This is about to be some tea.

A lot of business owners shy away from this topic because making mistakes is embarrassing to admit. We think people won’t want to work with us if we don’t have our businesses as together as we make it seem on social media, and we want to portray an air of full ease and control at all times.

However, if you’re a business owner yourself, you know that’s far from the truth. I’m of the opinion that we should talk about it openly.

So, without further ado, here are 5 huge mistakes to avoid when starting a business and how to avoid making them yourself.

Mistake #1: Not Having a Contract

The holy grail of mistakes, my friend.

When I first started my business, I was mainly working with friends, so I thought things would be fine and dandy. Of course, I knew that contracts were important once you scaled, but at the very beginning? It didn’t seem like a pressing matter.

Booooooy, was I wrong.

Before you’ve developed the confidence that you’re running a full-blown business, sending a contract can feel scary. It can feel demanding. It can feel like “how dare I set terms when they so graciously want to pay me for my work?“

At the beginning, it’s so easy to want to bend over backwards for the people you work with because you are so grateful that you’re making money doing something you like.

And that’s how you get taken advantage of.

Contracts should not be scary. Contracts protect both you and the client. They set expectations and hold you both to a higher standard of work and collaboration. Use them to avoid huge mistakes when starting a business.

Mistake #2: Offering Discounts to Friends

This feels like a hot take, but here we are.

There’s a difference between offering a discount because you genuinely want to work on a project and the person can’t afford your full rate, and offering a discount solely because you’re friends.

A major difference.

Sometimes, when you work with friends, there’s a weird expectation. (Of course, not always, and luckily most of the friends I’ve worked with have been lovely.)

But sometimes, friends will feel entitled to more work than you’re willing to give just because there’s an emotional connection there. And you’ll feel obligated to follow suit because you care about them.

So if you give a discount? That’s more work, for even less money. And that’s how resentment starts.

I’ve unfortunately been in a few situations now where I gave away work for cheaper than normal, and by the end of the project I felt so taken advantage of that I didn’t even want to be friends with the person anymore.

If a friend approaches you about a project, try to see it objectively; if this person were a stranger to you and had slid into your contact form to work on a project, would you say yes? Or, do you feel a sense of obligation because you have an emotional connection?

It’s hard to distinguish, but trust your gut on this one to avoid mistakes when starting a business.. Which leads me to…

Mistake #3: Not Trusting Your Gut

Trust your freaking gut,.

The amount of times I have overlooked *so* many client red flags solely because I wanted the money (or to fill out a slot on my schedule) is frankly embarassing.

When you first start out on your business journey, you genuinely don’t know what the client red flags are. You’re figuring them out as you go. And no matter how many blog posts you read on this topic, you can’t really spot them yourself.

And then you learn the hard way.

This is actually why I feel like it’s important to do a lot of work in the beginning; the faster you work with a lot of clients, the faster you’ll learn the red flags, and thus, the faster you’ll work with people who actually value you.

But looking back, if I’m honest with myself, my gut could have saved me from a lot of heartache.

Hot tip: sometimes it’s hard to do a gut-check because you’re flattered that someone wants to work with you. Hop on a call with them, and before you send a proposal, give yourself at least one night’s sleep (ideally 2!) to marinate on whether or not it is actually a good fit. I actually created a gut-check guide for myself—here’s what I ask:

Check Your Gut with These Questions:

• Did you get an overall good vibe from the client?
• Will you be inspired by their design style?
• Can you envision yourself being excited to work on their project?
• Will it be good for your portfolio?
• Do you get a sense that the client will trust you as an expert?
• Do you get a sense that the client has their shit together? (Will pay you on time, will have their copy in by a certain date, etc.)
• Close your eyes and listen to your gut. How do you actually feel about this client?

Mistake #4: Booking Out Too Far In Advance

If you’re entering the freelance world for the first time after a life of stable employment, the lack of structure can feel anxiety-inducing.

Of course, it’s human nature to want stability and to make sure you know where your next meal is coming from. (I’m a Taurus, so I’m the queen of wanting to have a stable plan.)

However, the impulse to book yourself out can lead to some fatal mistakes.

When I first started, I was undercharging. By a lot.

And so many people wanted to work with me. (Obviously—which, I understand now is because everyone was price-shopping. But back then I thought I was just talented and popular.)

I was like “This is amazing! Everyone says freelancing is scary but I’m booked out for the next 5 months! I’ve got money coming in, this is good!”

Of course, 2 months in, I was working 14 hours a day, and my skills were progressing like wildfire. Not to mention, I had learned so much more about the industry & how severely I was undercharging. But, because I booked myself out so far, I was stuck doing incredibly low-paying work for at least 3 more months, when I so desperately needed to raise my prices.

Three huge lessons came from this:

• If you’re booking more than 2 months in advance, it’s time to raise your prices.
• Do not book more than 3 months in advance, even with the raised prices.
• If you book yourself out more than 3 months in advance, a dream client will slide into your DMs and you won’t have time for them, and you’ll be heartbroken. This is one of the most crucial mistakes to avoid when starting a business.

Mistake #5: Not Establishing a Project Timeline, and Not Enforcing It Once You Have One

Timelines are vital for project-based businesses.

Not only do they hold the client accountable to give feedback, but they hold you accountable as the business owner.

When I first started, I didn’t give project timelines because I genuinely did not know how long any given project was going to take me. And honestly, for your first one or two projects, that’s fine.

However, I’ve learned this the hard way: when you don’t give a timeline (and when it’s not enforceable in the contract), clients will literally drag out a project for a year or more.

Timelines are hard. Enforcing them is even harder. Most of my projects, even now, spill over my given timeline at least a little bit. And if it’s only a few final tweaks spread out over a week or two after the project end date, it’s fine. (I’m also charging enough now that I don’t resent it when it happens.)

But when it starts to get to be too much, you’re going to feel so thankful that you laid it out both in your proposal and in your contract, and avoided these mistakes.

Mistakes in business are unavoidable; learning from them is the important part.

Ironically, I used to read tons of blog posts like this in the beginning of my business. I always thought to myself, “That makes sense, but I think I’m a pretty good judge of character, and nothing bad will happen!“

Oh, young Sarah, so impressionable.

Generally speaking, I’m of the opinion that people are always trying their best. I trust people. I believe they will treat me with the same dignity that I treat them. And in 99% of cases, that’s true.

The problem is that you can’t always spot the 1% from the get-go, so setting up the necessary barriers to protect yourself is important.

Don’t be like me. Learn from my mistakes.

Relevant Resources

• Find freelancer contract templates here.
• Find terms & conditions templates here.
• Notion is my favorite way to establish project timelines.
• Dubsado is my go-to platform for sending contracts, proposals, and invoices to clients.