Ahh, the wonderful world of freelance. You can be contracted, be selective in regards to clientele, and the independence can be rewarding.
Of course with the positives, come the negatives, especially when it comes to making it make sense (and cents). There are many questions that you must ask yourself, whether you're just breaking into freelance or are a bit more "seasoned." How many hours do you want to work weekly? Daily? What is your desired annual income? With this income, how do you intend on being paid - by the hour, daily, weekly, monthly, or per project? This is where it gets a tad bit more difficult. Doable, but difficult.
Here are five actionable tips on how to evaluate your worth, determine your rate, as well as how to conduct profitable client negotiations.
Your network determines your net worth.
This statement holds true in a variety of situations, but especially when it comes to being a freelance worker. No matter the field, you ultimately have the power to choose what type of clientele you work with, essentially yielding more or less income. If you work with businesses and individuals with lower budgets, you can certainly expect lower pay than those with increased ones. It's perfectly okay (and acceptable) to be selective. Charge based off of your worth. This is when you have to ask what type of product do you deliver? You can't expect that millionaire lifestyle based off of mediocre work.
Your work should speak for itself and your rate.
Calculate your rate.
This is a subject that comes to mind often, especially when first starting out. The downside to this is, the answer varies on an individual basis and under varied circumstances. How many projects do you want to take on? How much time do you want to spend working? Will this result in your desired annual income? Double Your Freelancing provides much-needed insight. This is actually a wonderful and user-friendly way to assist with your financial goals. With their calculator, you're able to determine how much to charge to reach your goals. You'll be able to assess what and how to charge.
Effectively negotiate clientele budgets.
You've taken the steps to efficiently run your freelancing business; however, the reality is, every client is different (as are their budgets). Many freelancers base their pricing on what others are charging. This can work for so long and at what cost? Many freelancers miss the big picture. It is imperative to understand how your work or service can fit into a client's budget. Having an open dialogue, yet providing solutions backed by critical thinking on how to be an investment to your client is vital. This can ultimately bring them more success and more projects for you.
Invoices save lives, time, and money.
With clientele comes money, and that's one thing that you always want to have figured out and organized. This is why invoices are critical in the freelance world. They provide documentation not only for you, but for your clients. They show what is owed. They tell the freelancer everything from payments made, non-payments, and can prove to be quite useful during tax time. Each invoice should be numbered to prevent error and confusion between clients. Be sure to keep a copy of every invoice for your records. Not sure how to create an invoice of your own? Microsoft Office comes with templates built in its software. Sites like Invoice Home and Freshbooks offer an array of free template designs as well.
Tax time, a confusing time?
Taxes can be confusing for many freelancers, but I encourage you to do your research. This will save you a lot of time and money in the end. While you may not think you should pay taxes, more often than not, you are not exempt. For many freelancers, you have to pay self-employment taxes in addition to income taxes, depending on the money earned annually. Make sure you're aware of what type of return to file, forms you'll need from clients, and keep a good record of all business expenses. Good recordkeeping is key to being a successful freelancer.
One last and very important thing to remember when working as a freelancer: contracts are your friends.