Easy Money Guide

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Freelancing and Self Employment

“Deal with things when they are small..”

If you are self-employed, which many of us are becoming more frequently, often there are twin problems – not enough money, or too much work. The precarious nature of freelancing makes it hard to turn down work in good times, but the result is burnout and dissatisfaction.

To help with both of these problems, it is important to establish control over your workflow, rather than having it control you. Setting up a few simple precautions will be worth it in the end.

Set Minimum ‘Job’ Amounts

We all have our minimum wage we have set for ourselves, which you may or may not keep to. But have you set yourself a minimum work period, or a minimum total job amount?

The simplest of these could be simply to say that the least amount of billable time you work for is one hour. This means that you are not working for a fraction of your hourly rate for small tasks. This makes sense, as every small job requires a relatively large amount of time for email communication, billing, and the like.

What if you are still being overrun by small jobs? Consider raising your minimum work period to two hours, or even three. Stress to your customers that they will still get the same value – perhaps even more so, as they are given extended time in your day, which avoids charging for repeated tasks, and makes use of economies of scale. But for you, the advantage is that clients will ‘save up’ a lot of small jobs, rather than scattering requests throughout your work week.

A similar logic works for setting a minimum job amount. Knowing you will gain at least X amount of dollars from each new client will let you relax about covering your bills, and begin to take control over the work you do. This works particularly well with the next point.

Draw Up a Timetable, or Work Schedule

Perhaps the best friend a freelancer will have is a schedule of ‘blocks’, that people can pay a deposit to book into. A simple model may be: ‘I will only work for one client per week / two weeks / month’, (or whatever suits your needs).

The advantage of this is that you convert a rush of people in any one month into a line of bookings, that will see you into the future. There need be no more periods of work stress, if you set your amount of clients well, and stick to it.

If you are afraid of booking too many clients at too low a rate, the next step might also help you.

Staggered Pricing

Another way to maximize your income, whilst maintaining security in your workload, is to introduce a staggered pricing system. Again, the details can be up to you, but this method works well for me.

I have a ‘standard’ price for a service I provide, let’s say it is $800. From trial and error, I know that this is amount that many people will be happy to pay, yet is just under the price that will start scaring customers away.

Using the work schedule mentioned earlier, I know that I have one free slot per month. If I need a client next month, I advertise my ‘standard’ rate. If I have no client this month, I offer a $100 discount to potential customers (and so on, if you are really out of work, you can continue your discounting at a similar rate – $100 for every week you have not found a customer).

At the more usual end of things, you will be raising your prices. Have a customer lined up for next month? Then the advertised price is $100 more than your standard one. The month after that? Add $200. And so on.

The beauty of this system is it allows you to accept future work, whilst knowing you are not underselling yourself. It is the next best thing to ‘auctioning off’ your services.

You can raise or lower your ‘standard’ price once you see how demand is going, and you start to get a sense of how far ahead you are booked up. If you would like to have two, three, or four months booked in advance, you can lower or decrease your base rate until you have, approximately, the right amount of booked in customers.

Trust me – once you have instigated this system, you will appreciate the feeling of relaxation and clear thinking space for your own projects you never thought was possible from freelancing.

Moving From Selling Your Time to a Product

Many freelancers sell their time, which means they have to raise their hourly rate in order to get any peace in their workday. Unless you have discovered a particularly unpicked niche (and ‘there is no more low hanging fruit’, it has often been said), there will be a natural ceiling to what you can charge folk. In a globalized workplace, there is always somebody out there who is willing to do similar work, only cheaper.

You will thank yourself later if you can make the transition from selling your hours, to selling your products. This can be achieved by

  • Outsourcing your work, and even the management of this outsourcing
  • Moving from a time-based service (eg. web design), to a product (eg. templates)
  • Using affiliate schemes, to sell information, rather than performing the service yourself.

Have Faith

Finally, it might be worth while to give a little reassurance to those who are starting out in a self employment endeavor. There is a natural growth, that leads to abundance, in any such enterprise.

Providing you provide a good service, in an in-demand area, which is towards the forefront of what is offered by others, and provided that you keep your pricing responsive and flexible, you will succeed.

How? In many ways, starting a business is a lot like a tree taking root in a new part of the forest. There will always be older trees falling down, creating opportunity, and younger trees, which are future competition, but also behind you (in areas such as advertising, profile, and knowledge).

As you complete one job, you create a small ripple, as the people you work for tell their friends. One satisfied customer leads to two, then three, and before you know it – you have a whole ecosystem of potential clients. Pretty soon, you will be increasing your prices, or taking on more workers, to keep up with demand. It is the way of nature, and it is the way of easy finances, too.