Schedule in time for long-term projects
This has bit me in the ass more than once. It's one thing to say that long-term projects deserve attention, it's another to physically schedule them in. Your clients will need quick fixes and other maintenance, and they may not want to wait until you have some "free time" (which doesn't exist as a freelancer). I'd recommend pencilling in a few hours per week for any long running projects, whether the client anticipates a need for it or not. Besides, it's better to have extra time than not enough.
Schedule in time for family, friends and yourself
I don't know about you, but my family and friends (especially my mom, dad and girlfriend) need help with their websites. And I always promise to help out, but assume I'll do it in my "free time" (again, it doesn't exist). Well, that just doesn't work. Even if I don't get paid to help, I need to book them in just like any of my other clients, otherwise they'll be the first people I neglect even though they're most important to me in "real" life. My own projects get neglected even worse, something I definitely have to improve on.
Try to find a good daily routine
Even after eight months, I haven't quite figured this out. I've tried working all at once when I wake up, working before I go to bed, or working in small chunks throughout the day. Some days it feels like I've worked all day even though I get nothing done. Other days I get a ton done but feel like I haven't done anything. I'm still trying to figure out which times of day to work for optimal productivity, but this remains elusive.
Stay focused on your speciality
Try not to overcommit yourself
Man, I say I've learnt these things, but they keep getting me time and time again. I hate to say no to people and try to give the best service I can. And unfortunately, when combined with optimistic time estimates, this can really be overwhelming. If something seems like it will take 25 hours, you can probably assume there will be at least 5-10 hours of stuff you're not thinking about, so try and factor that in. If you don't, it'll be your weekends and evenings that pay for it. Let me repeat my mantra: it's better to have extra time than not enough.
Learn to relax and have fun, even under stress
This has saved me from having a nervous breakdown at least once or twice. Even if you're completely running out of time, overworked and overstressed, the best thing you can do is take a deep breath, put your shoulders back, do what you do best and try to have fun. Your work and your health will suffer if you try to work faster than normal to meet a deadline. Nothing can make you work faster than your natural pace, so just enjoy the work as best you can.
Find a tax accountant as soon as possible
Tax accountants are very smart, knowledgeable people, and they'll be able to give you advice on all sorts of financial topics. If you're like me, you'll spend hours reading tax advice on the web, only to feel like you might be missing something important. Rather than waste your time trying to master the art of tax jujitsu, find a great accountant and relax. Chances are you'll want one eventually anyway, so the sooner you do it the better.
When taking time off, get off your computer
As I mentioned, I often spread my work out in chunks throughout the day. Unfortunately I spend all the time in-between reading blogs, chatting with clients on IM or surfing the web. At the end of a long day, I feel like I've worked the whole day even though my billable time is just a few hours. The only real way to relax and refresh is to get away from the computer, whether it's just washing dishes, watching a movie, or leaving the house.
Learn when to charge fixed rate or by the hour
This is something I struggled with when I started freelancing, but now the difference is clear to me. If I'm doing something quite small and tangible, where I can picture all the steps involved, then I'm happy to charge a fixed rate. You always take a gamble with a fixed rate. Sometimes it takes you half the time you estimated, sometimes longer. It's best to over-estimate (ie. factor in the unknown) when doing a fixed rate. Also, new clients tend to like a fixed rate because they don't yet trust you, and a fixed rate minimizes surprises.
For longer term projects with many unknowns, where you'll be expected to fix bugs, and where the whole project is fairly open-ended, hourly is the only way to go. This way things are the most fair for everyone. The client only pays for the work you do, and you get paid for every minute you work. It's still important to remain transparent and communicate how many hours you work, and always ask before doing something billable that wasn't explicitly requested.
Honesty and trust are at the centre of freelancing
When a client hires a freelancer, they're not sure what to expect, whether they will get ripped off, or somehow be tricked into spending too much. It's very, very important to build trust with a client, and the only way to do this is by being completely honest and transparent. This means admitting when you make mistakes, explaining how you spend your time, and not lying about the number of hours worked. On the other hand, if you're (painfully) honest, your clients will be more than happy to put their faith in you to deliver.
Being honest also means managing expectations. If you think you'll have to miss a deadline, explain this as soon as you suspect it, and be honest about why you're behind schedule. If you're going to have things finished early, say this as well. Otherwise, next time when you're (only) on time, your clients will be disappointed because they expected that you'd be early.
Working for a reduced rate in exchange for ownership
This is something I've had to struggle with since I started freelancing. As a freelancer, most of your clients will be very small companies or independent entrepreneurs, and very often they will be looking for a partner to help build their company. This can be tempting. What if this company becomes the next big thing? What if you say no and miss out on a million dollars? It's important to really look at the numbers and what's being asked of you. If you would normally charge $1000 for the project, and they want you to work at half price in exchange for 10% of the company, what they're really doing is selling you 10% of the company for $500. Ask yourself if you'd pay $500 for 10% of the company even if you weren't the web developer (or whatever).
Also very, very important is to get this agreement in writing, and this means answering a lot of questions. What happens if you stop freelancing? What happens if they decide they don't want you involved any more? Is the ownership conditional on how many hours you work per month? If the company gets successful, are you willing to be involved with it full time? It's easy to have entrepreneurial dreams about people getting together to create something great and get rich, but reality is very unpredictable, so make sure you can answer all these questions on paper before you agree.
It's been a really great time freelancing, despite the occasional stressful moment. I don't think I could ever go back to working full time for a single company, having to be at an office 40 hours per week. I choose how many hours I work per week (typically 25-30), I choose when to work them, and I choose where to work. I choose which projects I work on, and I choose how much money I want to make. I wouldn't give up this flexibility for anything. I highly recommend freelancing for anyone thinking about taking the plunge.