The bigger my business gets, the more it costs. This is a common thing I hear among freelancers of all kinds as they build their businesses from zero to six figure revenue. Many of these costs are unexpected freelancing expenses that we didn’t account for when we first started our businesses.
How could we? Half the time we didn’t even know!
When I started freelancing in 2010 I thought freelancing was as simple as simply writing an getting paid for it. I never imagined I’d have contractors, a site to maintain and I definitely knew nothing about how taxes worked.
Granted, I was very young and naive. One could say I didn’t know how anything worked in the real world. Admittedly, there weren’t as many visible freelancers online as there are now. There was no one really blogging about this stuff, so I’ve learned many things the hard way.
Just in case you find yourself in a similar boat, here are some unexpected freelancing expenses you may or may not have been expecting as a freelancer. This is especially important for young grads who are looking into freelancing as a career.
The first of my unexpected freelancing expenses is the same as everyone else’s – quarterly taxes. I learned about taxes the hard way my first year freelancing and I’m sure I’m not the only one.
Quarterly taxes? What are those? You mean I have to pay Uncle Sam every quarter? How do I even calculate that? Welcome to taxes your first year as a freelancer.
Additionally, the more money I make, the more I have to pay. When you are a freelancer get ready to say goodbye to at least 15% of your net profit.
A few years ago I seriously thought freelancing was just a one-person show. I hadn’t yet realized that in order for me to really grow my business and make money that I would have to delegate to others. Insert the second of my unexpected freelancing expenses – delegating.
This started in the form of a virtual assistant and then an accountant. I’m also currently working on a large project and that requires subcontractors.
Essentially, I noticed that if I wanted to continue growing (and maintain my sanity) that I would have to spend money on help.
In this day and age no business can afford not to be active on social media. Social media allows you to leverage yourself as an expert and companies like to hire freelancers with their own social media followings.
Social media is mostly free, but there are some definite benefits to the pay to play model. For example, you can definitely get leads and boost your blog traffic by using Facebook ads. They are inexpensive and very effective.
The same applies to Pinterest. In theory, I could spend hours playing on Pinterest to boost traffic to my site. The problem is I lose time and money if I do that. Instead, I outsource it so I can focus on closing sales.
These are unexpected freelancing expenses in so far as I never imagined I’d be paying such close attention to social media. It wasn’t until I realized it’s importance that I started to focus on it and pay for it.
Note, none of what I mentioned is the same as buying followers. What I am buying is advertisement so I can potentially get more followers and leads.
Your Entire Financial Life
When you are freelancing you are responsible for pretty much every aspect of your financial life – savings, retirement, taxes, insurance of all kinds, the list goes on. No one is giving you health insurance, no one is giving you an employer match to retirement contributions and no is automatically taking taxes out of your check for you.
What does that mean? It means DIY tax and financial planning may not be enough and you may need to implore help from financial experts. It also means you are solely responsible for staying on top of your financial life – talk about unexpected freelancing expenses!
While it seems overwhelming (and it can be), it’s important to note that you can figure this stuff out as you go along. I know I have.