Avoiding freelance financial pitfalls: 9 tips for side gig success

Working at Moonlighting, I not only get to help freelancers connect with employers and grow their businesses, I’ve lived moonlighting first-hand as I built my own freelance graphic design business. I’ve seen and experienced what our users encounter every day. And I’ve learned how to overcome some of the toughest obstacles facing freelancers today.

To help you avoid the most common pitfalls, here are 9 top tips based on my own freelancing experience. The recommendations below helped me get through difficult situations, grow my clientele, and become a better freelancer.

1. Pay yourself first

When I was growing up, my grandfather always said “pay yourself first,” but it wasn’t until I ran my own business that I understood what that truly meant. As you’re launching or running a business, no matter the size, you’ll have a lot of expenses associated with it. The problem many business owners run into is that it can be a major drain on your personal finances to get something, or keep something, going. In the short term, this can be necessary, but if you don’t habitually “pay yourself,” then you’ll never make money.

Don’t lose sight of the true intention—to make money. Always take 10% of your earnings and save for the future before taking money out, reinvesting in the business, paying bills, or paying off debt. That percentage should be a crucial aspect of your personal finances and should grow commensurate to your success.

2. Know the numbers

Evaluate your revenue and expenses. No freelance ‘work’ is really worth doing if you’re losing money on it.

3. Don’t be afraid to turn away clients

Many new freelancers think they need to take any and every paying job that comes across their desk or even take jobs that don’t pay or underpay. I’ve been moonlighting as a graphic and web designer for more than 15 years, and turning away clients has been the most important decision I’ve made. You’ll want to carefully consider the following when deciding to take on a new project or client:

• Is this a project or cause I’m passionate about?
• Is this client notoriously or historically difficult to work with?
• Do I have time for this project based on my current workload or can I push this out to a later date?
• Am I compromising on my rates or budget?

Be selective to keep your sanity, reputation, and productivity intact. And keep marketing your services so your pipeline is full and you don’t feel need to take on every client.

4. Plan for slow seasons

The best time to find new clients is when you’re busy. You can always say no, but the worst time to find new clients is when you NEED more work. At that point, it’s a little too late—you’re desperate and will likely find yourself spending more money than you’re bringing in.

5. Clarify availability

Moonlighting enabled me to use skills I didn’t fully utilize at my full-time job (while making some extra cash on the side for something I loved to do). However, since I was also working for a business that operated during normal business hours, I would often get last-minute questions or requests that were time-sensitive. Loyal to my company and completely focused on my work at hand, I didn’t actively check my email or answer my cell during the day.

What should you do when you’re on the company clock and a client needs your help? Addressing the issue directly with my client helped set clear expectations for communication and available work hours. After that, my client knew to email me in advance with any requests or call after work hours, which, since we didn’t have to play phone tag, worked out better for both of us.

6. Track payment due dates and invoice clients

My biggest issue was asking people for payments. I eventually developed my own invoice template in InDesign, but keeping track of payment due dates and marking my calendar to make sure they paid was always the worst aspect—especially amidst my busy schedule. Moonlighting invoices changed the game for me and brought a new level of professional peace of mind.

7. Keep payments digital

As a graphic designer, I rarely meet face-to-face with my clients after the the initial consult, if at all. Working remotely meant that I often had to wait weeks for a check to arrive by mail to get paid.

Using an online invoicing tool like Moonlighting to email clients and allowed clients to pay my invoices online with a credit card at their convenience. They didn’t even need to sign up for Moonlighting. Now, I get a notification when the invoice is paid, and it directly deposits into my bank account.

8. Tackle your most important projects first

I used to be tempted to do all the “simple” tasks first and put off the complicated ones. This eventually came back to bite me when I was late on a project and lost a client. So now, I prioritize and research what I need to accomplish first. Like they say, “Don’t jump on a horse unless you know where you want to end up.”

9. Ask your network for referrals

As it is with most freelancers, one of my biggest problems was finding work. I reached out to my business network, previous colleagues, other freelancers and created a Moonlighting profile. Referrals from my connections and Moonlighting led to new opportunities and enabled me to continue to learn and grow.

Are you ready to start your own business or try out a few side gigs to get the feel of freelancing? No matter what path you choose, kick start your freelance business by joining the amazing community of freelancers, entrepreneurs, and gig workers on Moonlighting.Sign up ordownload the app today - Free!