Do's and Don'ts of Freelancing
Millennials have seen a major shift toward the "slash workforce generation" (professionals who hold several jobs in varying fields). Earlier this year, The New York Times documented the lives of professionals who juggle careers. In today's marketplace, many professionals are either unemployed or underemployed. They are looking for new opportunities in their field by working part-time while supplementing their income with service jobs like nannying or waiting tables. Professionals are also able to pursue their passion by working side projects on weekends or after work.
But another great way to make more money is to go freelance. As an added benefit, it's also a beneficial way to practice your passion. Here are some tips for making it happen.
Do your research. You might have shared one of your recent projects online and received a query asking for your freelance services. Before dipping your toe into the freelance pond, do your homework. Seek out the industry rates for your skillset, level, geographic area and field. Ask members how are part of industry-related groups what the rates are, or connect with fellow freelancers and see if they would be open to sharing their rates with you. Freelance sites like Elance or TaskRabbit will also grant you with access to the going rate. They'll also be a great place to look for work once you're ready.
Know your worth. Now that you know what the going rates are, you need to decide how to price accordingly and see if you can afford to freelance full-time. If you're thinking of making the jump to full-time freelance, understand what the variance would be from your current full-time job. Full-time freelancers should also use an equation to figure out what to charge their clients per hour.
What is your yearly salary? This is the salary you receive before taxes. You should also know the full-time rates of freelancers in your industry.
- Annual billable hours: Do you know the hours you spend working per year? Start with 365 days, remove any vacation/sick days, weekends, and the time that you'd spend doing administrative tasks (filing, billing, etc). Multiply that by the number of hours you would work per day.
- Yearly profits: This should be 10 to 15 percent of your annual salary.
- Yearly expenses: Items that you no longer get if you are a freelancer. This includes an office, health insurance, 401(k)/401(k) match, paid vacation, etc.
Grab a calculator and input the following freelancer equation: your annual salary + your annual expenses + annual profits / by annual billable work hours = your hourly rate
Be business savvy. Do you go hourly or charge by the project? Many freelancers debate this question before accepting a new gig. The best way to decide this is to have a chat with your client regarding expectations and make sure you set clear ones.
You also need to privately determine how long it will take you to complete this project. Is it 15 hours? Is it 20? Every project and every client varies. I once worked in house with a woman who spent five hours on a 200-word article. When the boss found out, she was livid. She wanted her to spit out one article in an hour or less. What does that tell you? She wasn't looking for unique detail, extensive interviews or flowery language--she is looking for interesting, clean content.
On the other hand, I was working with a graphic designer who was so speedy that she would complete her work in less than half the time of other freelancers. In that instance, she was selling herself short, and should have charged by the project. Just because she is a faster worker doesn't mean she should make less. Hourly seems to be the better angle, except if you cannot finish on time or if the client suddenly gets sticker shock. If you are charging per project, than you need to be realistic about how long and how much effort you'll be putting into that project.
Don't short-change yourself. Freelancers need to price according to whether this is their main career. You need to be able to live off your wages. As you start out, your fees will fluctuate. An infographic you design for a Fortune 500 company differ in cost for one you create for a startup. Remember not to price yourself so low that you would be losing money on the deal. You are a brand and a business, and need to act accordingly. Always negotiate and realize the impact your work has on other people, businesses, or corporations.