Freelancing Doesn’t Mean Working for Free
Posted August 19, 2011 in How-To, Managing Clients
For the countless individuals who either freelance on the side or do it full-time to support themselves and/or their families, there are many advantages and some disadvantages that go with the territory.
Advantages include being able to work for yourself, set your own schedule, and build a portfolio of work that can be used to gain a full-time job (should you so choose).
On the down side, freelancers face inconsistent work schedules that lead to being paid well some months and not so well other months, hours that can be all over the place, and often having to come up with their own health insurance benefits.
One of the other issues freelancers often face is making sure they are being paid an appropriate wage.
Whether you are doing freelance writing, photography, web design etc. … you certainly want to get compensated with a fair wage. Too often, companies try to underpay freelancers, figuring they’re just happy to have the work in the first place.
In this post, I’ll share some tips that you can use to make sure that you get paid fairly for your work.
Tips Towards Getting the Right Rate
First of all, determine ahead of time what a fair rate is for your time and effort. If you know this upfront, you’ll be in a much stronger position to negotiate a good rate for yourself.
Here’s a checklist to help. Check off some of these items so you’re not taken for a ride by an unscrupulous client:
- Research what the client has paid others–This may not be the easiest project in the world, but try to find out what the client paid others recently for similar work. If you discover that you’re getting lowballed, reconsider whether you really want to work for this company.
- Charge by the hour, not the assignment–Let’s say you take on a project and it involves much more research and prep time than originally expected. You’re now working extra hours and coming out on the short end of the stick when you sit down and figure out what you actually got paid for all the hours worked. If you suspect this might happen, do the assignment on an hourly rate so that you are fairly compensated. Some clients may think you’re trying to gouge them by extending your work to get in a few more hours, but a reasonable timeline to finish a project should not be an issue.
- Set your payment dates ahead of time–Have you ever done freelance work for a company and were told “the check is in the mail?” Yes, it does happen more often than people would care to think. Don’t let someone string you along by telling you that you will eventually get paid. Get exact or approximate dates of when you can expect to be compensated so that you are not left hanging for weeks, and in some cases months, on end.
- Discuss a “kill fee” (if appropriate for your freelancing field) and see if the client will agree to one–If you’re assigned and are writing a story for a magazine, what happens if the publisher kills it? Do you get compensated or did you just waste hours of your time? Find out up front if there is a fee you will receive for your time and efforts, even if the project ends up not seeing the light of day.
- Provide your client with enough information so that they can send you a 1099 tax form–Although the form is not required for earnings under $600 for the year, it is important to have submitted the paperwork to the client so it is on file. The worst-case scenario is for you to do a fair amount of work for the client, go past the $600 threshold, and have your client be lax in turning in the report to the IRS. If this happens, not only is the client facing possible penalties, but you could find yourself owing money if you forget to declare the earnings.
If you take the right precautions, you can avoid any unpleasant surprises when it comes to getting paid. (You shouldn’t have to work for tips.)
Your Turn
Freelancing, no matter what your profession, can lead to extra income and the ability to showcase your talents. Just be sure, however, that you’re not getting taken for a ride when it comes time to be fairly compensated. Heck, you don’t want to have to pay the taxi or bus fare too.
What strategies do you use to make sure you are paid fairly?
Share your tips in the comments.
Related posts:
- There’s More to Freelancing Than Working from Home
- What to Do When Constant Client Emails Keep You from Working
- Jump-Starting Freelancing Productivity: 9 Reasons Why and 5 Reasons How Working Smarter Works
- How to Keep Working at Home from Destroying Your Life
- What Happens When the Website You Are Working on Blows Up?
About the author: Dave Thomas, who covers among other subjects’ home-based jobs, writes extensively for Business.com, an online resource destination for businesses of all sizes to research, find, and compare the products and services they need to run their businesses.
The Unlimited Freelancer is Now Only $19
Unleash the true potential of your business. Get The Unlimited Freelancer and start transforming your freelance business,
now only $19.
Try searching "Getting Clients" or "Productivity"
Free Report
Sign up for our product discount list to get a free copy of Why Some Freelancers Thrive and Others Barely Survive. You can unsubscribe anytime.
Forum Discussions
- Comprare Generico ANTI-HERPES Online - Farmacia Online
May 16th, 2012 - 10:15 am - Comprare Generico ANTI-DIABETIC Online Italia
May 16th, 2012 - 10:14 am - Comprare Generico ANTI-DEPRESSANT ANTI-ANXIETY Online - Farm
May 16th, 2012 - 10:13 am
Popular Articles
- SEO Techniques All Top Websites Should Use
- When a Client Can't Afford You: Why It's Still Better to Bid High
- How To Stop Scrambling For Clients And Get A Steady Stream Of Paying Gigs
- A Simple Way To Stop Clients From Rejecting Your Proposals
- 3 Reasons Your Rates Are Still Low (And How To Start Raising Them)
26 Comments
Cliff Huizenga
August 19th, 2011 at 8:44 amI find myself pricing between two different pricing brackets depending on the customer:
If it’s a bigger company with a real budget for quality work, I charge an hourly rate with an estimated amount of time (treating the work like a car repair man would for estimates). I give them a great product for what they’re paying for and make sure they’re happy with it without screwing myself over on costs.
If they are a local business that needs a fix or build with a limited budget, I ask them what they were looking to spend on the site. If it’s reasonable for the time and work, I work with them to make it happen within that budget. And working cheaper doesn’t mean a lesser-quality product. The balance to the lesser pay is that the client gets me more business via word-of-mouth. Plus, it’s simply a nice thing to do.
While it may not always be money as payment, freelance work should never be free. There needs to be some sort of equivalent exchange in services. Otherwise, it’s straight-up charity… which isn’t bad either, but save charity work for family, close friends, and non-profits. Never give “charity” to companies who can afford your initial rates (Especially scummy ones that will want to reuse you because they know they can get away with your free/cheap labor)!
Gold
August 19th, 2011 at 9:18 amCliff,
(treating the work like a car repair man would for estimates).
That is the first time I’ve heard that.
You mean you get paid for making the estimate??? You go to the prospect. The prospect asks how much and you say that will cost you $75 for the estimate payable in advance.
Right?
Debra Stang
August 19th, 2011 at 9:20 amThis article was just what I needed today. I just quit my day job and took my freelance writing business fulltime, and I’m struggling with rates. I’ve had several people tell me I “lowball” myself, so what I’ve been doing with new clients is deciding how much I would have charged in my salary-supported days, and then swallowing hard and asking for twice that amount. A few people have said it’s too much and walked away, but I’ve been surprised how many have agreed to my new rate without even blinking.
Cliff Huizenga
August 19th, 2011 at 9:25 amGold,
Think of it this way: You bring your car for repair. He has an hourly rate, and does an estimate based on what he thinks is wrong and how long he will take to fix it. Now, during the fix, let’s say he finds that the car is in a lot worse shape than he initially thought. Now, the estimate changes. The service needs have changed and more time is required.
If you estimate the project to take a certain amount of time, and during the project the needs change—client has new demands, different direction, or requires more work than initially planned because of an unknown variable (broken back-end, bad code, server issues, etc.)—then your estimate changes. If this is expressed up front and they agree to your services, then you don’t get screwed over in the end with comments like, “You said you could do it in x hours!! I’m not paying extra!”
Big tip: Have *everything* in writing from the beginning, and don’t start anything without a contract.
Gold
August 19th, 2011 at 9:50 amCliff,
That is the law for auto repair in California.
But my question is do you charge in advance for your estimate?
Cliff Huizenga
August 19th, 2011 at 9:51 amGold,
Oh no, I don’t charge in advance for an estimate. If I haven’t done any real work, I don’t expect to get paid. ;)
Dave Thomas
August 19th, 2011 at 10:31 amHaving freelanced on the side for some 20 years, I’m still amazed when someone balks at a rate that is equal to or even below industry standards. Too many companies think the work just takes a few minutes and that you’re over charging them. They fail to account for the research time, editing etc. that goes into each article. I’ve had some really good companies to freelance with and some others who should look for their next freelancers at the local 7-Eleven, because those are the kind of rates they want to pay.
Travis Wisely
August 19th, 2011 at 10:55 amHere is my problem with charging an hourly rate. I feel like I’m able to type at a faster rate than some others in the industry. So, what might take one writer two hours to complete, I can complete in one hour. However, when I say that I’m going to charge double what Writer X is charging, even if the amounts equal out to being the same, I’ve found some clients that are just like “your rate is way too high.” Explanations don’t seem to help, because the actual number of the hourly rate turns them off right away. So, I try to avoid making bids by the hour.
Also, some clients that I’ve worked for would rather pay minimum cost for low quality writing than pay me a reasonable cost for high quality writing. I know that some SEO content doesn’t need to be Hemingway quality, but man it’s frustrating when clients turn you down because they don’t care about quality.
William Wallis
August 19th, 2011 at 1:28 pmQuote” Too many companies think the work just takes a few minutes and that you’re over charging them.’ SO TRUE!
Clients will often ask you to provide an hourly quote for photography (in my case) or a day rate. Personally I do not have much of an issue with a day rate because you can leverage it depending on factors such as usage and complexity.
I don’t charge an hourly rate rather I charge a “per job fee”.
Admittedly, in my mind, I will often base this on what I feel I am worth an hour. However I do not tell my client what that hourly might be.
Here are the reasons I give to clients on why I do not charge an hourly rate.
“The reason I don’t charge an hourly is because I am able to get a good photo within 5 minutes. This is due to my experience and technical know-how.
Also, I have to consider fixed-cost factors like my studio rent and equipment.
Usage is also a factor. These photos are used in advertising and on the website. This gives them a value because of the amount of views they receive.
One last thing that goes into my rate is software costs and the post-production editing time and delivery.
Jason
http://www.wallisphoto.com
Ted
August 19th, 2011 at 6:28 pmI’ve made it a point to go after clients who have at least 2 years history working with designers. If they’re new at it, I pass them onto someone else. Ignorant/inexperienced clients balk at prices that’d be too low during the *1930s* and waste too much of my time.
David Airey
August 22nd, 2011 at 10:17 amHi Dave,
In the words of Paula Scher, “It took me a few seconds to draw it, but it took me 34 years to learn how to draw it in a few seconds.”
There lies the problem with charging by the hour. I recommend charging a set project fee. The client will prefer it, too, as s/he knows how much is being spent before agreeing to proceed.
Issa @ Ajeva
August 22nd, 2011 at 11:28 pmDave, I’m glad you wrote about this… as many freelancers get duped each day by working for free, hoping that they will land their dream project for real. I’ve never worked for free though and I’m an avid follower of the No to Spec Work campaign, as I go by the words of Benjamin Franklin, that ‘time is money’. There are definitely other ways to go the extra mile without devaluing yourself and as long as there are freelancers willing to become a sacrificial lamb on the freebie-lancing table, the abusers won’t simply stop taking advantage of them.
Ergo: Just because there’s the word ‘FREE’ in freelancing doesn’t mean we do work for free…
Daquan Wright
August 23rd, 2011 at 10:33 pm@Travis: If I were you, I’d refuse to work with those clients. You don’t do low quality work for a low price, you do high quality work for a fair wage (this should be your mindset). There are many unworthy clients and those that choose to walk away, are saving you hours of headaches you would otherwise be forced to endure. Seek out people who desire high quality content and put yourself into that niche. You don’t need every job and you certainly don’t want low quality content in your portfolio. When a good client comes along and sees that, it won’t impress them. In the long run, working with bad clients is like a poison.
I’m a part-time user interface designer/app developer and a CS major. While I have a lot to learn, I’ve learned a ton. Do you know how many steps (general, not entire) there are for building a web app? My general format is like this: information gathering (user requirements/app requirements/client requirements) > sitemap/wireframe > ui design > html frame > ui implementation > css > user interaction > server-side programming > database integration + business logic. And that’s not even all of them, companies have more processes.
I talked to a friend in a southern state who makes $20/hour for programming at a specific company. While he makes that much for programming, he thought it was OK for me to do site for $100 for my mother, and $200 for everybody else. I said my starting point (since I don’t have a blog or portfolio especially) will be $300, and he said he’d build it himself. This is clearly the case of ignorance (no disrespect to my friend, I educated him ;) ), so these are people who you either need to be willing to educate or just bypass altogether. Better yet, with a rock solid portfolio and blog, demonstrate your knowledge and worth. Good clients will respect your demonstration of knowledge and expect to pay you fair wages.
nettuts ran a poll asking people who much they charge for their services. A large number charged between $30 – $75/hour, but balked at people who were charging $10/hour. This illustrates two things. 1) The barrier to entry on our field is very low. 2) People who have acquired knowledge but lack the confidence to portray their knowledge to the world seem to fear raising their rates. Doing one website in a week @ $300 is the equivalent to doing web work for $10/hour (barely survivable in New Jersey). Many students are often charging these prices, even when they are worth $15 – $20 / hour. Once my site is established (meaning my blog/portfolio/testimonials), I’m going to establish my set starting rate on particular projects and my work will target a specific type of client as well. I want to work with people who respect my knowledge and the quality of work I bring to a project, along with the results. I don’t want to be interested in people who don’t respect what I have to offer.
How would it feel to work at Google as a software engineer and get paid $30,000/year? Google respects their employees, and your clients should too. Both in who you are and what you bring to the table. The more I think about this, the more I think everyone should be charging (to rate the status of web workers in particular those who don’t have a command over a particular segment of the market). You must respect yourself, your skills, and the benefits you provide. I know it’s scary, I was scared too, but I learned not to be. If you’re brave, you can cut through the blackest abyss. :)
Dave Thomas
August 25th, 2011 at 6:29 pmThank you to everyone for their feedback. Like anything else in life, each situation needs to be reviewed individually. I have found the majority of people I have freelanced for over time to be reasonable. As the cost of living goes up, however, they too need to be willing to accept that a freelancer’s rates will likely rise.
Freelancing
August 27th, 2011 at 2:37 amA freelancer, freelance worker, or freelance is somebody who is self-employed and is not committed to a particular employer long term. These workers are usually represented by a company or agency that assist them in finding contracts or work. Freelancers are “declared” public contractors who specialize in many different fields.Freelance practice varies greatly. Some require clients to sign written contracts, while others may perform work based on verbal agreements, perhaps enforceable through the very nature of the work. Some freelancers may provide written estimates of work and request deposits from clients.Payment for freelance work also varies greatly. Freelancers may charge by the day, hour, or page or on a per-project basis. Instead of a flat rate or fee, some freelancers have adopted a value-based pricing method based on the perceived value of the results to the client. By custom, payment arrangements may be upfront, percentage upfront, or upon completion. For more complex projects, a contract may set a payment schedule based on milestones or outcomes.
Gordon Mitchell
August 28th, 2011 at 11:08 amWe discourage the crazy low figures bidded by freelancer’s based in countries with hardly any living standards.
We will not allow any Job Posts that fall below certain $ Values in a bid to encourage better salaries for freelancers.
Site is in its infancy but already we have over 160 Freelance Jobs and we will be running future campaigns to increase this number to 4 figure sums.
http://www.freelancer-market.com
Daquan Wright
August 28th, 2011 at 1:57 pm@Gordon: I’m happy you’re doing that. People in our field shouldn’t make below a certain amount and anything done to move it in that direction is awesome. That’s why people from countries with a high standard of living struggle to compete, simple because of the different in geography and what people in certain countries can live on.
RobbyDesigns
August 29th, 2011 at 2:02 pmWhy work for free when you could get a whole $5 for a 126page brochure design with Freelance Bidding sites
Trackbacks