Most new full time freelancers learn how to handle their business through trial and error. Many times learning these lessons is frustrating and costly.

There is no perfect system for managing your freelance career, but there are five major mistakes you can avoid that will save you time, money and aggravation.

Don’t Do It “Under The Table”

Many new freelancers dream of all the tax-free money they can make if they just keep things hush-hush. However, your dream will quickly turn into a nightmare when a client reports what they’ve paid you on their tax forms and the IRS starts questioning why you did not report the income. Keep track of all the income you make and set aside a portion of it for taxes so you are not slammed with a huge tax bill at the end of the year.

Calculate Your Hourly Rate

Clients often offer a lump sum for a completed batch of work. Estimate how long you think the project will take and then divide the total amount the client is offering by the number of hours you think that you’ll spend working on it. Novice freelancers often end up working for less than minimum wage because they look at the “big number” without considering how much of their time it will take.

Minimize your Distractions

The most difficult part of successful freelancing is time management. It is very easy to get distracted during the course of the workday checking emails, taking care of household chores and doing other tasks that could wait until your workday is complete. Set aside a certain number of hours per day that you devote strictly to working and save everything else for after you have met your deadlines.

Don’t Blow Deadlines

An unreliable freelancer is a freelancer who runs out of work. Word of mouth spreads very quickly in the information age. Don’t be so eager to earn money that you take on more work than you can reasonably complete within any given time frame. The short-term gain is not worth it if you shoot your credibility in the foot.

Avoid Nasty Breakups
If you get an email from a client that sends you screaming from the rooftops and you are ready to fire them, take a deep breath and calm down before you respond. The best approach is to thank them for the opportunity they’ve given you then nicely explain why it’s not working out for you and it’s best that they find someone else.

Freelance work is a business just like any other. You have to act professionally, manage your business and be conscious of your image. The strength of every freelancer’s business depends on how they handle it; handle yours properly and success will follow.

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Thanks to Catherine Christaki on Twitter