materialized.
But in retrospect, now I realize that having family members as clients would not be a good idea, for several reasons. One reason being – I would feel a bit icky asking them to pay me. Now I see this as a blessing in disguise, but for a long time I couldn’t help feel very disappointed.
So …
The reality of this situation turned out to be quite different than I expected. Actually, the way my sister and three brothers reacted was actually pretty cool and encouraging. They were sufficiently positive about the news, while also asking lots of practical questions like “how are you going to have money to live on at first?” Fair enough – but at least my siblings were (and still are) supportive. However, my husband’s side of the family was a different story. Their reactions ran the gamut from calm ambivalence, with phrases such as “Oh that’s nice..” to what appeared to be full-on annoyance that we even brought up the subject.
My point: it’s great if your extended family is on your side as you start your new business, but if they’re not – that doesn’t necessarily mean that you starting a business is a bad idea. It’s your life, not theirs, so trust your gut.
Trust yourself and you will know how to live.
And besides – just because your family isn’t doing cartwheels because you’re newly self-employed – it doesn’t mean they aren’t happy for you or that they don’t support you. People are busy with their own lives, jobs, kids, and everything else they have to deal with. I finally learned to try taking people’s reactions with a grain of salt and avoid getting too worked up either way.
2) Working from home for extended periods of time can be very lonely and unhealthy.
This might be the toughest aspect about being an at-home freelancer (for me anyway). Working for many years (18) in a major corporation, with coworkers all over the place and regular interaction with people I had known close to 2 decades – I had grown accustomed to sense of belonging to a community. It was very painful when that was taken away from me, to be suddenly left without the structure and social support of that community. I still haven’t gotten used to the crushing loneliness that sometimes envelopes me here, working from my home.
Don’t get me wrong – getting to work from your home or from anywhere you choose is a massive perk of owning your own business (if your work is primarily online, that is). But you do need to be careful not to fall into the trap of getting too comfortable with being at home.
I didn’t realize that I had fallen into this trap until about 6 months in, when I started to go a little stir crazy from barely ever stepping outside of my house. Then the loneliness started creeping in. Until one day I promised myself that I would step out at least once per day, even if it was just to pop over to my local Post Office to get the mail.
It took surprisingly little social interaction to make a big difference in my state of mind, and slowly I began actively looking for ways to get out of the house for longer periods of time.
Besides stopping by your local Post Office or pizza restaurant, other excellent ways of stemming your sense of isolation include:
- Joining a local Chamber of Commerce (and actually attending some events)
- Attending social and/or business-related Meetup groups
- Enrolling in an exercise class or other type of adult-enrichment course
- Meeting with clients locally in a local coffee shop or other location
- Becoming active in a school group or association (the PTA for example)
- Joining a Leads group
- Attending industry conferences
This will be an ever-evolving process for most people, to keep pushing themselves to step out of their comfort zone and connect with others. But the effort is well worth it!
3) You can linger too long in the reading, preparing and researching phase of building your business.
If I had to do it all over again, I would spend more time actively doing things to build my business and spend a lot less time reading about how to build my business. It’s great that there are SO many resources available nowadays to help the freelancer or other type of entrepreneur. It’s even better that many of these resources are free: blogs, online courses, Facebook groups, eBooks, email newsletters, and so on.
It is a good idea to read as much as you can about business in the beginning and to train as much as you can, so that your skills are up to date. Reading, learning, training and growing should be a lifelong process. You can NOT allow your skills to stagnate, and as a business owner you need to be a jack-of-all-trades to a certain degree. However, it is quite easy to get too bogged down in a never-ending learning process that you forget to take action.
Some may use this as an excuse to procrastinate in taking concrete action steps to growing their business, out of fear (this is me raising my hand!) Do not let fear hold you back!! Instead force yourself into action by blocking out a specific time on your calendar (for every workday) that is specifically set aside for business-building. 
Set yourself a calendar reminder to do those activities first, as a priority, before you tackle any other business activities. In my opinion, business-building activities are the most important work-related activities you can be doing. It’s best to do the more important tasks first and get them out of the way.
Then put yourself out there: network, connect with people, advertise, and try out at least a few of the online freelancing platforms that are available. I have tried several of them, including the LinkedIn ProFinder freelancing platform.
4) You can’t – and shouldn’t – be expected to go it alone or to figure out everything yourself.
If I knew a few years ago what I know today, boy oh boy would I start seeking out the help of others much sooner. As an introvert by nature, I have a hard time asking for help or even admitting to myself at times that I need other people. I’ve always had this “I’ll mull it over until I figure it out myself” type of mentality. But with the suggestion of my husband that we could use a mentor, I stopped by a few of our local Chamber of Commerce offices and signed up, and we were matched with a business mentor (in the same general line of work as us).
I also submitted the online application to SCORE and we were assigned a business mentor from them as well. At SCORE they have so many excellent resources for supporting small businesses, and their mentors are experts who volunteer their time.
This was one of the best business decisions I could ever had made. The Chamber of Commerce came with it so many opportunities for networking, business advice, coaching and so much more. The Chamber regularly holds events such as “Business at Breakfast” and “Business After Hours” where new members can network with long-standing ones.
Also through the Chamber, our business has been featured in ads and newsletters and on the Chamber websites. We’ve joined a Small Business Council too and have met so many folks who are very generous with their business advice and their time. Plus, the feeling of connection with my community is a great feeling and a side benefit. So give your local Chamber a try!
Another important group of people to connect with is other freelancers or others who are in the same boat as you in terms of type of business, size of business, etc. Try to connect with like-minded peers. Once I stopped viewing other web designers or developers as competition and started viewing them as partners and collaborators, it started to open some doors for me professionally as well as personally. And now some of the business filtering into Code Dragon comes from other web designers (ex: overflow work they don’t have time for or coding projects that are too complex for them).
Besides – as you go along in your business you will probably run into some tasks that you aren’t good at, don’t have time for or don’t like doing. In that case, you can always reach out to others to handle those tasks for you. Delegate certain tasks or jobs to freelancers, or perhaps even hire someone on a regular basis. You don’t have to go it alone.
5) Learning how to price your services is going to be harder than you expect.
Figuring this part out is way more of an art than a science (and I’m still trying to get it right after a few years). Assigning prices to tangible, physical products is one thing, but assigning prices to something as intangible as a service is another thing entirely. There is no hard-and-fast rule, and nearly every person in my field that I’ve talked to about this subject prices their services differently.
Here are a few of my observations and suggestions, based upon my own experience with setting prices:
As a starting point always at least try to get your client to divulge what their budget is for your particular task or set of services. Asking this question has helped me a LOT on past projects, and you might be surprised at how often clients actually give you answer! (Unfortunately I have also asked this question and received no answer or the client just kinda grunted at me… it’s hit or miss, but you can at least try asking). But seriously – it’s nearly impossible to draft up an effective, remotely accurate proposal if you have no clue how much money your prospective client has to work with.
Work for free at first, if you have little or no experience working with actual clients. This is a great way to get started in your field, make some connections, and begin building up your portfolio. I say with a caveat, however: only work for free at first if you absolutely have to. This type of scenario (if left unchecked) can potentially become a real time and money-sucker for your business. For example, if you build a website for free for your local animal shelter, and it turns out great and you add it to your portfolio. (woo hoo!) But then the folks from the animal shelter keep coming to you months (or years) later requesting changes to their website. It is wonderful to support your local charities in this way – don’t get me wrong – just be aware of the commitment you might be getting yourself into.
Pricing by the hour: Right now I’m going in the direction of really wanting to work and charge by the hour. Recently I ran into a situation where I accepted a project/gig for a lump sum payment, and really regretted it later. What started out as a project to build a simple website slowly began ballooning into what felt like a full-time job.
The client changed her mind so many times in terms of page content, colors, fonts etc. that my head was spinning! The project scope just kept creeping and creeping and in this case I truly had no recourse but to suck it up and take the loss. My client made it clear from the beginning that her budget was very small, and so I had compromised a bit on my normal price and accepted the job. And I didn’t have the heart to add much to the price in case of scope-creep.
Never
again.
I am not exaggerating when I say that particular project nearly drove me out of business.
However, for people who offer services, sometimes it doesn’t make sense to work based upon an hourly time clock. If you work on the slower end of things and like to mull over different ideas, colors, etc. (like I do), then charging by the hour could wind up essentially punishing your clients. A few of the websites my husband and I created for clients were very large – 50, 60 or even 70+ page websites, with advanced functionality. If we had charged those clients by the hour we would have sent them a bill for something like $15,000! We’ve had projects that spanned across 6 months or longer.
Hourly billing is great for more self-contained projects that have a fairly quick turnaround time (like creating a small 5 page website). Having to pay a designer or developer for all the hours they work will help keep the client and their requested changes in check. It also works well for a situation where a freelancer is providing ongoing weekly or monthly website maintenance services.
As an aside —
Another issue here is – If you charge by the hour and are a really FAST worker you are essentially punishing yourself for being quick, experienced and really good at what you do. So there really isn’t a one-size-fits-all in terms of pricing your services. You usually need to take it on a case-by-case basis.
In some cases though, it might be necessary to work by the hour. If that is the situation and you have NO idea what to charge, my suggestion would be to check out online freelancing platforms like Upwork, to see what others in your field have set their hourly rate at.
Pricing by the project: This method is often used in the Graphic Design and Web Design fields and is best reserved for smaller projects such as logo design, creating a small brochure… things like that. It’s usually easier for me to quote a lump-sum price for those types of projects because they are smaller, shorter in duration and more self-contained. I have a clear idea of how long it will take me and exactly what’s involved.
For larger projects that take months and have many “moving parts” – like the creation of a medium or large website – I am vowing to never again work on a fixed-price basis. If I can avoid it..
For projects that make sense to charge a fixed price for:
You can always offer different levels of services and provide different packages and offerings for your customers.
For example: a simple 3-page brochure is $300, a 4-10 page brochure in full color would be $900, and 30-page booklet would be $1,500, etc. [just throwing some sample prices out there]
For tangible items (like a brochure, poster, flyer, etc.) it’s fine to charge a project or “flat” rate, but of course that rate should scale up or down depending upon the level of complexity, how many hours you think it might take you, and so on.
Value-based pricing: This method is what all freelancers/small business owners like you and I should be aiming for. This is the brass ring.
This pricing method is something I’m just starting to attempt in my business. Value-based pricing is essentially you trying to discover how valuable your services will be for your client. How will the thing or service that you deliver to your customer – how will that impact their business in the long run? Instead of just focusing on (for example) the fact that you’re creating a website for them, try to picture how that site will benefit your client for years to come, and how they can leverage it in different ways to ramp up their profits or bring in more customers.
Also, part of value-based pricing sometimes involves charging certain clients more if their company has a large budget for your piece of the project (ex: a large company with a huge budget) but charging small ‘mom and pop’ clients a lot less. Just to throw out one example: I’m pretty sure McDonald’s didn’t pay $100 for their logo because:
1) they can afford a lot more and 2) their logo has had a huge impact on their bottom line.
At the other end of the scale: last year I created a logo for a brand-new company (single person, almost NO budget), and yes – I charged them only $100. I certainly don’t want to make a habit of that, but it was worth it to help someone just starting their own small business.
The bottom line with value-based pricing is: it’s all down to the perceived value of what you’re doing for your client. It’s all about how much your customer (or potential customer) values what you are selling. You need to use your intuition in this arena, big time.
I have learned so many important lessons since starting on my own journey of self-employment. Some lessons came hard, some came easier, and I’m still learning each and every day. It’s good to learn from others when you can but there is truly no substitute for just jumping in and trying new things for yourself. That is how the real learning takes place!
Please let me know in the comments – if you are self-employed, what important lessons have you learned so far?
