In addition to the excellent points made by others, I would add: 1. Not using a real contract. Get something like hellobonsai.com if you don't have an attorney

In addition to the excellent points made by others, I would add: 1. Not using a real contract. Get something like hellobonsai.com if you don't have an attorney, but use a real contract. You're (probably) not going to end up in court, but if you do you will be glad you have a contract that lawyers understand. 1a. Not being very specific in the scope of work. The scope of work must be referenced in the contract, and you must keep it up to date by adding additional scope as appropriate. In case of confusion or dispute, you can always refer the client back to the discussion you had about the scope of work and remind them that they signed off on it (yes, make them actually sign off on it). 2. Not collecting a deposit up front. Depending on the size of the client, 50% of the first month's fees in advance might be appropriate. More might be smart, depending on the client. This is also a good qualifying step to filter out clients that only think they can afford your work. You then invoice as normal, with the goal of keeping the amount in retainer constant (FIFO for money). If you don't do this, you will eventually have to eat a $5k or $10k invoice that you need to pay your own bills. Better to use the customer's financial reserves than yours. 3. Working with very small local clients at all. Working primarily with very small clients is a very risky way to run your business. If you insist, the absolute bare minimum you must do is have a real contract and collect a significant deposit up front.