How To Manage Your Money As A Freelancer
Top tips for managing your money as a freelancer.
Deciding on your freelance price tag by guest writer, Matthew Leighton
Congratulations. You’ve decided that freelance life > corporate life and you’ve made the brave call to try your talented hand at it. And well done on already nailing the first step, in that you’ve picked a good time to make the move. Work from home has become a normalised concept, most clients are quite happy to meet digitally, and with the price of fuel on the same trajectory as Bitcoin was in the early days, driving to and from your workplace ends up costing a fair whack every month.
Just one thing left to figure out: how much are you worth?
You (should) have a pretty good idea of what you bring to the table. Map it out in a way that makes sense to a non-creative client, so that they understand what they’re paying you the big bucks for.
Factors that can influence your earning potential include:
Don’t worry if you feel you might fall a little short here or there. Anyone has the ability to increase their stock in any of these factors, so shortcomings won’t stay that way for long!
The above doesn’t set anything in stone, but it does help you with what to classify yourself as (Senior Designer, for example), and what you can offer for what you charge.
It’s all well and good knowing where your strengths lie, but if you don’t have anything with which to measure the Rand value of those strengths, it’s difficult to come up with an accurate and fair figure. Remember that freelancers can have different rates for hourly work compared to retainer work, so it’s not as simple as taking your corporate salary and loosely dividing it by twenty.
Talk to your freelance friends and any contacts you feel comfortable approaching, and ask them about their experience, insights and how they calculate their price points. Because you get to determine your own rate as a freelancer, talking numbers isn’t as hush hush as it is in corporations, so open and honest conversations are usually welcomed (provided you don’t pry, of course!).
If your freelance network is a little small - and even if it isn’t - reach out to Fundi, too. I first heard about Fundi through a friend at the early stages of my own freelance career, and they were, and still are, incredibly helpful at introducing me to the various facets of the freelance world.
Because Fundi exists to connect quality freelancers with quality clients, they’re invested in your success. Part of that is an honest and unbiased view of what work your skills would be best suited for, and (roughly) what that would pay. This current and reliable knowledge is immensely valuable in ensuring you don’t overshoot and scare away potential clients, or undershoot and end up trading your precious skills for 2-minute-noodle money.
Also, do some research online. Even if nothing helpful comes from it directly, you’re a freelancer now: online research is a skill you’ll need, so get to practising!
Up 1: Sometimes a job comes along with a price tag attached. This makes rate calculation a breeze because, well, there isn’t any. But - and this is important to note - don’t jump at the opportunity without thoroughly investigating the brief and making sure the time it’ll take is worth the money you’ll make.
Up 2: Your freelance success, and ultimately the rate you can ask for, isn’t just down to your quality of work. Maintaining good client relationships counts for a lot too. Make sure you’re personable, consistent and on time, and your clients will quickly come to enjoy working with you just as much as they enjoy your output.
Some jobs will take you longer than you expect. Some jobs will look simple when you start, but will end up being more intense and complex than you first thought. Both of these things will affect your timing and, by extension, your earning capacity.
Don’t let this worry you too much, but do learn from the experiences. Knowing how to accommodate time-intensive tasks and work on more complicated projects than usual is part of upskilling yourself as a freelancer.
Each job is specific, so it stands to reason that each job will pay its own specific amount. So long as the rate per project is between a minima and maxima that you’re comfortable with, you’re all set!
And lastly, don’t neglect your portfolio once you start getting jobs. Keep that sucker updated with your latest and greatest, so that any potential clients are seeing your best work and you’re able to quote accordingly.
Freelancers usually have a rate card that includes the following:
This is a simple, easy to understand structure with price points that range from your hourly rate (more expensive) to your retainer rate (more economical).
Once you have a figure you’re happy with for each, go forth with confidence. The reality is that no matter how carefully you calculate your rate, you’re going to get it a little bit wrong here and there. That’s what starting out looks like!
So don’t panic if you get your initial rates a little wrong, or underquote, or end up working ten hours on a five hour job. Don’t worry if a client reverts on a quote and asks if you can dance the negotiation dance. You’ll find your feet in time, and rock out as a result.
And don’t forget that your friendly Fundi advisor is always here to help, be it advice, client communication, or rate re-negotiation.
Get in touch with Fundi today.