The # 1 Mistake New Freelance Writers Make

Hey, you! New freelance writer! I’m talking to you! Time and time again, I see new freelance writers making the same mistake. As a result, they don’t make as much as they could, and they feel stressed out. That’s a one-way ticket to Burnout City, my friend! 

So, what’s the #1 mistake that freelance writers make? 

They don’t treat their freelance writing business as a legitimate business. 

Let me tell you a little story about how I failed at starting my freelance writing business twice (almost three times!). Straight out of the gate, I had the writing skills necessary to become a freelance writer. I had earned an English degree, and I had professional experience as a copywriter. On paper, I could do what I had set out to do, which was write for money. 

So why did I fail?

Because I had no idea how to run a business. 

I wasted countless hours updating my personal blog and working on my Pinterest boards, even though those activities made me zero money. Even though I felt like I was working so hard, I wasn’t making enough money to pay my bills. Each time, I was forced to postpone my dream and find a new 9-to-5. 

A freelance writing business is like any other business. Except, instead of selling a product, you’re trading your time for money. Like any other business, you need to make sure that your freelance writing business is profitable. So how do I calculate profitability as a freelance writer? By figuring out your return on investment (ROI). 

A lot of new freelance writers jump into the career with zero idea about how to run a business.

WHAT’S YOUR FREELANCE WRITING ROI?

As I said before, as a freelance writer, you are selling your time to clients. Your time is your most valuable resource. 

When it comes to ROI as a freelance writer, your investment is the time you spend working and the return is the money you receive from your clients for your services. Thus, it makes sense that you should track how you spend your time, and how much money you receive for that time. By tracking and analyzing your ROI, you will be able to see which investments are giving you large returns, and which ones are not. 

Now hold up here: we’re not just talking about the time you invest in your client projects. We are talking about both the time you invest working in your business (on your client work) and working on your business (like marketing your services). Your work with your clients must fund the time you spend both in and on your business for your business to be financially sound. 

DOES YOUR FREELANCE WRITING BUSINESS HAVE A HEALTHY ROI?

So how can you calculate if your freelance writing business has a healthy ROI? Here’s what to do:

1. Start using time tracking software to track all the time you spend working. I use Toggl and I love it, but there are many similar services. I like Toggl because it allows me to track both projects and clients on the platform. I include my business as one of those clients, and I track my various business activities (accounting, Instagram, blogging, etc.) as projects.

2. Track your time for at least two weeks. For a good reading, I suggest tracking your time for one month.

3. At the end of the month, divide how much you earned by how many hours you worked in total. This is your actual hourly rate.

4. Hint: the amount of money that you earned is different from the amount of money that you received. For example, if you completed a blog post for a client but they didn’t pay you by the end of the month, you would still count that as money earned. Count any work you complete within the month.

5. Now, how does your actual hourly rate compare to your freelance writer rate? If your actual hourly rate is close to your freelance writer rate, congrats! You have a good ROI and your business is profitable. But if your actual hourly rate is drastically below your hourly rate, it’s time to make some changes to your business.

Calculating your ROI will help you see if your freelance writing business is profitable or not.

WHAT TO DO IF YOU HAVE A BAD ROI

So, what do you do if your actual hourly rate is much less than your freelance writer rate?

You have to find efficiencies in your business. Efficiencies are ways that you can save time or money (which is the same thing when you’re a freelance writer) to make your business more profitable. 

Here are a few ideas to make your business more efficient:

CALCULATE YOUR MARKETING ROI

Now that you’ve been tracking how much time you spend on each type of marketing project for your business, it’s time to analyze them and see if they’re helping you to make more money. 

Create a spreadsheet that lists each of your marketing channels and how much time you spent on each one in the past month. 

Then add a column where you calculate how much money you made from that channel. For this example, you’ll add up how much money you made in the past month on projects from clients that you acquired via that marketing channel at any time in the past. 

For example, if you worked on a project in the past month for a client you acquired six months ago from cold pitching, you would still count that money as cold pitching money. 

Here’s an example of what that would look like:

In this example, the freelance writer is putting a lot of time into cold pitching, and they’re getting a nice return on their investment. But they are also putting a lot of time into Instagram, and they’re not seeing any money from those efforts. 

For this writer, I would recommend either nixing their Instagram channel altogether or drastically overhauling their strategy. If they choose to drop their Instagram channel, they could reinvest some or all of that time into their most profitable channel, which is cold pitching. 

Hint: this exercise works best over a longer time, like one quarter or more. I recommend checking in with your business quarterly to discover which channels are helping your business and which are just wasting your time. 

STREAMLINE YOUR PROCESSES

What about the administrative portion of your business? Here are a few ideas to make sure that get the most out of your time:

• Limit answering emails to just one hour per day. Put down your phone and get lightning focused on the task at hand. If you can respond to the email in less than two minutes, do that. If not, create a corresponding task in Asana or your planner and determine when you will complete the task.

• Onboard all new clients with a 30-minute phone call. Iron out all the details of the project so that you don’t need to email back and forth.

• Charge clients for phone calls. Make sure that you bake time for phone calls into every proposal that you send.

• Use Calendly to set up meetings.

• Use Quickbooks to help you organize your finances.

CHARGE MORE FOR YOUR WORK

As I mentioned before, your client work is funding the rest of your business. If your actual hourly rate is way less than your freelance writer rate, then maybe you just need to start charging your freelance writer rate. Check out this post to learn how to earn more writing! 

If you liked this content, my freelance business course, The Freelance Writer’s Guide to the Galaxy, has tons more info on how to launch and run your freelance writing business. 

I hope you found this post helpful! But if you have any questions, leave a comment below or DM me on Instagram @thefreelancewritersguide.