You can define freelancing a lot of different ways, but my favorite is looking at it as “taking responsibility”…responsibility for marketing, taxes, vacation — in other words, the stuff employers take on in exchange for control over your sleep schedule, availability, and free time…you know how it works.
Some responsibility is obvious, but some of it isn’t. I want to talk about one of the more subtle, but also most important responsibilities, and that’s minimizing risk and threats to your freelance business.
We’ve all seen what they can do. Tax issues…freelancer burnout…people going back to employment because of cash flow problems. Those are risks we all face, but most of them? They’re manageable at a certain level.
If you’ve never heard of a SWOT analysis, it’s a way to look at where a business (even a tiny freelance business) stands in relation to internal and external elements that can either help or hurt. That “T” for “threats” is what I’m talking about when we’re talking risk. Those threats can come from a lot of places in a lot of different forms, but let’s cover 5 that are common to us as freelancers.
#1 Not Making Room for Downtime
Since BlackFreelance is all about shaping a freelance business that improves your life, let’s start here.
Too many of us make a dangerous strategic assumption in our freelance work — the assumption that our energy is endless, that problems won’t slow us down, or at the very least that we’ll figure it out when something ugly does happen.
Don’t think you are? Well…strategy doesn’t have to be overt to be real.
If you aren’t incorporating vacation, rest, the risk of illness/disability, and a comfortable sustainable pace into your business, you have a strategy that assumes you’re superhuman. I know that’s common for us as Black people…Black women especially, but it’s not reasonable and it’s not a good idea.
Prioritize making your life easier and making space. Automation (of marketing especially) can go a long way.
I’ve talked about building PTO into your freelance plans before, but that mostly comes down to revenue. We’re covering this in this week’s newsletter, but for most of us, if we feel like we can’t take a break, it’s usually tied to fear of scarcity — fear that we don’t have enough now or will jeopardize what’s coming in the future. That’s largely a cash issue…so get those rates up.
#2 Not Planning for Retirement
Employers have abandoned the responsibility of helping people retire. As freelancers, we should treat ourselves better.
Sure, there’s a whole conversation to be had about SEP vs. Simple vs. Roth vs. Solo…even just savings and CD ladders…but you know what? They all start with you having enough cash above and beyond your business expenses to contribute in the first place.
Even if you only start with an obligation to contribute $100/month, you should be working on getting your cash flows to a point where you can make plans to take care of your future self. If you don’t think you are right now…get those rates up.
#3 Not Having a Buffer in Your Business
When I was interviewing accountants in my journey to put myself on a salary, one complimented me that I had anything at all in my business bank account since a lot of people he worked with didn’t. I was embarrassed about my tiny little business savings at the time, but his reaction tells me that a LOT of us out here are doing this solo business thing with no parachute.
That’s not ok.
Just like retirement, this isn’t about waiting until you can put huge chunks of cash away. It’s about working regular contributions to some sort of cushion into your revenue plans. Which, if that’s a stretch for you, probably means…you know what I’m gonna say…it’s time to get your rates up.
#4 Hoping Your Marketing Works Itself Out
Marketing is simple relationship building — meaning it doesn’t happen on its own.
Is it possible that you’ll see a tweet that’ll get you one great gig or you’ll trip over one amazing client that changes your freelance business? Of course, but relying on chance and one-off successes is a sure-fire way to maximize the risk you’re exposed to.
Pricing, niche selection, sales…it’s not so much about spending more time on your marketing (though sometimes that’s the issue) as it is becoming someone who centers marketing in their freelance work. If you don’t feel like you’re that kind of person but want to get on that journey, start here.
#5 Not Asking Questions or Having Conversations
This is a risk that gets worse as you get more comfortable as a freelancer…which means it can be even more dangerous.
Once you get into your freelancing groove, it’s easy to forget just how little perspective we have out here on our own. It’s honestly worse than an employment situation.
Unless you have incredibly open communication with amazing clients, you’re subjecting yourself to ALL kinds of risk…but even if you have the best clients in the world who want to see your business survive and thrive, you still need to be out here talking to other freelancers, other professionals in your skill set, and other people in your niche to make sure you’re leveraging wisdom from outside your own little bubble.
So where should you be? Personally, I spend time in our BlackFreelance community, but also with other content marketers, other people in my healthcare and SaaS niches, other self-employed people in general, and even in regular coaching engagements. I need all of those to keep my perspective fresh and at a level where I’m minimizing risk.
Sound like a lot? It can be. That’s why it’s so important that the rates you charge for production reflect the time you have to invest in unpaid work like this that you need to keep your business going.
If you went through this and saw a bunch of risk you’re exposed to…that’s a good thing. We’re all operating with risk, employed and freelance alike. But most people just skip along, hoping none of this will catch up with them. The fact that you’re aware puts you ahead of the game, and that’s where you want to stay.