Freelance writing can be a lucrative career path, with many of the top content developers building entrepreneurial empires that provide the very best in outsourcing support. Many new writers and designers are quick to follow suit, jumping into the arena with high hopes of enjoying the “easy life” as their own boss, digging into the seemingly endless list of available projects to write at their leisure while they excitedly watch the dollars roll in.
Yet somehow, after several months of focused effort, many freelancers still find their bank accounts coming up short. Why is that? There are many factors that may play a part in both short and long term financial obstacles, with most having something to do with one fundamental concept that sets the stage for any and every small business owner. All entrepreneurs, freelancers included, must understand how to charge what they’re worth in the marketplace.
It’s imperative that content providers do their homework and intimately understand the ins and outs of how to calculate competitive rates that attract new clients while also developing a business that carries a strong bottom line. Take these few tips into consideration and you’ll be well on your way to discovering how to charge what you’re worth as a freelancer.
Do Your Research
How much do you really know about your marketplace and your content niche? Have you defined your ideal client? Do you know where they find their outsourcing agents and what they’re comfortable paying for high quality work? Who are your biggest competitors?
You must spend time uncovering the purchasing habits of your prospective clients and also the selling habits of your competitors. It’s important to note that this is not a “one and done” strategy. Business is constantly evolving and a well-balanced entrepreneur will regularly review the marketplace to identify what has changed, explore new opportunities and honestly consider what needs to be altered in their business model. The “going rate” is just that…it keeps going. It is not the “now and forever, stop here rate.” You should hit the internet running at least twice a year, ideally quarterly, to report on what your competitors are charging, what the overall demand for your niche is, and where you need to dig in to get ahead. Have you ever done a SWOT analysis? This is a great way to develop a habit of checking in with yourself and your business.
Not only does proper research ensure you are pricing yourself properly to play the game with your competition, but you also make sure you are not pigeonholing your growth by undercharging for your services. Yes, generous rates may be a first step to entering the market and attracting new clients, but it is a short term strategy that needs to have a deadline. Your time and talent are valuable, and you deserve to be compensated as such. If you’re not charging what you’re worth as a freelancer, you will swiftly find yourself struggling to make ends meet, frustration mounting as the sparkle of being your own boss rapidly dissipates.
Many content developers make the mistake of interpreting the word “freelancer” as an opportunity to just float around in business without any process or procedures in place. This is a slippery slope into the red. Careful reporting is keystone for the long-term successful entrepreneur. While new business owners may not have the working capital handy to implement top level software or financial representation, there are three areas that every freelancer can, and should, track, even if it’s with a simple Excel spreadsheet.
- Billable Hours: How long are you spending on a project? Are you consistently undercharging your clients, improperly estimating the time required to complete a task? Charging what you’re worth as a freelancer is directly proportionate to your hourly rate and how labor intensive your projects are. Track time spent at 15 minute intervals to properly review your service offerings.
- Open Invoices: Many freelancers issue invoice requests to their clients and then forget to track incoming payments. Not only does this improperly track profitability, but a busy freelancer can even make the mistake of not collecting on services rendered. Clients are busy, that’s why they hired you! It is the responsibility of the business owner to make sure clients pay in a timely manner, circling back around with reminders about those invoices that may have inadvertently fallen through the cracks.
- Operating Expenses: Do you know how much it costs to run your business? Apart from the aforementioned billable hours, what are the regularly occurring business expenses and overhead that contribute to your profitability (or lack thereof)? Carefully track any outgoing money, bills or debt related to your business – materials, utilities, Wi-Fi, software, electronics, licenses etc. – EVERYTHING! Knowing what you are spending and the cash going out may be even more important than reporting on the cash you are bringing in!
If you discover any of these three areas are falling short of profitability, it’s time to make some changes and fast! Charging what you’re worth as a freelancer is intimately woven into your understanding of the details of your business, cash in, cash out. If you discover your cash going out exceeds the cash coming in, it’s time to extend that cost to your clients and increase your prices.
Believe Your Elevator Pitch
Yes, you are a writer. Or a designer. Or a graphic artist. But when you enter the freelancing arena, you take on another job description. Salesman. That’s right! You are in charge of your destiny as an entrepreneur. You have to hit the pavement, pitch the sale and close on the deal to bring in new customers and develop the trust required for them to hand over their sensitive work.
Confidence truly is key for the successful content developer. A freelancer who does not believe in their strengths and skills more often than not undercharges for their work or fails to make the sale at all. Develop an elevator pitch that identifies your unique talents and charges accordingly for your creative insights. Practice your sales strategy and work through the hesitation and anxiety that often comes as a newbie salesperson. Get comfortable with client negotiations and hold firm on your prices. You must believe that you’re worth it!
Are you ready to charge what you’re worth as a freelancer? If not, it may be time to pause your entry into the marketplace as an entrepreneur. Consider engaging an agency that will set fair prices on your behalf until you’re ready to confidently step out on your own and develop a business model that is both competitive and profitable. Life as a small business owner is a marathon, not a race! Entering the market before you are ready can spell disaster. Taking the time to properly implement the systems, processes and budget to track your professional finances is the best and most important step to a long career as a successful freelancer.