The Working World

The Freelancer’s Tip Sheet

The Recession provides excellent opportunities for freelancers as companies shed regular staff and look to freelance workers for contract jobs. For those new to the freelancing world, there are plenty of benefits to expect, including picking your projects, variety in your jobs, the chance to work with different people, and the opportunity to work at home. To be sure, there are challenges, too, from dry spells to chasing down checks. There’s no magic formula for freelancing, but these tips may help you be more effective:

1. Keep meticulous records.
Be sure to keep receipts for everything relating to your work for potential tax deductions. Things like magazine subscriptions, web domains, and dedicated phone lines can all potentially be listed. This is especially important if you have a clearly defined home office area. You can write off some expenses based on ratio of office space to home.

2. Create a formula for what to charge.
Many freelancers use this simple formula: $D /B hrs. D is how much you want to earn in a year. B is the total number of billable hours that you think you can secure in a year. Most freelancers estimate B on the basis of 15 billable days per month, for an 8-hour day (15 d/mth x 8 hr/d x 12 mth/yr = 1440 hrs/yr). The remainder of each month will be set aside for administrative tasks, contacting new clients, research, and vacations (yes, freelancers need vacation, too!). Be sure to factor in your overhead, including website maintenance, professional association fees, subscriptions, etc.

3. Create an “Estimate of Services” template.
When a client is ready to contract your services, send an “Estimate of Services” document that outlines how many hours you expect the project to take, a description of services, and a deliverables timeline. Note somewhere in the document that the project will not surpass the amount you’ve cited unless approved by the client. You need to indicate that if, at any point, the fee is projected to be greater than estimated, the client will be informed of reasons and instructed on increases or alternatives

4. Divide payments.
Many freelancers divide payments into thirds. One third of the total payment is delivered up front, a second payment at the mid-point of the project, and one payment at the end. Get comfortable with insisting on payment up-front – if you don’t, you risk getting burned. Up-front payment also helps clients deliver necessary materials to you in a timely fashion. If they’ve already paid something, the feeling of commitment is there, which makes everyone work more efficiently.

5. Have a plan for late payment.
It’s inevitable – some clients will drag their heels on paying you on time, and some will come up with a myriad of excuses. Invoice promptly, and when payment is overdue, quickly send a polite email. Give the client the benefit of the doubt – it may be a simple case of forgetfulness or a process issue that’s easily explained. If payment is not received within a week, follow up with a call. In a bad economy, cash flow problems may hit clients unexpectedly. If the client has hit a rough financial patch, suggest a payment plan – perhaps dividing the total into smaller payments. It’s easy to become angry when you aren’t getting paid, but it’s better to exercise restraint and come up with a viable plan. This makes you look professional and problem-solving.

6. Market yourself.
Having a website that includes your bio, CV, and work portfolio is an essential marketing tool, and it doesn’t have to be expensive. There are do-it-yourself platforms like Sandvox that give professional-looking results for people without much technical know-how. You might elect to keep a blog on your website, informing potential clients of work-related activities. Creating a strong online presence will help tremendously in getting freelance jobs.

7. Network.
Join professional organizations associated with your industry and attend networking events. Take advantage of online networking platforms such as LinkedIn, which will help inform potential clients of your skills and services. Be sure to include a link to your professional website in your profile and update regularly.

8. Keep yourself afloat.
Try to put aside enough to keep yourself afloat for at least three months. You need to be able to cover the inevitable income gaps and dry spells that are part of the freelance life. When this happens, you can give yourself a break rather than descending into panic if you have a proper cushion.

9. Stay healthy.
Freelancers are often tempted to go without health insurance. Don’t do it. There are lots of professional organizations (The Freelancers Union, Media Bistro, etc.) that provide group rates to freelancers. It’s a big chunk of money each month, but you risk financial disaster if you aren’t properly covered.

10. Pay it forward.
If you develop a reputation for doing good work, you may get more work than you can handle. Pass jobs on to a colleague. They’ll likely do the same for you.

Tags: freelancing, The Working World