A guest post by Frankie Wallace. 

Freelancers don’t have a boss — they have several.

Even though freelancers technically work for themselves, they’re often at the whim of others. Clients, customers, and whoever is paying the invoices all have a major impact on the life and success of a freelance creative. When it comes to Business risks, freelancers face many of the same issues traditional professionals do.

However, by approaching those risks from the unique perspective of a freelancer, it’s possible to lessen their impact or even avoid them completely. Let’s look into the specifics of how freelance workers can minimise risk:

Competitive risk

Anyone who has applied for a job or a side gig knows that there are plenty of other workers gunning for similar opportunities. Competitive risk means that your competition may prevent you from succeeding as a freelancer. If your competitors take your business, there won’t be enough left for you.

Freelancers can lessen this risk by offering something unique. Yes, you may still have a similar product or service to your competitors, but by offering something that’s extra or better, you can woo more clients.

For example, a freelance writer will usually specialise in specific niches, whether that’s a focused topic or a type of content, like advertising copy or white papers. This can make you stand out from the rest, and Minimise Risk caused by this competition.

Execution risk

Execution risk refers to the possibility that your plans may not actually work when put into practice.

As a freelancer, everything is on your shoulders, and the fear of failure is enough to send anybody back to a 9-to-5 job. However, there are a number of ways that freelancers can limit execution risk:

• Prioritise your objectives. What is the biggest issue right now? Which solutions will have the most positive impact?
• Create key performance indicators that enable you to track and analyse what’s important. Determine how you’ll track them, when you’ll analyse them, and the actions you’ll take to make improvements.
• Regularly go over your list of to-dos and make sure each one is contributing to your main objectives. Every month, go over your objectives to make changes as necessary to minimise risk.

Unanticipated errors that inhibit you from completing work can also contribute to your level of execution risk. For example, it’s important to regularly back up data. Skipping this step could cause you to lose valuable progress and miss deadlines.

Planning ahead — in this case, backing up important business information — can also minimise risk. As the head of your freelance business, strategy and plans will continually change. Execution risk isn’t there just at the beginning; it’s there every time you change or evolve your business too.

Founder risks

Many founder risks have to do with exposing yourself to legal issues and putting your personal income at risk. There are a few ways to limit these risks:

• Never do work without a contract that both you and the client sign. Even if you work with distant clients online, this can be done easily with an online PDF editor. While you can write a contract on your own, it’s best if you have a lawyer write one for you or at least review it.
• If you’re asked to sign a client’s contract, read it thoroughly, ask for clarification where needed, and ask for necessary changes to be made before you sign it.
• Put everything in your company’s name instead of your own name. You’ll want to explore the different ways to set up your own business. For example, instead of operating as a sole proprietor, you may want to incorporate your business.
• Keep your business’ sources of income and expenses separate from your personal finances. It’s best to set up a business bank account that everything flows through.

Launching a business is a big deal, and it involves carefully managing risk. Tackle the risks that are in your control, but know when to contact a professional, especially when it comes to legal risks.

Product risks

There are a number of product risks a freelance creative may face. Here are a few possible product risks:

• Customer Experience Risk: Your new product or service is resulting in a poor customer experience, which is impacting sales.
• Demand Risk: You launch a product or service that there isn’t a demand for.
• Operational Risk: You announce the loss of your product or service, but there’s a delay.
• Quality Risk: Your product or service is of a low quality.

Dealing with these risks and failures is about being open and honest with your audience. If your customers are having a bad experience, improve your customer service and don’t shy away from negative comments.

If a launch is held up, be forthcoming with the information and honestly explain why. Transparency is key to avoiding customer frustration in any marketing campaign.

When it comes to demand or quality issues, listen to your audience. What do they want? How can you serve them better?

Final thoughts to minimise risk

Freelance creatives may absolutely love their jobs and the work they produce, but without a dedicated group of clients or customers, they won’t be able to make a living.

Many of the business risks that freelancers face are to their earning potential. Mitigating these risks can mean keeping a steady enough cash flow to continue doing what they love.

So what are you doing to minimise risk in your creative business?

About the author

Frankie Wallace regularly contributes to a wide variety of blogs and enjoys writing about health tips and politics. Wallace currently resides in Boise, Idaho and is a recent graduate from the University of Montana.

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