Landing a few clients who keep you on retainer, paying you a set amount each month, can do a lot to even out a freelancer’s income.
While most clients will make sure to send you as much work as you’re willing to do for your retainer, you can occasionally get an even sweeter gig where a client winds up paying just to have you available, whether or not you’re needed. You can’t count on that sort of opportunity coming along, but it’s certainly a nice idea. The reality, though, is still a great opportunity for any freelancer.
Andy Stratton, a WordPress developer who works on retainer for several clients, says “I know that I have a baseline of pre-paid hours coming in a given month; I can better allocate time for my clients, plan my month(s) and they know I’m anticipating X amount of hours of work for them in a given month. They get a lower rate and we’re both pretty happy.” Continue Reading
One of the smartest business decisions I’ve made as a freelancer is to stop charging by the hour. I want to take the plate and bat for this method — not because I’m trying to convince every paid-by-the-hour freelancer to do an about-face, but simply because I don’t hear a lot of discussion taking place about per-task payment and its pros and cons.
Throughout the course of the article I’ll outline the six strengths of per-task pay, then respond to a few of the questions and criticisms you might have. Let’s start with the pros:
1. You can charge based on value to the customer. Let’s say you’re a freelance search-engine optimizer. You see websites making the same mistakes all the time and can optimize any website for search traffic in an hour. If you’re charging by the hour, you might make $65 for your services. If your skills allow the website to make $50 more sales each week, your per hour price is just a fraction of the real value of what you do. You’re under-valuing yourself. A task-based price can help you change that.
2. It often sounds cheaper than it is. Let’s assume a simple logo takes you half an hour to make and costs the client $200. To the client’s mind, $200 for a finished logo is a lot cheaper than paying a freelancer the hourly-rate equivalent of $400 per hour (most clients would probably faint at the price!) I think a lot of clients will also compare the hourly rates you charge to the hourly rates they themselves make and think: “If I’m not worth thirty dollars an hour, you’re definitely not worth $70!” Separating payment from hours worked can help prevent that unfavorable comparison. Continue Reading
Riddle me this, freelancers – is a killer month when you earn $10,000 working on jobs or when you’re actually paid that $10,000?
If you’ve been working as a freelancer for any real amount of time, you know all too well that completing a job has very little to do with the timeframe in which you will get paid.
Some clients (who we love) pay immediately – for those who pay electronically, this is often literally true. Other clients (and we love you too – mostly) can take weeks, months or (gulp) even longer to get the money to you.
Because of this fact, it’s really hard to figure out things like what our weekly and monthly earnings are. You might complete that $10,000 job mentioned earlier, but the money that comes in that month is from a few dozen jobs the month before totaling around $4,000.
Knowing that this is probably going to be a fairly common occurrence, how do you plan for your budget, savings, and retirement accounts? What can you do to make sure that you always have money lying around that’s easily accessible? Continue Reading
Thoughtful, strategic planning can make a mighty contribution to the success and growth of your freelance consulting business. With deliberate planning, you can guide your marketing efforts and client interactions to spend more of your time doing the kind of work you like best, with clients you enjoy, at good rates.
But strategic planning does not have to be an elaborate process to be effective. You don’t have to go on a special retreat, pore over a sophisticated array of “metrics”, or spend the day with a management guru to come up with a good plan that can make a major difference in how your consulting business thrives. Continue Reading
There are a lot of numbers about your freelance business you can probably tell me right now. You can definitely tell me your hourly rate. You can also probably tell me a rate somewhat below that hourly rate that’s the lowest you can afford to work for and still pay your bills. But you may not be able to tell me much about the numbers that businesses run on. And make no mistake, freelancing is the same exact thing as running a business — knowing these numbers make it a lot easier to grow your freelance business.
In particular, you need to have a few numbers easily to hand so that you can make decisions about how hard you need to be working on bringing in new clients and whether there’s some fat you could trim. Having the right variables on hand means that you can recognize problems or opportunities as they appear. Continue Reading
As a freelancer, one of the biggest constraints is that you have to do everything yourself. Partnering with someone else can help you get another set of hands on a project, if not directly improve your bottom line.
There are many different types of partnerships that a freelancer can build, depending on her own strengths and weaknesses. Before you start hunting for a partner, it’s worth considering what areas for improvement you see in your freelancing career — if there’s something that you know your clients would love if you offered or if there’s a particular opportunity that you need help taking on. Those considerations should be what you use to focus your search for a partner.
Unless there’s a specific reason to move faster, don’t push too fast to land a partner: do some due diligence and make sure you know exactly who you’re working with. You can build something that will be beneficial to both yourself and your partner for a long time if you move a little slower and do everything right. Continue Reading
Freelancers have the most unusual type of obstacles when it comes to getting their clients to pay them. Beyond customers going M.I.A. or claiming they forgot, sometimes freelancers find clients refusing payment because they are unsatisfied with the work or not sure if it’s what they wanted. Yet, the work was done, so you deserve to be paid. End of story.
As a freelancer, you need to take proper and effective precautions to make sure you don’t find yourself in a position where a customer is paying you late or not even paying you at all. Continue Reading
Most freelancers dread collections.
We’ve been promised this money in good faith by clients we’ve already worked for and we shouldn’t have to chase after the funds to get payment. But collections are a necessary evil for any freelancer who doesn’t get payment in full before starting work (and those rare freelancers may still face difficulties from bounced checks).
It’s important when working your way through the the collection processes to know when to send a nice collections letter versus a letter with punch. You need to have a handle on when to use a collection agency and when to fight for the money your owed with your own two hands. Continue Reading
As freelancers, we usually find ourselves neck deep in paperwork: invoices, project proposals for prospective clients, spreadsheets of to-do lists, and tax forms. The problem is that as we get buried under all this paperwork and try to wrestle all the administrative matters while juggling actual work, we often forget the one important document: our business plan.
You might think that your business plan is just the document you draw up at the beginning when you’re launching your freelance career. But the truth is this: your business plan is a living, breathing document. When was the last time you updated it?
Consider this new-and-improved version of your business plan as your business planning document. This business plan is a little different.
You’re probably familiar with your financial documents: profit/loss statements, balance sheets, and cash-flow reports. Whether or not you produce these yourself or hire an accountant to produce them, it’s important to understand that these documents are only snapshots in time. Continue Reading
When a new client has a project for you to work on, what happens next? Do you have a set process you follow? And, if so, is it written down anywhere? Or do you just go along with what you generally know you need to get started?
Whichever path you follow, that’s your client intake process. That may sound like a fancy term — more like something that a big agency would use than an individual freelancer — but considering that how you handle the first steps of your work with a new client can determine just how quickly you can complete a project and how happy your client will be with you, an intake process can be very important.
I’d be willing to bet that you didn’t become a freelance writer so you could be an expert at analyzing profit and loss statements or balance sheets.
No, you wanted to write awesome articles. Fabulous books. And sizzling sales copy for big corporate clients. The fact that you’ve never created a profit and loss statement for your writing business just isn’t as important as impressing the editors you’re about to meet at that writers’ conference.
And you, the photographer over there. Didn’t you spend all that money on equipment so you could shoot photos? Or was your goal in life to deal with those government authorities who keep wondering why you haven’t paid taxes? And those people just won’t leave you alone.
Last but not least, there’s you, the designer who wants no part of this discussion. Could this have something to do with that chat you just had with your father-in-law? The one where he asked you how your business was doing? And how much money it was making? And you had no idea.
By the time you got home to your wife, it was too late. She’d already heard from her parents about her choice in husbands. Let’s just say that her parents aren’t too impressed with you right now.
As you can see from the above scenarios, keeping your distance from accounting and finance can hold you back in business. And in life.
While creative freelancers aren’t generally known as numbers people, it’s important that we know enough about accounting and finance to stay in business, keep the taxing authorities happy, and earn the respect of our relatives. Especially our in-laws. They’ll really be impressed with our financial literacy.
To help you get up to speed on the numbers that your business is generating, I wrote Finance for Freelancers. It’s the latest book from Envato’s Rockable Press, which is releasing shortly. My goal is to make finance and accounting concepts fun and friendly.
Freelancers face more competition than ever. Competition doesn’t just come from other freelancers, but also from a slew of D-I-Y software and templates that allow people to produce their own websites, newsletters, publications, and logos. The result of this is that many clients view freelance services as just another commodity (the “Walmart effect”), which makes them think that the only difference between you and other alternatives is price.
Whether you’re prepared or not, the business landscape for independent work from web design to writing is vulnerable to commoditization. How you respond to these trends can impact how your business grows and attracts prospective clients. Will you be stuck working for rock-bottom prices? Or, will you be able to charge a fair freelance rate that reflects your expertise and experience?
Freelancers can differentiate themselves from the bargain-basement players by exploring four effective strategies.