When you started freelancing, you probably set your rates at what was competitive at the time. But you may not have even noticed the years rolling by, and suddenly your rates are below where they should be. It’s easy to correct that with brand new clients, but it can be difficult to approach a long-term, dependable client with a rate increase.

If you hesitate to broach the subject, recognize that as an independent worker, you have to be your own advocate. Rarely will a client tell you they think you’ve been charging too little. It’s up to you to make sure your rates remain competitive. Continue Reading

How you price your services makes a big difference in how your business is viewed by prospective clients. For freelancers, especially those just starting out, the tendency is to price work on the low end to generate client leads and interest. But what freelancers end up doing is attracting the cutthroat bargain hunters— not a sustainable client base to have in the long run.

Setting your rates low is a signal that shows you are indiscriminate in how you value yourself and your business.

Building your freelance brand starts with the price tag you put on your services. When you first begin working with clients, your rates send a message to prospective buyers: “This is what I’m worth.” If you price too low to undercut competition, you end up sending the message that you aren’t confident in your abilities, and that you’ll take any job at any price.

Setting your rates low is a signal that shows you are indiscriminate in how you value yourself and your business. Freelancers are independent professionals, as deserving to be taken seriously as any agency or corporation you compete with—it’s about time you start bolstering your professional brand by internalizing the belief that you have something invaluable and unique to offer. Continue Reading

Before I took the big entrepreneurial leap in 2010, I had always worked for a single employer. But you know how the story goes— suddenly the cubicle walls start to feel claustrophobic, the beck and call of the chain of bosses starts to grate, and you yearn for something, well, more inspired. You feel confident enough in your own skills and personal networks to leave the ‘system’ and start your own freelance business.

The highs are higher— exhilarating and thrilling; and the lows are steep drops, where you battle self-doubt and worry about scoring the next project.

When we first started, we worked out of my partner’s San Francisco apartment to save on overhead costs. My co-founder worked alongside with me. He had his corner. I had mine. Our breaks during the workday were lunch and pots of tea, and our meetings took place over walks to Golden Gate Park, just four blocks away.

While no one was there to observe our work patterns (like most internet-based businesses, our client interaction takes place over e-mail and Skype), we managed to stay fairly disciplined. One of the great perks of working for yourself is the freedom to set your own schedule. No one dictates that you have to clock in at a certain hour. No one’s looking over your shoulder.

Ah, the sweet freedom of being an un-tethered freelancer. But there are downsides, too. At a job you don’t worry about the next paycheck if you slouch a little one week. But on your own, if you don’t produce, you don’t get paid. Every moment for a freelancer is precious.

So once you make the leap, what’s the best way to structure your new work life as a freelancer? Know that by “going indie” you’ll need to prepare yourself for the emotional roller coaster of running your own shop. The highs are higher— exhilarating and thrilling; and the lows are steep drops, where you battle self-doubt and worry about scoring the next project.

While there are numerous and inventive ways to maximize your precious time and work more productively as a freelancer, you’ve got to first master the basics.

Here’s a starter kit of essential productivity tips to get you grounded and organized as you make the transition to the exciting and unpredictable life of a freelancer. Continue Reading

Credit: Suljo on Photodune

There is no one set strategy for setting your rates, which is why the process can be so confusing for freelancers. Basing your rates off regional competitors’ prices is a very smart tactic, but I think many freelancers forget about something important when putting together rates, and that is their value.

It seems that so many of us are quick to assign the highest price we could be making–but that’s not necessarily the most practical strategy. Why? If you have little experience and a non-brag-worthy portfolio, why should someone pay $100 an hour to hire you?

Instead of pricing yourself at a point that seasoned freelancers are getting, there’s nothing wrong with pricing yourself at a competitive wage that reflects your skill set. You can still make a good salary, plus you won’t be excluding the opportunity to build your skills and your portfolio. Continue Reading

Credit: SimpleFoto on Photodune

Are you getting paid what you’re worth as a freelancer?

You might think so, but it’s more likely that you — like many freelancers — are charging much less than what your clients are willing to pay. This is especially true if you do excellent work (and I’m guessing that you do).

The primary reason freelancers are undercharging is simple — we’re scared to do it. We worry that the work that we are doing isn’t good enough or that we aren’t experienced enough to charge more. We worry that if we raise our rates, then all of our clients will run away.

Fear is normal … but it should be ignored

It’s natural to have these fears and worries as a freelancer. After all, getting the next paying client is what keeps us in business. However, while having fear is fine, letting it hold you and your business back is not. To help you overcome freelancing fear and self-doubt — and grow your business — here are three strategies for overcoming fear and raising your rates.

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credit: stuartpilbrow on Flickr

A few months ago, I needed a designer to team up with on a project. I decided to work with a friend of a friend who had just graduated from art school and was desperately looking for work. She emailed me her rate and I about lost my mind.

She wanted $13 an hour — more than she’d ever earned at a job in her life — but she was willing to take less if I thought it was too high.

I’ve heard this story repeated time and time again, even from freelancers who have been in the game for a while. Most freelancers don’t have rates that painfully low, but odds are pretty good your rates are too low. Continue Reading

This post is an excerpt from my eBook, The Blog Business Funnel. It teaches freelancers how to run a profitable freelance business, fed entirely by a healthy and thriving blog. This excerpt is from Chapter 7: Scaling Up. FreelanceSwitch readers can claim a special discount at the end of this post.

One of the nicest things about freelancing is that you decide when to give yourself a raise. If you feel like you’re doing a great job, developing experience and becoming hotter property, you don’t need to wait for your boss to notice. You can give yourself a raise, and if your clients agree with your assessment, you’ll get it.

As a freelancer, you can give yourself a raise by increasing your hourly or per-project rates. This part is simple, but setting up the right preconditions for the change is a trickier process. How can you raise your rates while making sure you still get plenty of work?

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What would happen if tomorrow I forced you to double your rate?

If you bill hourly, your rate just doubled. If you bid by the project, you have to bid twice as much as usual. If you sell a product on the side (WordPress theme?), you have to double its price too.

For the sake of exploration, let’s ignore the understandable backlash from existing customers. Instead, let’s focus on the more interesting question:

What would you have to do to justify the rate?

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Lately, I’ve been exploring various “commodity” freelance job boards where one bids for projects. In perusing a number of sites where only experienced web developers and graphic designers are competing against each other, one thing stands out vividly: every buyer/job source has set their price not only low, but outrageously out in left field low.

Another stark fact is that the relationship between client and designer is flipped: the client dictates a cost and the designer does the work for that price (or lower).

Yet, there are always bidders. Lots of bidders with low-ball ($90 for a Joomla! site done in one week) impossible bids. And I sit scratching my head trying to figure out how this commoditization of a skill set and art form has happened.

There seems to be a basic disconnect between what is needed to earn a living as a freelancer and what clients seem to want (at least on these outsourcing sites) to pay. The disconnect goes even deeper. Suddenly a client can define all aspects of a job from price to design, causing the designer’s role to change from that of a professional to that of a technician. It is unnerving.

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When I’m shopping for something, discounts can play a big role in what I wind up purchasing. Whether I’m looking for a host for my website or a graphic designer to put that website together, I’m more likely to choose an option that offers me a discounted price. I’m not the only one who makes purchasing decisions that way, either: depending on your clientele, you’re likely to pick up at least a few new clients with a discount.

Discounts and sales offer motivation for potential customers to buy now: if they want to take advantage of the deal, it’s necessary to act immediately. You can also use discounts to motivate your customers to do all sorts of things, like pay early or try out new services that you’re offering. The right discount can help bring in more money from new projects, if you take a long-term view.

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Photo by Endlisnis.

Recently a client of mine tried to low-ball me. She knew our standard rate for the project in mind, but asked if I would consider going lower–of course, just this once.

And I’m sure I’m not the only freelancer that this has happened to. After all, our global economy isn’t so hot. Some people are trying to get something for nothing, while others are honestly having a tough time. As a freelancer trying to keep business afloat, where does that leave you? Is there a way to deal with a prospect or an existing client who wants a discount, or an unreasonably low price? Is it better to do a one-time job on the cheap rather than “spoil” an existing client relationship?

Here are some points to keep in mind when a client asks if you can “go a little lower.” Hopefully they’ll help you assess whether or not you want to reduce your rates, and if so, what the future ramifications of that could be.

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As a freelancer, the most important part of your day can be spent sending out invoices. While you might run across a client or two who is happy to send you payment as soon as he receives a finished product, most will wait for your invoice: no invoice, no money. That means invoicing is just something you do. It’s necessary — but it’s also a system you can improve on. Taking a look at some best practices for invoicing can help you tighten up your own system. You can get the money you’re owed without taking too much time away from your income-producing work. Continue Reading