Getting Paid: 6 Standards to Set for Your Freelance Business
Credit: stevendepolo@Flickr
One of the joys of having your own business is that you get to set the standards. And if you’re interested in getting paid, I’d advise you to start setting them as soon as possible.
Why? Because there are a lot of people who are constantly thinking of new ways to take advantage of freelancers. Here are six recommended standards for your freelance business:
- Speculative work. Requests for you to do speculative projects seem to be as old as freelancing itself. Simply put, this is being asked to work for free in hopes of landing paying work down the road. Unfortunately, that paying work seldom materializes. So, it’s best to avoid falling into the spec work trap in the first place. Learn how at the NO!SPEC website.
- Pro bono work. While there are plenty of noble causes that are in need of your time and money, be careful about the amount of pro bono work that you do. After all, you do have bills to pay, even if you’re a very frugal freelancer. And you can’t pay them with the photographic work you just donated to the ABC Foundation. So, next time you’re asked to be the ABC Foundation’s volunteer photographer, why not make referrals to paying clients part of the deal?
- Get money up front! More than a few of us have learned that promises to pay for a completed project are just that – promises. And you can’t pay your bills with promises. So, don’t get burned. Get a 50% deposit up front, then start. The exception to this rule applies when a) you’re working with an established client who you can trust to pay in full when the job is done, and b) the job doesn’t drag on for months.
- There’s a good reason for overtime pay. Ever had one of those jobs that ate your evenings and weekends? And, when it ended, did you feel like it devoured you too? That’s what overtime pay is for. If the job is a big rush that needs to be done by Monday – and it’s Friday afternoon – double or triple your usual rate. If nothing else, it will get your clients thinking about better time management.
- No, I don’t get paid when you get paid. Pay me now. This one seems to happen to freelancers who take subcontract work from advertising agencies. They do it super-fast, their contact at the agency is delighted, and then they wait for a whole year before the client gets around to paying the agency. Sound like a scenario worth avoiding? Add this verbiage to your subcontracting agreements: “Client’s obligation to pay [name of your business] when payments are due is independent of Client receiving payment from the Client’s Customer.”
- Define the jobs you won’t take. Are there businesses and industries so abhorrent that you refuse to work with them? You may decide that doing work for entities involved in gambling, pornography, or tobacco don’t square with your values. If that’s the case, then make it your business policy.
The point of setting freelancing business standards isn’t to put you back in that straightjacket that confined you during your employment days. It’s to make your business easier and more fun. So, what are you doing to set some standards around your place?
Photo credit: stevendepolo@Flickr
Great article! It’s up to freelancers to set their standards high and show clients and prospects that we won’t be taken advantage of – and you definitely will if you don’t put things like payment terms, rates, etc. in writing.
“Client’s obligation to pay [name of your business] when payments are due is independent of Client receiving payment from the Client’s Customer.”
I needed this so badly recently
Great article
This was a killer tip for me too. I am going to work it into my contract right away!
I’ve had to wait several months for payment from a client that will remain nameless – a frustrating situation for sure. This is a golden clause that will ensure payment is timely. Thanks!
Good article, but have to pick up one point:
“The exception to this rule applies when a) you’re working with an established client who you can trust to pay in full when the job is done”
If you are working with an established client who has paid per your terms in the past, why suddenly let them pay everything at the end of a project? If they are an established client of yours, they’ll understand your payment terms, will have followed your payment terms and therefore should continue to abide by them. Plus even the ‘best’ established client could go out of business one day.
Sorry, but trust doesn’t pay the bills.
Tim,
I completely agree with you. It does seem a bit ridiculous to change your terms after everything has been going so well, but I can see a glimpse of a point. Many medium-sized businesses will take a credit card the first time and then establish a line of credit for you. It is almost like a customer reward or a customer perk perhaps.
Everyone likes to hold on to their money for a little longer, which is why there is such a big fuss over net 30 and net 45 days. I know this is true when there are large sums of money involved, but with most freelancers, the interest saved or lost between 15 days will not be significant, thus making me wonder why we, as freelancers, wouldn’t want to continue to keep getting money in a quickly as possible.
Like you said, trust doesn’t pay the bills
I also agree! I work very closely and repetitively with a small group of clients and I know they all understand my terms. In fact, I’ve never had a problem with a client not paying, or delaying a payment (pretty lucky, I guess!)
If a client were ever to request a change in my terms, my first reaction would be suspicion mainly because as you said, “even the ‘best’ established client could go out of business one day.”
However, depending on the request, I would likely choose to comply. A client’s past history needs to be considered, especially if they have a perfect track record over the period of several years.
Also, where your client came from may help you determine if you should change your terms. Did they come from a freelance jobs site? Were they a referral from one of your most trusted clients? Etc.
Great article by the way! I’ve been considering charging an increased rate after hours/on weekends as well, but I’m not sure if this would upset current clients. As time goes on, I’m finding that if I don’t set rigid working hours, some clients tend to take advantage of my availability. And I’m definitely happiest when I have some free time to brew up a new batch of beer or go golfing.
Speaking of….I think I’ll take off a bit early today and brew up a batch of Toasted Coconut Porter
Cheers!
These are some good suggestions. Another item to add to the list might be to decide what your project minimum should be. I don’t mind doing small jobs, but I have found that *really* small jobs aren’t profitable for me. So, it’s a good idea to turn down jobs that don’t meet your minimum. Also, by turning down small jobs, you’ll find that your focus will switch to getting bigger jobs.
Excellent.
Completely agree.
I found myself so many times in point 5, is an incredibly irritating situation.
Martha,
There is a lot of useful information in this post, especially the clause for payment. I have had projects that drug on for months because the client was waiting for the client’s customer to pay. It is no fun, but what should we do if we still don’t get the money? What are the best and most cost-effective solutions for this situation? Should we try to fight it or just let it go?
What do you think?
I think this is a great article for the freelancer that is just starting out. It really amazes me how many people have no idea what the basic structures for payment are. But then again I suppose it is understandable for people who are used to getting a paycheck.
Keep up the great work!
~ KFD ~
I love items no. 5 & 6. I’ve recently encountered those and I said NO without thinking twice. I guess, I should have stated that clearly in my profile so I will have to fix it this weekend. You give sound advice here and I hope that newbies will pass by and read this post so they can stop ranting at forums all over that they’ve been duped. Thanks!
Yip – what a great articles.
I must say I agree 100% with the ponts above.
It’s nice to have them reinforced again.
It’s fascinating that SPEC work is aas old as freelancing and yet, many are still becoming victims of this type of scam. Imagine if the client asked 3 samples form say, 20 candidates.. that means getting 60 samples without paying anybody a cent. Think about it. I guess, it’s all about setting boundaries that defines a successful freelancer from a wannabe. Thanks for the post though, very useful!
I absolutely ADORE #5, “No, I don’t get paid when you get paid.” Thank you so much for that! I work with clients in the Arts and Entertainment industries and they are infamous for that line. As a matter of fact, I’m waiting on payment right now, because of it. I am definitely going to add that line into my agreements from now on. Great article, Martha, and THANK YOU!
Martha – this is a great article! Very practical with some great information. I like what you said: “And if you’re interested in getting paid, I’d advise you to start setting them as soon as possible.” – makes sense! What better time to set up these standards than now?
Thanks for sharing; I plan on implementing these standards into my business!
i disagree on the deposit clause. i used to refer to it as a deposit as well, and sometimes i slip and continue to, but for me it is in fact a retainer. whether the project cost is split into halves or thirds, i make it very clear that the initial payment is a retainer, which makes it non-refundable.
there is a sentiment amongst the populace that says nothing is permanent and things can be returned or reversed. not happy? take it back. clearly stating up front that your initial payment is mine no matter what ensures client follow-through on the project. we’ve now shifted the thought from, “i can take it back,” to “i need to get my money’s worth.” and as long as you have a clearly defined scope of work, there are no issues with scope creep.
i have also added into my contract in the payment clause that i only accept certified funds or electronic transfers. of course cash always works too, but keep that check to yourself. if they question it, i simply state that i don’t begin work when you hand me the payment, i begin when it completes deposit. therefore, using certified funds the money hits the account faster and i start work sooner.
Good points on the choice for “retainer” versus “deposit”. I’ve been thinking of that 50% up front money as a deposit, and am running into clients who will leave me hanging (the project is discussed but I’m waiting for text or photos or…), and many of these projects have been left for months or even years! I’ve been worried about these people coming back for their money, but if I had it in my contract that it’s a retainer, then after a certain point they shouldn’t have a right to it… right?
Any chance you could share that part in your contract that states it’s yours no matter what so I know what to work into mine?
Excellent list – I’d add “don’t take work you know you’ll hate doing.” You might even get paid, but you probably won’t get a reference, and if you do it will be to more work you hate… so don’t do it.
Actually I have an established corporate client I trust and takes them like 1-2 months, to get payments ready for the maintenance work I do for them.
They askrf me nicely about this and since the pay is good, I really don’t mind.
Thanks for the article. I’m thinking about switching to freelancing at some point in the near future and having good pointers will make that easier.
But for me, reading your article makes me certain that I really need to polish my negotiating skills. I imagine that getting most of these things realized is quite a feat for someone who is just starting out.
To deal with the people who can’t seem to get their content together and wrap up their project, I recently added a line to my contract something to the extent of:
“If client fails to respond to any request from [company] within 30 days, the final balance of the project is due, regardless of project status”
I had several website projects that drug out way beyond their completion date due to client’s slowness in completing their part even though I had done 99% of my work.
That’s a great addition. I’ve considered doing something similar as both time and experience have shown that past 30 days, it gets increasingly difficult to collect on what you’re owed.
That is brilliant. I think I’ll add that to my Agreement. Thanks for that.
This is a great list, with some great advice. I personally really like the 50% rule. We always make sure there is a deposit before any of the work starts.
Excellent post.
Thanks for putting all this together. It would be great for us to remind ourselves on this post from time to time and stop repeating some mistakes
Great article. I’ve some great clients some who pay within a week but then there are always the ones that need chasing even a few months later.
I recently updated my payment terms and am happy that I placed some of the standards mentioned in your article in it. Being a freelancer with 100% international clients, it’s really important that my payment terms are clear and met to avoid getting stiffed or waiting for an eternity to get paid.
Ooh thanks for sharing that bit of legal-speak in #5, I’ve been needing that
Excellent post, thank you. Pretty much everyone agrees with the tip “I don’t get paid when you get paid”. It was a very useful tip, and hopefully you will continue to post similar suggestions.
How does everyone handle #4 (If the job is a big rush that needs to be done by Monday – and it’s Friday afternoon – double or triple your usual rate.)? Many of my clients are repeat customers and they’re usually the ones who expect something yesterday. How do I suddenly tell them it’s going to cost them double???