Image licensed via Shutterstock / Olena Yakobchuk 2021 will be a challenging year for freelancers in many ways. But even if the economy declines, it’s not all bad news. Just like during the global downturn of 2008, brands will turn to individual freelancers rather than more expensive, overhead-laden agencies. And so there’ll be exciting new opportunities for independent contractors and small businesses. In short, this could be the greatest year ever for your freelance practice, as long as you grasp the nettle. And an important part of that means getting a handle on your finances and maximising your potential earnings and income. We’ve teamed up with online accounting software Xero , which helps freelancers automate and manage their finances, to bring you ten practical tips. Covering everything from raising your rates to getting paid promptly, this advice will put you on the right path for the year ahead. 1. Know your value Many freelancers stick to the same rates for years on end. But that makes no sense because the longer you work, the better at your craft you’ll become, so you should be charging more. Recognising this is the key to raising your rates confidently. This means that if existing clients baulk at the new rate, you’re willing to walk away and find others. As Ben Veal, founder and MD at Second Mountain Communications says, “Know your value and what your expertise is worth in the marketplace. Don’t be afraid to turn down work if this value isn’t appreciated by someone else.” 2. Test the market How do you know when to raise your rates? It’s partly a question of trial and error. You’ll only find out if clients will be willing to pay more if you ask them. Lakshmi Padmanaban , a copywriter for brands, says: “I’ve been following a thumb rule for raising my rates: if four back-to-back prospects agree to my rate without any negotiations, then it’s time to raise it.” 3. Sell your rate rise When you’re raising rates, put yourself in your client’s shoes. If they’re going to be shelling out more money, what are they getting in return? Matt Lamont, director of Out of Place Studio , recommends that: “When raising rates, write more about your specific offering in the proposal. Talk about the process, milestones, strategy, benefits, etc. And always send a nice PDF proposal specifically targeted at them. Show you value the client, as much as they should value your time.” Designer and artist Sally Wanless adds: “I have found if clients want something quicker, that’s a surefire way to increase the money you can charge them.” 4. Control your costs Of course, raising your rates is only one way to make money as a freelancer. Freelance video/audio producer Steve Folland suggests you also look at the other side of the balance sheet. “You can also make more money by checking your overheads, and making sure you’re not wasting money on things you no longer need,” he points out. “So […]
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