Business Skills For Freelancers
Mastering these business skills for freelancers will help you set appropriate rates, offer valuable maintenance services, ensure upfront payments, charge for all work, and use detailed proposals and contracts. By adhering to these principles, you can avoid common pitfalls and build a sustainable, successful freelance career.
I wish I had read something like this five years ago. Even if you are a highly skilled developer or designer, lacking business skills can lead to failure as a freelancer.
Intro:
For the past five years, I have been diligently creating websites for various clients. During three of those years, I invested an immense amount of time and energy that, in retrospect, feels unproductive. I dedicated twelve hours a day, including weekends and holidays, to my work, resulting in a substantial portfolio of projects.
However, upon reflection, I believe that if I were to recreate all these projects from scratch today, it would take me no more than a year. This realization has led me to understand that those three years could have been utilized more efficiently.
While this may seem like common knowledge to many, it was a learning curve for me as a business owner. This experience has been instrumental in my growth and understanding of time management and efficiency in business operations. It’s a lesson I will carry forward in my future endeavors.
1. Don’t Be Cheap: Setting Appropriate Rates
Offering services at reduced rates can lead to excessive workloads and financial instability. It’s essential to set rates that reflect the quality of your work, ensuring you can invest in your business and attract high-value clients.
Clients who prioritize cost over quality have been the most challenging in my experience. They tend to seek the most affordable option and consistently have high expectations. They often fail to acknowledge or accept that exceptional results cannot be achieved at rates that barely meet basic living expenses.
In the long term, clients who are primarily driven by cost add little to no value. While any income may seem preferable to none during financial hardships, it’s important to emphasize: clients driven by cost have little worth.
The most beneficial client relationships are often formed through referrals. With cost-driven clients, you risk becoming known as the “affordable option.” The leads they provide will likely also prioritize cost over quality. However, if your rates reflect the quality of your work, you’ll be recognized as the “professional who delivers excellent results.” This distinction significantly impacts the quality of the leads you receive. When I quote my standard rates to leads from cost-driven clients, they are often surprised, even though my rates remain competitive.
The only justification for offering lower rates is if you are new to the industry and need to build your portfolio, or if you are working on a project for close friends or family. Beyond these circumstances, if the quality of your work is poor and you attract only cost-driven clients, you risk remaining in a stressful situation without making any career advancements.
Earning a living is about more than just covering basic needs. Higher earnings provide more opportunities to invest in your business and elevate your work. If you’re only earning enough to cover your bills, your ability to grow is limited. You won’t be able to afford subscriptions to premium resources, invest in software that could streamline your workflow, upgrade your equipment, or replace outdated tools.
Please understand my point. It’s not feasible to demand $50k for a landing page that only has 3 sections. However, it’s essential to honor your hourly rate that sustains your livelihood and be honest with yourself when estimating the time a project will require.
How to Set Your Hourly Rate:
It’s very important to be truthful to oneself. It’s not sustainable to work for 12 hours each day. In the long term, you can only manage 5 hours of intense work daily. I admit that I initially worked for 12 hours a day, but it had a significant impact on me. The remaining time is spent on unproductive leads, dealing with administrative tasks, organizing your affairs, and staying updated with relevant news. Therefore, the actual work amounts to 5 hours a day. When you factor in vacations, sick leaves, and other variables, you’ll likely determine the necessary hourly rate.
2. Offer Maintenance Packages: Steady Income and Client Retention
Maintenance packages provide a steady income stream and reduce the need for constant new leads. Regular updates and backups protect client websites and build long-term relationships, ensuring you’re compensated for ongoing support.
The website development industry can be challenging. If your livelihood depends on completing a certain number of projects each month, you may find yourself in a continuous cycle of seeking new leads. There will be instances when new leads may not materialize for a month or more.
To mitigate this, it’s beneficial to offer maintenance packages as an additional service. I encountered an individual who has a comfortable living as a web designer/developer, with half of his income derived from these maintenance packages.
We are all aware that unexpected events occur. Situations can deteriorate, and the last thing you desire is to be burdened with resolving issues without compensation.
Consider this scenario: You completed a project for a client two years ago, and they did not opt for a maintenance package. They paid a single invoice, and that was the end of the transaction. Suddenly, they contact you, informing you that the website is malfunctioning, and they expect you to rectify it without charge. Their reasoning is that they paid for a functional website two years ago and anticipate it to remain operational for the next 20 years.
Upon evaluating the situation, it becomes clear that their budget-friendly server has been compromised, their data has been deleted, and the only viable solution is a complete rebuild. This would require charging the client the full price again. You might consider offering a 50% discount, but this would significantly reduce your hourly rate, bringing you down to the level of a novice who just learned to install WordPress recently.
This proposal would likely not be well-received by the client, and they may hold you responsible for their issues. They might decide to switch to another web developer, leave a negative review on Google My Business, and continue to share their own (inaccurate) version of their experience with you whenever they discuss web design with others.
Maintenance prevents all of this.
- Regular backups are essential for data protection in case of unforeseen issues. The combination of MainWP and Vivid PRO is highly effective for this purpose.
- Frequent system updates, including plugins if WordPress is being used, help to prevent potential vulnerabilities. It’s recommended to stay updated with Wordfence news and prioritize updates for any vulnerable elements through MainWP.
- Post-update site testing is crucial to identify any issues that may have arisen during the update process. If any incompatibilities are detected, it becomes your responsibility to rectify the code and resolve the problems. This is a standard part of maintenance.
- When workloads are high, it becomes easier and necessary to offer priority support to those who have subscribed to maintenance packages.
- My maintenance packages also provide clients with the option to communicate with me via Whatsapp/Viber, and even call me on weekends (this is limited to a few clients with substantial maintenance packages). Many clients value this level of support and can easily see its worth.
The functionalities of the website can guide you in adjusting your rates for maintenance packages for each client. A small static website doesn’t require frequent updates or extensive maintenance. Updating the system twice a year and performing one backup annually should suffice. The cost can easily equate to four hours of your time, as maintenance in this case won’t require more than that. If you have ten such small website maintenance packages, you’ve effectively secured a week’s worth of your time.
The maintenance packages you offer can be adjusted based on the specific needs of each client’s website. For instance, a small, static website may require minimal updates and maintenance. A biannual system update and an annual backup could suffice. The cost for this service could be equivalent to four hours of your time, as maintenance for such a site is unlikely to exceed this duration. If you maintain ten such websites, this equates to a week’s worth of work.
On the other hand, a large online store with over 100 orders per day would require daily backups. Any downtime could result in significant revenue loss, so updates should initially be performed on a test environment. These tasks are time-consuming, and your charges should reflect this. For such projects, you could charge for up to 40 hours of your time per year. If you have eight clients of this nature, that equates to two months’ worth of work, reducing the need to find new clients in the following year.
Consider a scenario where you have a variety of maintenance packages. You might have ten clients on the highest package, forty on the smallest package, and thirty on a mid-tier package (dynamic sites requiring weekly backups and monthly updates). This could account for nearly half of your working hours. Designating a specific day of the week, such as “Maintenance Wednesday,” could simplify your schedule.
The services provided were purely technical maintenance. If clients require additional services such as blog post creation or social media management, these can be offered as custom services.
However, it is strongly recommended to charge for your maintenance packages a year in advance. Chasing clients each month for payment because they have forgotten or are reluctant to pay can be a significant inconvenience.
3. Demand Payment Upfront: Ensuring Client Accountability
Requiring partial payment upfront protects you from non-payment and keeps clients engaged. This practice reduces project delays and ensures your time is valued.
This not only safeguards you from non-payment, but it also ensures client accountability. Realistically, you may encounter various excuses during the course of some projects, after you’ve already invested considerable time. Here are a few examples:
- “We’ve decided that we no longer require a website, (so we won’t pay you).”
- “We’ve discovered that our boss’s cousin also creates websites, so we’re going to transfer the project to him (so we won’t pay you).”
- “We’ve lost the funding necessary for the project, so we’re terminating it immediately (so we won’t pay you).”
Such scenarios occur more frequently than you might expect. By securing a partial payment upfront, you protect yourself from non-payment.
Additionally, an upfront payment of 50% helps keep the client engaged to complete the project. It’s common for clients to become less responsive to your inquiries and requests mid-project, extending a one-week project into a journey of three months or more, which can significantly reduce your effective hourly rate.
When clients pay 50% upfront, they are more motivated to finish the project sooner because it’s not just your time on the line anymore, but their money as well. “We paid 50%, let’s make sure they deliver” thoughts come into effect, and the client will be more responsive and you’ll be able to finish the project sooner.
4. Charge for Everything: Fair Compensation for Your Time
It’s crucial to charge for all work done. Many clients expect indefinite free updates and fixes, which can lead to unpaid work. By charging for additional tasks, you maintain profitability and respect for your time.
I regret not implementing this earlier in my career, but it’s essential to charge for all work done for clients. Your time must be compensated because you’re running a business, and you can’t cover your expenses with gratitude alone.
Many clients assume projects are never truly complete and expect indefinite free upgrades and minor fixes. If you don’t insist on being paid for your time after a project is finished, they’ll continue to ask for free work repeatedly.
If, like me, you have 40 clients contacting you each month with tasks you never agreed to, you must put an end to it and start charging for everything. Clients will either stop bothering you, saving you time, or they’ll start paying, earning you money.
When I began charging for all additional work, a client actually said, “Finally, you should have been charging us for months already.”
I’m not suggesting you charge for every 30-second task, but consider the impact if all 100 of your clients requested the same thing in a month. Would you remain profitable, or would you end up working 100 hours for free?
5. Don’t Deliver Unless You’re Paid: Protecting Your Work
Secure the final product until full payment is received. This approach ensures you are not scammed and motivates clients to complete their payments promptly.
Even though you require 50% upfront, some clients may still try to avoid paying the remaining balance. To protect yourself, do not deliver the final product until full payment is received.
For instance, some clients might believe that your website will generate significant revenue quickly. They might not even have the funds to pay you initially, and expect to use the revenue generated after delivery to pay the remaining balance. This approach is risky and must be avoided to prevent being scammed.
Secure the website (so they can’t run ads on it) until full payment is made. Block it from Google and search engines, and keep it in your test environment rather than moving it to their server. Once the payment is complete, proceed with finalizing the project.
6. Use Proposals and Contracts: Clear Expectations and Protection
Proposals and contracts clearly outline the project scope, expectations, and deliverables, preventing excessive demands and ensuring both parties understand the terms. Before starting any project for a client, ensure you have a contract in place. Without one, you risk falling into an endless cycle of demands that can significantly reduce your hourly rate.
Consider this scenario: A prospect calls, requesting a “very simple website, nothing extraordinary.” The project involves a few contact forms, some static content, and a sticky header. You quote a price for 20 hours of work and start the project, expecting to complete it in a few days.
However, as the project progresses, the client begins demanding more: custom solutions, a booking system, Stripe integration, and more. Without a contract, you have no basis to refuse these additional tasks. The client may not recall their initial request for a simple website. If you decline the extra work, the client may walk away, wasting your time. If you agree, the project extends to 60 hours instead of 20, reducing your hourly rate by 66% and significantly undercutting your earnings.
Here’s how my proposal system works:
I talk with the prospect extensively to see what they want and need, and I ask them over 10 questions.
Once they reply, I write down everything I’m offering for their project.
My contract for a website design usually includes:
- Unique design based on client’s wishes and my recommendations
- List of tools and software I’m going to use
- Expected deadline (which starts only when the client sends me every piece of needed material and agrees on the design draft)
- Domain and hosting details: who pays them and what’s the renewal cost?
- Number of unique pages (Homepage, About us, Contact, Team, Service)
- Wireframe of their website
- Functionality (contact forms, booking form, store, payment processors integrations, Google Maps integration…)
- Number of articles/products I’m willing to publish on their site myself
- Blog/news functionality
- Video tutorial on how to publish and edit the news section
- GA and GWT integration
- Basic on-site SEO optimization
- How much time after the project’s delivery I’m willing to work on small edits and fixes
- What kind of maintenance comes with my offer (1 year upfront)
- Etc.
Once my proposal is finished, I send it to the prospect and ask them to confirm my offer via email. This ensures that everything is documented, and the client knows exactly what they agreed to. This way, I have all the proof I need in case the client starts demanding more during the project.
It’s not an issue to do extra work for any client, but if it involves tasks that were not initially agreed upon and will take additional hours, they need to pay extra.
Finally, mastering business skills is as crucial as developing technical expertise for any freelancer. Setting appropriate rates, offering maintenance packages, demanding upfront payments, charging for all work, withholding final delivery until payment, and using detailed proposals and contracts are vital strategies. These practices ensure that your work is valued, your time is protected, and your business thrives. By adhering to these principles, you can avoid many common pitfalls and build a sustainable, successful freelance career.
FAQ
- Why is it important to avoid offering services at a reduced rate?
Offering services at a reduced rate often leads to excessive workloads and financial instability. Clients who prioritize cost over quality tend to have high expectations and bring little value. Setting higher rates reflects the quality of your work and helps attract better clients, allowing you to invest in your business and improve your services. - How can I determine my hourly rate as a freelancer?
It’s crucial to be honest with yourself about how much productive work you can handle daily. Consider factors like vacation time, sick leave, and administrative tasks. A sustainable approach is to calculate your hourly rate based on five hours of intense work each day, ensuring it covers your living expenses and business investments. - What are the benefits of offering maintenance packages?
Maintenance packages provide a steady income stream and reduce the need to constantly find new clients. They also ensure clients receive regular updates and backups, protecting their websites from potential issues. Offering maintenance packages helps build long-term client relationships and ensures you’re compensated for ongoing support. - Why should I demand payment upfront?
Requiring partial payment upfront protects you from non-payment and ensures client accountability. It also keeps clients engaged in completing the project, as they have already invested money. This practice reduces the risk of project delays and non-responsive clients. - Why is it essential to charge for all work done?
Charging for all work ensures your time is compensated. Many clients expect indefinite free updates and fixes, which can lead to significant unpaid work. By setting clear boundaries and charging for additional tasks, you maintain profitability and respect for your time. - What should I do if a client refuses to pay the remaining balance?
Do not deliver the final product until full payment is received. Secure the website by blocking it from search engines and keeping it in a test environment. This approach ensures you are not scammed and motivates clients to complete their payments promptly. - How can proposals and contracts protect my business?
Proposals and contracts clearly outline the project scope, expectations, and deliverables. They prevent clients from making excessive demands that were not initially agreed upon. Having everything documented ensures both parties understand the terms, reducing the risk of misunderstandings and disputes.
For more tips on improving your freelance business and client management strategies, explore our blog or contact us for personalized advice.