Whether you want to start full-time or part-time, more and more professionals are turning to freelancing and entrepreneurship. This is a very different reality from that of employees. No one is immune to a misstep; Therefore, here are six mistakes that are often made by new self-employed workers and how to avoid them.
If you want to become self-employed, take the time to make an appointment with an accountant, but not just any accountant. Since there are many advisors related to finances, choose one who is very familiar with the specific reality of self-employed workers and their legislation, as well as the basics of taxation for entrepreneurs in Quebec.
Together, you can make a game plan and see if it's better to incorporate or not. It would also be interesting to discuss topics such as taxes, available tax deductions, instalments and your retirement. The more prepared you are, the easier it will be to dive into the world of self-employment. Obviously, you can use Bankeo to find an accountant who will meet your needs.
A mistake often made by new self-employed workers is to keep an employee mentality. Since most have only known this reality, they use what they have learned in the world of entrepreneurship. Unfortunately, to succeed as a self-employed worker, you have to let go of these ideas. Here are two examples:
A self-employed worker is more of a business partner of an employee:
Indeed, a self-employed worker is not the employee of his client, but a partner or collaborator. It is a relationship of equals. For example, the client cannot force the self-employed person to work only for him or her or from his office.
To have a decent quality of life, I have to ask for more than an employee:
Why are the rates of a self-employed worker so high? The reason is simple, a self-employed worker has several expenses. He must also finance his taxes, his vacation, his retirement and his insurance. His billable time is also less than that of an employee. According to calculations, a self-employed worker would have to pay at least $40 per hour to live decently.
Most freelancers and self-employed people wear many hats. They are responsible for finding contracts, invoicing, accounting, following up with customers, promoting their business, etc. After a while, it can become exhausting, especially if it's not your main area.
Therefore, as mentioned for our first mistake, take the time to surround yourself with professionals. This can be an accountant, a business lawyer, a coach, but also a social media manager, a strategist, a graphic designer, etc. A virtual assistant can certainly lend a hand if needed. In addition, take the opportunity to meet other self-employed workers at networking events. In addition to growing your network, you will be able to chat with people who are going through the same challenges as you.
To protect yourself and your business relationship, it is advisable to have a service contract. This should contain elements on the details of the provision of services such as its process, payment terms, intellectual property and termination. Often, a simple email exchange is not enough to avoid misunderstandings and problems. Take the time to meet with an employment lawyer to discuss everything you need to protect yourself.
We would also like to take this opportunity to remind you that a contract found on the web will probably not meet all your needs.
In the same vein, another mistake often made by new self-employed workers is not asking for a deposit before starting work. However, it is something that is increasingly in demand in the entrepreneurial and freelancing world since it allows you to protect yourself from bad payers.
Once the contract is signed, ask for a percentage of the amount. This can be done in different instalments throughout the service. Some freelancers ask for 50% at the beginning and 50% at the end, while others prefer 30% at the beginning, 30% at mid-term, and 40% before sending the final files. Whatever you do, don't forget to mention it on your service contract.
Finally, when you become a freelancer or self-employed, you can quickly feel overwhelmed by everything related to your accounting, especially if this is not your field of expertise. Have I calculated my taxes correctly? Have I sent this invoice or received payment? Have I taken the time to enter all of my business expenses from the past month? Have I kept all my receipts for tax deductions?
Fortunately, there are plenty of accounting tools and software to help you and avoid costly mistakes, including Momenteo, QuickBooks, Xero , and Sage. So, forget about complicated Excel spreadsheets and shoeboxes to store your bills and move forward to modernity. You'll save time and money.
As we said earlier, there is a good chance that as a freelancer or freelancer you will make mistakes and that's normal. However, we hope that you will be able to avoid the ones we have just presented. Don't forget to take the time to surround yourself with a great team and keep in mind that you are no longer an employee, but your own boss. Good luck!
Whether it's filling out the form or talking to our team, we'll get to know you, your business, and the type of bookkeeper you're looking for.
Our solution will find you the 3 accounting specialists that best suit your needs and will contact you at the desired time.
100% free and without obligation, our team will accompany you to ensure the best possible connection with your ideal accountant.
Your request will be processed within a maximum of 48 working hours.
