My First Year as a Freelancer: Lessons Learned

The first year of my freelance business is coming to it’s end and it is a perfect time for a look-back. 2017 has been a very powerful year regarding the lessons I learned. While looking back, I have gathered 12 advice for those brave ones who do their own one-man show.

Desk with Dog, 4032 x 2935 pixels, Digital, Early XXI Century

Making the Decision

I made the decision to start my own business as an HR Consultant and IT Recruiter at the end of 2016. I had been preparing for it for years, at least mentally. I felt it was time, but I didn’t have a business plan, or anything. I had my knowledge, my experience, a network and a TAX number. I had savings for only a few months, but I didn’t care. I knew that if I had joined a company as an employee again, I would have only postponed the decision. I just celebrated my 30th birthday and quit my job — the timing was perfect.

In January 2017 I did nothing, literally nothing. I needed to rest and clean up my mind. I started to work in February, but from signing a contract to actually being paid, 2–9 months can pass by in my business. When Spring came, my nights were not that calm, and my back pain renewed again. It was only in April, when I started to see the light again. So, here is my first advice:

№1 Only start a business when you have enough savings

You can save yourself a few anxious days. Money doesn’t make you happy, but not having money leads to anxiety. It is better for your health to have financial security, believe me. Also, if you run out of money, your dreams will never become a reality, you will find yourself as an employee again, and you don’t want that. Have savings, and plan ahead.

Planning the Business

I’ve already mentioned that I didn’t have a business plan when I made the decision, so I had to make one while I was already signing contracts, and doing my job. It is far from ideal.

№2 Have a business plan before starting your business

In January, I wasn’t prepared for making any steps. I needed to think. I knew I would need clients, a pricing strategy, contracts prepared, a license, bookkeeping, a website, a database, task management, and many-many more things. I needed systems and processes around me even if it was only me. I felt overwhelmed and lonely which I could have avoided if I had had a solid business plan. Whether it is long or short, elaborated or simple, it is useful to think about your future and answer some basic questions, such as:

What is your vision?
What are your values?
How will you manage finances?
What are the legal aspects of your activity?
Who is your market?
What is it that you sell?
How do you want to communicate and what?
How do you see yourself in 1–2–5–10 years?
Who can help you?

Marketing, sales, product/service development, business development, operations are the main areas you have to think about. It helps a lot if you write your thoughts on paper.

Overtaking loneliness

Of course, I was used to having a team around me, and a superior who made the decisions. The next thing I did was gathering a community of supporters around me: family members, friends, former colleagues in the same industry, entrepreneurs wearing the same shoes and other experts and professionals. I could discuss my ideas and worries with them and I finally didn’t feel so alone and lost.

№3 Gather a community around you for professional and moral support

You will eventually feel alone, so be prepared for that, especially when you are a more introverted person and your profession is not client-facing.

Setting Goals

By the end of April, I issued a few invoices of HR consulting that gave me peace and time to plan ahead. I warn you: until you squirm at the bottom of Maslow’s pyramid, you are not able to think clearly.

First things first, I acquired my license for recruitment in May that made me eligible for making placements, the core service of my business. It was time to set S.M.A.R.T. goals for myself. S.M.A.R.T. stands for Specific, Measurable, Attainable, Relevant and Time-based. Well, I’m a headhunter, so my relevant goal was to make n number of placements by the end of the year. The target number was an educated estimation based on my previous experience as a headhunter.

№4 Set yourself S.M.A.R.T. goals

Without goals and purpose, your days will become chaotic and uncontrolled. By setting goals, you can easily structure your days, prioritize your tasks, and celebrate when you reach them. It will be your main tool for self-motivation, too.

Money, the Bugaboo

Finances are a huge and essential part of any business whether you like it or not. Plan ahead and start writing all your planned and realized incomes, all your fixed and ad hoc costs, and continuously revise and optimize your numbers. A few questions to answer:

How much work can you do alone and what can be your maximum income?
How long does it take from a sales inquiry to actual invoicing?
What is your pricing strategy?
What are your business-related costs?
How much money do you spend for living?
How much money can you save?

Be honest and realistic about your finances and consult an expert if you need to. I know that finances are a bugaboo for many people.

№5 Set up a bookkeeping system and keep a record of your finances

Even if it is only an Excel or Google Spreadsheet, you will need one. Huge companies run on Excel sheets, so don’t over-complicate it, be simple, but precise and thorough.

Related to money, I learned one more thing pretty fast.

№6 Count on the money only that you already have in your bank account

One of my first clients was a startup company. Although they had nice prospects, they almost went bankrupt. I learned that an issued invoice means nothing and sometimes you can not do anything about it. You can count on the money only that you already have in your bank account. Keep that in mind and don’t buy a ticket to Thailand just because you signed a contract.

Every-day operation

To be able to do my job, I had to get many business-related things done, too. I needed systems and processes around me, and I was aware of the fact that I was not able to do everything alone. Every business is different, but I have three advice anyone can accept.

№7 Outsource everything you can

It’s not a shame not doing everything by yourself, indeed. I’m not an accountant, or a lawyer, translator, web developer, and I’ll never be. These were the first areas of my business where I outsourced tasks, like writing a contract and translating it, creating a website, reporting my taxes, etc. It saved me lots of time and more importantly: opportunity. Please, read Tim Ferriss’s The 4-Hour Work Week if you haven’t read it already. Here is a useful summary of the book on Youtube.

№8 Become agile

Having a goal for the year was great, but it seemed to me like a huge monster boss to defeat. When planning my days, I was inspired by the principles of agile software development. It’s worth getting familiar with. So, I decided to have quarterly goals, split into monthly and weekly goals. By splitting my main goal into smaller ones, I was able to reach success more often. It is more foreseeable, manageable and motivating. Planning is fine, but I also learned that I need to iterate sometimes. A new client comes, or I get sick… anything can happen, but I thrive to stick to my weekly ‘sprint’ and stay focused.

Moreover, every morning I prepare a list of to-dos and review my results at the end of the day. Actually, it is a post-it that I write while I drink my morning coffee. If a post-it is not enough for all my daily tasks, than something went wrong during my planning. You can use post-its, a task management software, Google apps, mobile apps, a handmade bullet journal, whatever suits you, just do it! Your efficiency, and on the bottom line, your income will depend on how conscious, organised and focused you can be.

№9 Read and take advantage of free resources

I bet there is an answer for all your questions on Google. Use it. Don’t reinvent the wheel. Search for answers before you spend days on finding a solution for a problem that has already been solved in history. Read, read, read and take advantage of free resources, such as e-books, online training, Youtube videos, etc. It saved me time and money of which I didn’t have much in the beginning.

Work — life balance

Managing your private life when you work from home and you are responsible for yourself can be tough, but with planning, it is manageable, like anything else. Take into consideration your private life, too. When I list my to-dos and plan my week, I include my recreation activities, household-related work, and everything else that is urgent and/or important. I use Google Calendars (a private and a work calendar) to manage my time. I have 24 hours in a day of which I like to spend 8 hours with sleeping, so I can’t just focus on work if I want to live a happy life. Recreation is something that is not urgent, but very important. Consciously schedule time for it. It took me years to understand the importance of taking a rest, and of literally doing nothing. I couldn’t do it — I always had to do something, anything. It was difficult for me, and I also learned it the hard way. Don’t follow me, it’s bad. So, please, please, please…

№10 Always schedule time for recreation

Self-development

Being an entrepreneur requires certain personality traits, such as resilience, flexibility, self-confidence and calmness. Life will challenge you every day. You will always face obstacles that you have to overcome. Some days you will ask yourself who you really are. Is it that you really want? Why are you doing this? Why can’t you just sit in an office and get your salary every month?

№11 Don’t panic and get your sh*t together!

Talk to your friends and family, visit a coach, a mentor or even a psychologist, if you feel you are falling apart and need guidance. It’s not a shame, actually I think it shows great strength. For me it means that someone has self-reflection and spends time on self-development. I’m thinking about printing and hanging the Serenity Prayer above my desk that comes to my mind very often and reminds me of what to do in certain situations. I need this visual reminder every day. Being a self-employed freelancer is a constant trip into my own mind. With freedom comes responsibility, and you have to live up to it, if you really want to become your own boss.

Closing and celebration

2017 was one of the most valuable years in my life regarding my self-development and career. I was able to reach my goals, and I successfully created the fundamentals of my business. It was not easy, I will not lie about that. I had my ups-and-downs, my concerns, questions, and many happy days. I’m lucky to have a supporting atmosphere around me. I’m really grateful to my clients who trusted me, my family and friends who supported my idea of becoming a freelancer, and all my partners who helped me reach my goals. I have already set my goal for next year, and my plans for Q1. I’m finishing up a few things, improving and optimizing a few tools for operating my business better next year. There is much room for improvement, I’m aware of that, and I work really hard to do things better. Now, I’m planning to do nothing for two weeks during the holidays as a celebration. Here is my last advice before Christmas: always celebrate your successes, no matter if small or huge. We all deserve it.

№12 Always celebrate your success; you deserve it

SUMMARY

№1 Only start a business when you have enough savings
№2 Have a business plan before starting your business
№3 Gather a community around you for professional and moral support
№4 Set yourself S.M.A.R.T. goals
№5 Set up a bookkeeping system and keep a record of your finances
№6 Count on the money only that you already have in your bank account
№7 Outsource everything you can
№8 Become agile
№9 Read and take advantage of free resources
№10 Always schedule time for recreation
№11 Don’t panic and get your sh*t together!
№12 Always celebrate your success; you deserve it