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In this course, author and seasoned freelancer Tom Geller shows you how to prepare for a transition to freelancing. Begin by taking a look at your career goals, the systems that will support you, and proper ways to plan for success. Find out how to marshal your resources, refine your portfolio for presentation to clients, and estimate your costs to avoid any surprises on the financial front. Plus, discover how to create invoices, manage your books and taxes, expand your client base with marketing, and grow your business.
A bonus chapter covers common questions freelancers have when entering the field.
There are only so many hours that one person can work every week. So, once those hours are spoken for, the only way you can increase the financial yield on your time is by raising your rate. To explore ways to do so, let's revisit the psychology of how people buy freelancer services. As mentioned earlier in this course, buyers have to justify your price by measuring it against other considerations. They ask themselves, "What's the overall value of doing this project?" "Can I do it myself, if so, with what costs and risks?" "What are the costs and risks of assigning it out?" And finally, "To whom can I assign it to keep the costs and risks at their lowest?" It then comes down to a cost benefit analysis for the buyer.
The values are pretty subjective and not always easy to measure. You can sway some of the points your way, but not all of them. Let's look at each of them. First, what's the value to the buyer of having the project done at all? You might not have a say in this, although some sales processes include helping the client to recognize the value they'll get. For example, if you know about studies showing that online stores increase their revenue after adding a certain widget to their site that helps justify an increased fee for adding that widget.
Let's go to the second question that clients ask themselves, "Can I do it myself and how much will that cost?" I'm afraid you won't have any input there. But then we come to a factor you can influence. What are the costs and risks for assigning it out? If the risks for hiring you are low, you can increase your rate. So, your challenge is to demonstrate that hiring you is a low risk proposition. You do that by having a strong portfolio, good referrals and demonstrated experience.
That's why experienced freelancers and those whom the client already trusts get the best pay. The last part is that you're not just competing with the client's staff; you're also competing with all the other solution providers, including freelancers and agencies. So, your cost, and again, the dollars per hour you receive, has to be competitive. Keep in mind that many clients prefer prices to be quoted per project, not per hour. So, you'll have to do that calculation. But that actually points to another way you'll effectively raise your rates.
The longer you're in the business, the more efficiently you'll complete jobs. So when you give that project price, the total will be divided by fewer hours, giving you a better dollar per hour rate. In any case, just thinking about how to raise your rates forces you to examine the value that you give to clients. As I said earlier in the course, freelancers often fall into the trap of charging too little, because they don't recognize their own value. But your experience will show just how valuable you are, how to demonstrate that value to clients, and how to get better rates as a result.
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