For several years, I was working as a sole proprietor doing IT for several businesses in the LA area. The clients ranged in industries and size, from 5-person offices in PR to 500-person offices in entertainment. I wanted to share some of the lessons I learned from managing that enterprise. Although I no longer do IT consulting full-time, it got me through college and paid my living expenses for several years. It was an incredible experience.

If you are interested in going it alone, I have some basic advice that applies no matter your industry.

1. Billing
Getting paid for your work is probably the most important thing you’ll need to manage as a sole proprietor. I billed on the 15th and the last day of the month, with terms of 15 days from invoice to payment.

I used a program to track hours and automate invoices for Mac called Billings. I liked it, but the new thing is to use a web-based service that accepts web payments, like Intuit’s. While your clients aren’t likely to pay online (and you should probably discourage it to mitigate fees), the option is helpful and online tracking means automated alerts when the bill is not yet paid.

Delays in being paid means you’re getting less money (money not in your bank earns you no interest), while the client gains interest from not paying you. You have expenses and bills. While I never did this myself, I highly recommend charging a penalty on your invoices for past-due payments. This should at least equal the interest rate of your bank.

Lastly, don’t be afraid to charge what you’re worth. Cut-rate prices signal prospective clients that the quality of your work may be substandard. Negotiate. It’s tricky at first, but if you set a lower limit and start above that, you should be able to get what you’re looking for.

2. Pay the man
While we’re on the subject, keep amazing records of your expenses and consult an accountant or knowledgeable person about what you’ll be able to write off and pay from a dedicated bank account. This will keep your records much cleaner.

On the flip side, taxes will be your biggest headache. Set aside 15% of your income and pay quarterly. It’s a huge hit to your income, but you should be getting a substantial portion back at the end of the year, provided you are good about receipts and write-offs. If you can’t afford the 15%, you should think about raising your rates.

3. Network
This hardly needs to be said. Network in every way imaginable. Attend conferences, connect with old co-workers, and get involved in your industry. Having an online portfolio and recommendations on LinkedIn will go a long way in establishing your credibility. You’ll learn more and find new ways to improve your business.

Keep a spreadsheet of freelancers that can help you out and your experiences with them. Give jobs to friends. They’ll pay you back someday with their own reciprocal connections.

Talk to EVERYONE about what you do. I got jobs from roommates, old colleagues, professors, and people I met in bars.

I once got a client from standing in an elevator with an armful of old computer points and saying “Can you believe I’m going to fix this?” A gentleman in the elevator looks and says “If you can fix that, I might need you.” Keep your elevator pitch in your back pocket. Be able to say in 15 words or less what it is you do. Internalize your values and mission about how you work. Mine was “I am passionate about making technology work for small businesses.”

4. Feedback
You aren’t perfect. Your work isn’t flawless. That’s not an issue. If you are willing to accept criticism, it will reflect well on you and your work ethic. Go above and beyond in circumstances where it’s required and make your clients a priority. Communicate as best you can about potential pitfalls and this will also give you a chance to demonstrate your intimate knowledge with your industry.

5. Make mistakes
I’ve made more than I can count, and I lost business. But I also learned from these experiences and you must keep the mindset that the payment lost is actually paid to you in knowledge. You won’t make the same mistakes again or in the same way.

6. Always have new business
You may have plenty of clients or more work than you can handle. That doesn’t mean it’s time to stop looking for new clients. Be prepared to grow your business along with the work you do. Keep a calendar of follow-ups to keep in touch with those that you’ve done business with before and remember that you could lose your bread-and-butter client any day. Don’t be unprepared to lose a client, you must always have another one on the burner.

6. Enjoy
You’re a sole proprietor. Enjoy the freedom! You set the schedule, you create the priorities. Spend some of that time doing what you want to do. Life is too short not to attend your kids’ soccer game or miss the chance to reconnect with old friends. There’ll always be work, but there won’t always be the opportunities you now have the freedom to enjoy.