Did you know more than 57 million Americans are freelancers? That’s around 30% of the American workforce.
I myself was freelancing for nearly 10 years before starting my S Corp, and I’ve experienced firsthand the ups and downs that come with taking on clients, managing the workload, pricing your services and so much more.
As a first-time freelancer, it can be confusing and frustrating navigating the process alone, which is why the past ten years have been full of important lessons. Learn from my experiences to become a more effective and lucrative freelancer.
1. Increase your prices every year
Every year you gain experience, which makes your work more valuable. As such, every year you should increase your rates to ensure they’re aligned with your experience and the value you provide to the client. It can be hard to set prices, especially if it’s your first time doing so.
While there are many theories on how to price your services, I’ve found the best method for me is to combine both a time and value-based approach.
When pricing a client, I consider the time it will take to complete the work itself and then add a buffer to account for the extra time that I’ll spend outside the scope of the project. For example, this might include time spent communication (email or phone), on extra research needed, or edits and updates based on client feedback.
Finally, I consider the overall value this project will provide to the client and what I provide as a contractor or freelancer. For example, creating SEO-optimizing content, if done correctly, will provide value to the client long after I’m gone.
I’m also more than just a writer, I’m a strategist and marketer, so I provide more than the written work— I am able to share feedback and consult as needed as well.
While this isn’t a concrete pricing process, I want to give you an idea for how you can play with pricing to represent both immediate work done and the overall value of what you offer. Check out reports like this one from Clockify to get a sense of what hourly rates are typical in your industry as a baseline.
2. Stay firm to your rates
Once you have your pricing set, stay firm to your rates. This is hard to do because you never want to turn away work. However, when you take on projects that fall below your rates, you run the risk of:
- Having no time for a project that you actually like and that pays the correct rates.
- Resenting the client and the work because you’re not getting paid what you should.
- Setting a precedent with potential on-going clients that you’re willing to work for lower rates.
I’ve found that when I turn down projects that aren’t worth my time, another one comes through that is worth my time. Say no and trust that by doing so, you’re making room for something better. I love this article from Fast Company about when you should say “no” to a client.
3. Look for ways to save
There are so many ways to save money as a freelancer. This is important to consider because, by working for yourself, you take on the burden of extra business expenses, like software purchases, equipment, and taxes. Here are some ways to save.
Deductions are your best way to save at tax time. Keep an organized account of all your business expenses throughout the year, preferably using a tool like Quickbooks so you can categorize them.
Come tax season, you’ll be able to use these to reduce your total taxable income. Don’t forget about deductions like health insurance, which can lead to significant savings.
Not all self-employed Americans realize it, but health, dental, and qualifying long-term care insurance premiums are tax-deductible business expenses.Self Employed? How to Save Money on Health Insurance.
Don’t buy a printer. Instead, go the paperless route, signing contracts on your computer via Adobe or an online program. You can also avoid trips to the bank (gas costs) by requiring all clients to pay online, through a bookkeeping system, Venmo or Paypal.
Always opt for free, rather than paid, if you can. With so many options available, it’s easy to find a product that fits your needs without charging a high monthly fee. If you can’t avoid paying, take advantage of free trials. If this isn’t listed as an option, reach out to ask for one—in many cases, they’ll let you try the tool for a short period of time anyway.
4. Bring on financial experts
One of the best lessons you can learn as an entrepreneur is that some things you can figure out yourself; how to design a blog post or set up your Instagram account, but other things you should rely on the expertise of others.
When it comes to finances, the latter is the case.
Work with a certified personal accountant (CPA) to do your taxes and manage income and quarterly tax payments throughout the year. You can also hire a bookkeeper to manage invoicing, deductions and paperwork like W-9’s.
While these may seem like unnecessary expenses, a qualified financial expert can free up your time and help you avoid costly mistakes.
5. Diversify your client load
Until about six months ago, one client made up almost a third of my monthly revenue — when they left, I lost a lot of recurring monthly revenue.
It can be nice to have clients like this, but what happens when those clients decide to shift their marketing spend, cut back on freelance support, or take your projects in an entirely different direction? You end up with a gaping hole in your revenue stream that you have to scramble to fill.
Relying on one client, or even one type of client, is inherently dangerous. Instead, diversify, by taking on clients big and small so you can ensure consistent revenue each month.
6. Get face to face
Networking can be scary and time-consuming. However, as a freelancer, it’s critical to your sanity and can be invaluable over the long-term. Networking provides you with a chance to learn from people, drive referrals and connect with potential clients. Instead of avoiding networking altogether, use these tips to make the most of it:
- Identify 1 to 2 events each month that get you in front of your target audience or in a room with others who do the same work as you.
- Find recurring monthly or quarterly events that you love, allowing you to build a community that you can rely on as your freelance business grows.
Don’t forget to network online with Facebook and LinkedIn communities. You can also build a community and drive clients with Twitter chats. Check out these Twitter Chats to give it a try.
7. Make communication a priority
Communicate with your clients above all else. I have a 24-hour response policy with my clients. If they email me, I will get back in touch with them within 24 hours of receiving the email, if not sooner. This is all about building trust and showing that you prioritize clients’ needs — within reason.
With that being said, it’s important to set boundaries. I don’t respond to emails on the weekends or late into the evening, unless it’s necessary or there is an emergency. This helps you avoid burnout, which ultimately allows you to do better work for the client.
8. Focus on your website
It’s easy to get caught up in social media and forget about your website. But what happens if there’s a crash and social media is your only source of leads? All of a sudden you’re scrambling to bring in work.
Don’t let this happen and instead prioritize maintaining your website and most importantly, creating and optimizing content for SEO. For example, consistently publishing blog posts that are SEO-optimized allows you to target multiple keywords — potential client search queries — so you can consistently drive traffic and leads.
Learn from my freelancing lessons
Whether you’re a seasoned freelancer or new to the gig economy, there’s always something to learn. Use these insights to save time and money, price your services well, and keep clients coming through your door.