The Freelance Mix: Balancing Time, Money, and Results
Posted January 13, 2009 in Business, How-To
A few weeks ago one of our authors, Jacob Cass, wrote an excellent article about the Fast, Good, and Cheap pricing method. The article points out that your clients can only expect two of those things, and can’t have all three.
This week, I want to talk about the other side of that equation — actually running your business, managing your resources, and doing the client work. Maintaining balance in all of this can be very difficult.
We have to choose where we allocate our time and money. We also have to account for that unsung hero — skill. All of these factors influence the results that we can offer to our customers, the prices we can charge, and even determine how our work will stack up against another freelancer or business.
In this article, we’ll take a look at the individual factors, different ways of organizing your resources, and how to make the most out of the situation.
Parts of the Freelance Mix
There are three main factors to consider when allocating your resources. Here’s a brief description of each:
Perhaps the most precious resource of them all, time is one of the biggest limiting factors for freelancers. With more time in a day, you could take on more work, make more money, improve your abilities, and life would generally be good. Of course, there are only 24 hours, and some of that needs to be sleep :-)
A close second behind time, money is again a big limiting factor for freelancers. If everyone had enough money, there would be no need to work at all hours trying to fit in more client projects. Money is a counterpoint to time — usually if you want to save time doing something, you have to spend money (and vice-versa).
Skill is another resource influencing your freelance business, one that may not be talked about quite as much, but is important nonetheless. A more skilled freelancer can do the same quality work in less time, thus making more money. Keep in mind that skill is not an absolute factor: investing time, and possibly money, can increase your skill level and change the whole equation.
The End Result: Quality, Cost, and Speed
Out of this mix comes the the final part of the equation: results.
Results are not only the product you deliver to the customer, but also the speed at which you can complete projects, and the cost involved in their completion (and therefore the customer’s cost as well). The results of this mix determine what type of business you’ll be running (budget shop or premium quality?) as well as the overall success of your freelance business.
The Right Mixture
While there is no right mixture, there are a few things that can make your life significantly easier. For instance, investing time and money into your skill level is almost always worthwhile.
Time and money are both limited resources, ones that are difficult to change, but your skill level is something that you can increase now and benefit from far into the future. It will take an upfront investment, usually time spent learning, but in the end it will improve the caliber of your work and increase the amount you can charge.
Another important consideration is the amount of time and money you take out of your business. You’ll certainly have to take some money and time away from the business, in order to relax and support your lifestyle, but it can be very hard to succeed if you take too much. This is often apparent when a freelancer is just starting out and barely making enough to pay the bills — it is much more difficult to grow when you need to spend every ounce of money coming into your business.
A Little Secret…
There’s a secret that allows you to break some of the rules of this equation, and it lies with a little word called leverage. Leverage means that time doesn’t always have to equal money, and you can sometimes get more resources to use than you should be able to (according to this equation).
The idea is to enter into situations where your time or efforts are multiplied, that way you can benefit from more time than you had to put in personally. An example of this is taking on a big project and then hiring a team to handle most of the work. You get paid for managing the project, and delivering the results, but you aren’t actually responsible for putting in all of the hours. If you do that frequently, you can get to a point where you make a significant amount of money while spending very little time.
There are some other forms of leverage that you can use as a freelancer, but I’m going to save the details of them for the new Unlimited Freelancer eBook. It’s going on sale in less than 24 hours.
Personal experience is everything for freelancers, and there are never two ways to look at a situation. How have you seen these concepts applied in your business? Do you struggle balancing your time, money, and results? What recommendations do you have for other freelancers?
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