Become Freelance

1. Charge by Project, Not by the Hour:  This system will benefit both you and the client. While it is imperative that you list your hourly rate for clients to see your value, in most circumstances you will not charge by the hour.  This is the case for most service providers.  Photographers charge a package price for a wedding.  Graphic designers, writers, illustrators and many consultants charge a project fee for an assignment.  Even specialty services – from welders to computer IT tech guys – often charge a flat rate for a job.  There will be exceptions to this, of course.

If you can accurately estimate how long it will take you to complete a job and you do it in less time, you have made a greater profit.
The client will not mind because they have already agreed to and budgeted for an agreed amount.  It benefits both of you, as long as there are no major changes or surprises involved.

2. Estimate Accurately:  Know with certainty how long it takes you to perform a job.  As a Freelancer, your time is money.

Every minute is worth a dollar amount to a Freelancer.
If you underbid on assignments that take a long time to do, you are cheating yourself of required income to make ends meet.  Underbidding by a little bit is okay to build leverage, but I see many Freelancers who try to grossly undercut the competition.  This strategy often fails, as clients see those low bids and think, “Wow I wonder what’s wrong with this figure?  This Freelancer must be very inexperienced to have bid $200 dollars less than everyone else.”  You may be just as good, if not better than the Freelancer who wins the bid.  Undercutting too much will fail miserably and you will be stuck wasting time doing jobs that don’t pay well.

3. Raise Rates Gradually: If you’re the new kid on the block, you may not be able to command top dollar quite yet.  That is, unless you have already established your name at a highly-respected company and people within the industry know who you are.  If you’re just breaking out, you will have to start at a modest rate and work your way up over time.  The good news is – if you’re good at what you do then it will not take that long to develop a name for yourself.  I have seen many talented people who have branded themselves in the Freelance world in only a few months to a year’s time.  The best way to raise rates is to do it without affecting existing customers.  It may be a little tricky to juggle the $30/hr client versus the $100/hr client.  But, they don’t know each other and as long as each client continues to be happy with your services, then that’s all that matters.  You can slowly raise rates with old clients, but you may lose them.  There may be a time when it comes to that point. 

Never burn any bridges with clients because they will also be your source of referrals and repeat business.

4. Measure Value Over Time: Make your time justifiable to a client.  There is a reason why a PR professional makes more than a blogger.  The PR person has the experience, talent and proven skills to bring a client more business, while the blogger is simply another article writer among thousands (often from countries with cheap labor and a weak dollar).  The PR pro is worth more.  Justify your credentials, proven track record and skills with your clients in order to validate your higher rate.

Your talent is a value to your client.

5. Don’t Give Too Much Away:  Ow.  This comes back to bite you right where it hurts, either by wasting precious time (which is worth money) or by affecting your pocketbook.  While it does take some time to market yourself, bid on projects and attend to the day-to-day functions of running a business, you should always -

• Focus most of your efforts on billable time.

6. Say No to Cheap Clients:  It may be tempting when you’re inexperienced to take on every client that comes along.  People will ask about your services, but that doesn’t mean they will be an ideal client for you.  Sometimes it’s better to let go of a relationship that is not beneficial to both parties.  Or at least YOUR party.

If you have a client that is always trying to beat you down on price or make you work many hours for low rates – ditch them!
Politely.  It will free up time to work with a client who is better suited for your ability.  Let some other Freelancer deal with the wrath of the cheapskate who wants you to put in all kinds of free time without proper remuneration. 

7. Collect a Retainer:  Some Freelancers gasp when I tell them I require half up front.  Yet, very rarely have I had a client complain with this arrangement.  There are many reasons why you should do this – the first being cash flow (which we will talk about in a later section).  The second is to avoid deadbeat clients.  The third is so that both client and Freelancer will take the assignment seriously.  Offer your client a project agreement to sign if they feel uncomfortable sending you money in advance.  Most customers will not mind.

This has been a good idea for my business on several occasions.  Once I had a customer who hired me to completely redo his website at a rate of $880.  I collected $440 up front. After completing about 80% of the job, I sent it to the client for approval.  I didn’t hear from him again because he scratched the business idea and never used the work I had created.  He placed the job on ‘eternal hold’ (much like calling your financial institution).  Had I not collected a retainer, I would have wasted all of those hours without payment.  Although I didn’t collect the full amount in the end, at least I got something for my efforts.

Collecting something is better than nothing when a customer skips town.

8. Markup Extras:  It is to be expected in the Freelance industry that when a client asks you to do a service and you need certain materials to do the task, you should mark up the items you need. These are tangible items that will take time for you to order.

Never bill a client at your wholesale cost for supplies, materials, etc.

Examples of tangible services:  printing services (brochures, business cards, etc.); or materials needed to create something (photo albums, construction supplies, special tools, etc.); and the like.  A caterer marks up the cost of food.  A dress maker adds a percentage to the fabric of the garments. You get the drift.  It takes time to go get these items or to order them online.  Remember your time is valuable!  If you are just starting out and don’t want to take on the extra risk, then ask the vendor to bill your client directly.

9. Keep Time Sheets:  Keeping accurate time records is directly linked to how much you make.  Especially when working with billable hours.  Even if you are billing on a project basis, keep track.  Why?  It will be a gauge for future estimates and completion times, from the communication to actual time spent working on the job.

• Know precisely how long it takes to perform an assignment so your rates stay consistent, current and close to the mark.

Plus if there is ever to be a reasonable doubt with a customer who questions the hours spent, you will be prepared with evidence of how hard you’ve worked.

10. Pad Your Quote to Include the Unforeseeable:  When you finish a quote for an assignment, add two or three hours to the total.  You will need extra time to edit your own work or fine-tune your assignment.  Many Freelancers forget to do it and unknowingly work a lot of free hours to complete jobs, all because they have underestimated the time.  Particularly, when working on huge projects.

Remember – You can’t go back and ask clients for more money once the deal’s been made, unless they ask for more services beyond the agreement.

TIP: It’s better to have a HANDFUL of great higher paying assignments than to have MANY lower paying assignments.  First of all, you’ll be stretching yourself too thin without enjoying your work. That’s a fast track to burnout.  Secondly, your clients will ultimately suffer because you will hurry through projects just to finish as fast as possible.  Go for bigger jobs, rather than small ones if you are qualified to do so.