At some point, most freelancers worked for someone else. For most, punching a clock and getting a pay cheque is fine, but for creative professionals, it can feel unnecessarily restrictive.
Taking the leap into self-employment is a brave one, but not uncommon amongst designers, developers, copywriters and other professional creatives. Assuming you survive the first year or two, and then many get to the point where you start to consider how well, or not, you are doing financially?
A freelancer’s business model is pretty simple. Sell time - and the work/skills you supply the market - for money. Generally speaking, high-demand, low supply freelancers with specialist skills (such as web developers) can command higher hourly and day rates. Those with more experience can also charge more.
Since time is money, it can be tempting to either charge too little, but work long hours. Or charge high and work fewer hours, if you can. It's about getting the right balance.
That’s the freelancer’s dilemma. The time trap.
Further complicated by the need to keep money coming in, which can mean taking lower paying gigs just for the cash. No one wants, or should want to work ridiculous hours or accept consistently low rates out of necessity. It happens, sometimes, but it's far from ideal.
The problem is when that happens too often it can be demoralising. Why keep fighting for clients, for a sense of freedom that you never have the time to experience?
There is a solution to the freelancer’s dilemma.
Time & Money
Firstly, no matter how demoralised you feel, let’s work on the assumption that if you’ve survived this long, things are far from hopeless. Now is not the time to hit the internet to look for a job.
Secondly, work through this checklist - which may take a while, depending how much data you already have about the reality of your freelance career:
Do you know your real hourly rate?
Consistently tracking time may be new to you. Don’t worry, with Solo you can collect all the data you need to get a handle on this important metric. See your actual hourly rate (project budget vs. time), and get an idea when and where you should be charging more.
Do you know what you need to earn?
Want and need are two different things. Want includes treats, holidays, trips away - much needed time with loved ones, family and friends. These things can come as standard in most nine to five jobs but can fall by the wayside when you're on your own. Try not to treat yourself like an indentured servant, when possible take time off to refresh.
Need is to ensure you have food, the mortgage or rent paid, bills covered and a little extra on top. Keeping an accurate account of your profitability, expenses and turnover will give you the insight to know when you can down tools and recharge those batteries. The aim is live a more fulfilling life with a good work life balance. As a freelancer, this can be hard to achieve, but it's not impossible.
Set a revenue target
Decide what you want (plus enough set aside for taxes): then divide by a monthly, then hourly amount, over the course of 48 working weeks. Thereby giving yourself 12 months of work, with time off in the Summer and over Christmas.
Now you have a revenue target.
This should give you a minimum hourly breakdown, therefore, something you can use to work out whether you are charging the right amount for the majority of your clients, whether you work on a retainer, project, daily or hourly pricing model.
Next, take a look at your revenue pipeline. There are four main sections to this pipeline:
• Current clients: Upsell opportunities • Referrals • Channel partners • New direct leads
In our next article, I will walk you through how to maximise each sales channel to give you the income you want.
This blog post is brought to you by the creators of Solo; your freelance wingman. If you'd like to contribute to the blog, contact us on hello[at]wearethrive.com.