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Summary:

When we took our first steps in this world, our feet were unsure and our legs were struggling. The same could be said for freelancers who are venturing onto the web working path for the first time. There are bound to be mistakes and struggles on […]

425341_a_start_of_a_runnerWhen we took our first steps in this world, our feet were unsure and our legs were struggling. The same could be said for freelancers who are venturing onto the web working path for the first time. There are bound to be mistakes and struggles on the way, making us feel that we aren’t ready to go pro yet.

It’s good to remember that everyone has felt like that at least once in their career. Almost all freelancers have a story to tell about the mistakes they made and what they could have done to avoid them.

Equipment and the Home Office

After one of his first meetings with a client, fellow WWD blogger Scott Blitstein wanted to send his client a questionnaire to assess their needs. When he asked them how they preferred to receive the questionnaire, they opted for fax instead of email.

Realizing that he didn’t have a fax machine handy, Scott decided to buy one on the way home. “I think I’ve only used it two or three times since then, and only because I had it,” Scott said.

While it’s important to have a fully-equipped home office, we should also have a realistic idea about how often we’re going to use each item before purchasing. This prevents us from overspending on equipment when we’re starting out, without under-equipping ourselves.

Dealing with Clients

Ruth Thaler-Carter is a freelance writer and editor. When starting out, she worked on a project where she made a profit of “next to nothing.” She explains, “I didn’t confirm who would be responsible for printing and mailing a newsletter I was contracted to write, edit, lay out and produce for print. It never occurred to me that the client would expect me to pay for printing and mailing.”

As Ruth’s example illustrates, one of the most important aspects of client-consultant relationships is the list of deliverables. This list indicates who is accountable for a task and when it is due. Without this list, it’s hard for both the client and the freelancer to identify what their areas of responsibility are.

Money Matters

Elena has been a freelance writer and editor for 11 years, but when she started out she was a far cry from the veteran she is now. Initially, she was billing her clients after every long-term project was completed. This left her with poor cash flow and clients who weren’t submitting their deliverables on time.

Elena decided to bill clients monthly. “Every month, I bill for work I’ve done in the last month. That way, if things sit, at least you got paid, or you can refuse to continue the work until you get paid,” she said.

How to charge for one’s services is a decision that beginning freelancers face. As Elena notes in her story, it’s important to bill regularly for big projects. But how do you charge? Charging by the hour is hard for both parties to track.

One thing that has worked for me all these years is charging per milestone. This is because the deliverables are defined, and the client pays based on the results I produce, not how much time I spent on it. If you set the rates right, your fees per milestone can reflect your ideal hourly rate anyway.

After you’ve decided how to charge, another question comes up: how much? This tends to be a hotly debated topic among freelancers.

David, a legal consultant, said that he was embarrassed to find that he was charging half as much as his competitors. “Upon mature reflection, I left my rates unchanged. I have never been short of work and I have always earned enough,” David said.

I have an alternative story to tell about undercharging. Early in my online writing career, I would see other writers take jobs for $1-$2 per article. This made me nervous as I was charging $8 to $10. If I had cut my rates, I would be taking a loss. So I stuck to my rates and focused on finding the types of clients who wouldn’t be swayed by price alone.

Perhaps the best amount to charge isn’t a specific number. After all, several factors come into play:

  • how much your client is willing to pay;
  • what everyone else is charging;
  • how much you’ll need for business and living expenses;
  • and what rates you feel are “fair” to both you and the client.

Keeping this in mind, there is no right amount to charge, there’s only what’s right for you.

Your early web working career will always be unsure and full of mistakes, no matter how well you plan or research. By learning through other people’s experiences and hearing about their humble beginnings, then maybe your first steps as web workers won’t be as awkward – and even if they are, rest assured that it’s quite normal.

What about you? What mistakes did you make as a beginning web worker? What could you have done to avoid them?

Image by Michal Zacharzewski from sxc.hu

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By Celine Roque

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  1. Great post! I’ve had a *few* occasions in which having a fax machine would have been helpful (so I would not have had to drive over to the local print-shop place to pay to use theirs), but those occasions have thankfully been rare. I’m glad I didn’t jump on the bandwagon and buy one when I was starting out. It would have been collecting dust.
    Also, you comments on setting rates was well put. If we keep on chasing the bargain-basement competition, we will price ourselves into the poor-house. Decide for yourself what you want your annual income to be, estimate that if you are freelancing you may be able to have actual “billable time” of half of the available standard time (2000 hours X 1/2 = 1000 hours). Divide the annual income you’d be willing to live on by those 1000 hours… and you get your billing rate.
    Like you said also, it may be tough to charge by the hour… so charge by the project milestones (which are more “measureable”). On large projects get 1/2 fee up-front–especially nowadays.. many companies are playing fast and loose with payment/non-payment schemes. You do the work and send an invoice and you never hear from them or see them again. So make sure you are covered.
    Thanks again for reminding me of the basics that all small/home businesses should know.

    Sincerely–
    Dave Gardner, CCNA
    Editor-Writer

  2. Also, your comments on setting rates were well put.

    Can’t believe I did that.

    Thanks again. Need more coffee.

  3. My own thoughts not already covered in the article:

    Client relations:

    Working on remote demands that you check in with clients on an established schedule, perhaps even daily. Doesn’t matter if you have no progress to report; the alternative is to leave them under the impression that you’ve forgotten about them.

    …And if my LinkedIn answers are any indication, something even more important than lists of deliverables is a proper assessment. It amazes me how many clients announce themselves as prospects before they’ve figured out what they want.

    Bill rates:

    The more you charge, the more you winnow down your pool of prospects.

    The more you charge, the more likely the client will be to value your service (all other factors being equal).

    The more you charge, the higher will be the client’s expectations (which can actually be a good thing).

    In the end, the principal guidance to one’s effective bill rate will come from what the market will bear; if your revenues come mostly from local SMB’s, you probably won’t be able to charge as much as if you’re working with larger clients in a variety of geographical markets.

    Also – the sentiment of the linked comments seems to be that utilization measurement is bunk, but I strongly disagree. If you track your hours for a week only to discover that you’re only doing three hours of billable, non-bizdev work in an eight hour day, it tends to be quite a wakeup call. It remains if you bill by project, because time flies when you’re slogging through change requests.

    White elephants:

    Most of my white elephant issues always seem to point back to stuff I NEED a few times per year, but at almost no other time.

    For me printing is the biggest pain; the only things I ever need to print are contracts and memos requiring a signature. PKI can stand in for an actual signature, but if you try to direct them down that road, they tend to think that you’ve grown a second head.

  4. Thanks, especially for the link to ‘how to charge’ that’s a huge question I get asked a lot by former students. Chris

  5. On the fax machine issue: when I started out, I needed a fax machine (to fax a contract to Australia). I went down to my local print shop but their per-page charges for sending faxes overseas were outrageous. Instead of getting a dedicated fax machine, I bought an all-in-one printer and scanner, and then downloaded some fax software. It still gathered dust most of the time, though.

  6. @ben I think the question of how much to charge is a personal one, but I like to think I provide a quality service, and therefore charge accordingly.

    Also, I agree: clients not knowing what they want is remarkably common, perhaps because they do not have the/(any?) expertise. They just know they need to get a web site…

  7. My biggest mistake was delaying the decision to go freelance.

    In the late 60s I was a rare breed: a commercial programmer in the UK with a couple of years solid COBOL experience and some assembler too. I was also very good at it!

    Unfortunately I was frightened of being out of work. Stupid, I know, I was twenty and single. Anyway I waited another three years to take the plunge. I still did very well but missed out on the Saudi jobs which paid a fortune: friends came back and bought houses for cash.

    Hindsight and all that…

  8. WebWorkerDaily » Archive Web Work 101: Planning, Budgeting and Goal-Setting « Thursday, February 26, 2009

    [...] been following our recent Web Work 101 series, by now you know how to telecommute, what mistakes to avoid, how to find support, about joining groups, how to set up your office, and some of the tools of the [...]

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