THE TACTICS THAT WILL MAXIMIZE YOUR REVENUE

Increasing your rates is an important part of growing as a freelancer. However, if you already have an established client base, this can be a bit of a tricky subject to tackle. We’d like to offer a few tips for dealing with the situation effectively. Therefore, what is the best way to bring it up?

First, it is important to consider why you want to raise your rates. This can include things such as:

• You are currently undercharging compared to the rest of the market
  
  
• You have in-demand skills that should be properly compensated for
  
  
• You are doing too much extra work for your clients whether that be restarting projects from scratch to other small projects for your client
  
  
• You are working with a marginal client that didn’t hire you for your unique skills but just for some basic work

These are all some great reasons that you might want to increase your rate. However, don’t just increase your rate because someone told you it was a good way to make extra money.

Now that you have decided to increase your rates, how do you bring this up with your existing clients?
First, it is always best to be direct. Don’t bury the news in a long email or text message. Rather, set up a call where you directly talk about the topic.

Second, give them enough notice. No client wants to find out about a rate increase that goes into effect immediately. Rather, be flexible and give them some time to prepare for the new change.

Third, let your client know what they will be gaining. They don’t want to pay more money for the same services. Rather, focus on how the price increase will benefit them.

Fourth, convey your worth to your client. To avoid the possibility of rejection, you need to make sure that your client fully understands your position and what you bring to the table.

Fifth, be picky when deciding which clients you will raise your rates with. For example, with marginal customers, you might only want to slightly increase your rates or potentially not at all. However, with clients who are seeking you out for your unique skills, you should increase your rates.

Naturally, you will get some clients who will say no, when you propose increasing your rates. It is only natural to have some amount of rejection. However, if you have followed all of the previous tips, and they still said no, maybe it is best to part ways. If those clients can’t recognize your worth, it is better to focus on the ones who do.

As a freelancer, at some point, you will probably meet difficult clients. Perhaps they are never happy with your work or fail to pay you on time. It is important to know how to deal with these clients. What can you do to minimize the complications with these ‘clients from hell’?

First, it is important to understand that not all difficult clients are the same. They can include:

• Inconsiderate clients who don’t think about the impact of their choices
  
  
• Indecisive clients who can’t make up their minds
  
  
• Unsatisfied clients who keep on pushing you, but refuse to pay

So how can you deal with these different kinds of clients?

First, completely avoid the problem. The best way to do this is to make sure that both you and the client are 100% aligned on the expectations for the project. This means that you should never start working until you both have written up and signed the contract.

Second, it is important to define your relationship from the very beginning. Lack of communication or miscommunication is often one of the biggest sticking points in a difficult working relationship. This means that you should discuss what you both believe an efficient and successful working relationship looks like.

Third, make sure to keep the lines of communication open throughout the project, not just at the beginning. This means asking for your client’s feedback to make sure that you are meeting their expectations. In addition, you should also work on collaboratively solving problems. By doing so, you help build more trust, resulting in a win-win situation for everyone.

Fourth, before coming to conclusions about your client’s actions, ask for advice from your freelancing peers. They might have already dealt with a similar situation and can help you.

Fifth, don’t be afraid to walk away. If you have tried everything else, but still are having troubles with your client, it is best to part ways. It might negatively impact your income, but at the end of the day, your working conditions matter too.

In conclusion, as a freelancer, it is inevitable to have some difficult clients. However, with the proper strategy and being clear from the start, you can mitigate the risks.

As a freelancer, late invoices or no payments is not fun. It often forces you to be creative with your finances rather than creative with your work. Therefore, how can you use some data-backed strategies to help you get your invoices paid faster?

According to a study by UK SMEs, 51% of respondents say that late payments are a bigger problem than 3 years ago, 58% say that late payments have put their business at the edge of failure, and 51% of business owners had to dip into their savings to cover the deficits brought on by late payments. Additionally, according to Bonsai estimates, 29% of freelancer invoices are paid late. A PayPal study also showed that around half of US-based freelancers have not been paid at least one time.

Needless to say, late or no payments are a big problem for freelancers. Fortunately, there are several effective ways to reduce late payments.

The easiest way is to clearly state the payment due date on your invoice. The two main types are due upon receipt and Net D payment term. The ‘D’ stands for the number of days your client has to pay (7, 14, 30, etc…) According to a Xero study, invoices with a shorter payment term tend to be paid faster.

Building on the previous point, the client will often miss payment due dates. An effective way to reduce this is by including a late fee clause in your contract. Typically, this can be anywhere from 1% to 5% of the total fee. However, be warned that many clients might not be very happy to see this clause in the contract.

Sometimes, with larger projects, one of the best ways to speed up payments for invoices is by billing them in installments. According to Bonsai research, invoices of less than $1000 are settled much quicker. This can be especially helpful for smaller clients that might have cash flow difficulties.

While no freelancer wants to appear impatient and demanding when asking for a payment, sometimes it is a necessary evil. For your clients, paying invoices often falls through the cracks and they might innocently forget. A great way to make sure they don’t forget is by setting up automated payment reminders. This includes a gentle reminder before the due date, a first overdue reminder 5 business days after the due date, and a second overdue reminder where you are more direct and warn your client about potential legal escalations.

Lastly, a great way to speed up the payment process is by offering an early payment discount. This is very common for five-figure invoices and can range from 1% to 2% of the total invoice. It can help incentivize your clients to pay early.

However, to avoid your clients questioning your pricing, pair your discount with a quick favor request. This can be something as simple as leaving a review. According to The Georgetown University McDonough School of Business, favor requests greatly increase the acceptance of favor offers as your customer doesn’t look at is a ploy to sell but as a reciprocal offer.

In conclusion, don’t leave money on the table and follow these data-backed strategies to help get your invoices paid as quickly as possible!

Working as a freelancer is great! You get to choose what you work on and when you have to work. However, this freedom comes at the cost of reduced financial security. So how can you choose the appropriate hourly rate to avoid this issue?

First, it is important to evaluate your industry. The average hourly rate for freelancers is $21 per hour; however, this rate depends on the industry that you are working in. For example, a freelance web designer makes on average $23 per hour while a language translator makes on average $17 per hour. However, don’t let competitor’s rates be the only factor you consider when determining your hourly wage. Rather, use it as an indicator to help ensure that you don’t price yourself out of the market.

Second, it is important to understand what a “full-time” salary means. If you work for a company full-time, the salary you are making only accounts for about 2/3 of how much it costs the company to employ you. In other words, if you are making $66k per year, it probably costs about $100k per year for the company. This is because most companies also pay for a variety of other things including:

• Healthy insurance
• Paid time off for vacation
• Tools and resources
• Free perks

Third, consider your administrative time. You don’t spend 100% of your time working on your client's projects. Rather, you also spend time on administrative tasks such as preparing estimates, brainstorming, and invoices.

Fourth, make sure to include your expenses. These could be things such as:

• Renting an office
• Utilities
• Office supplies
• Insurance
• Marketing

Fifth, identify your expertise. If you have many years of experience in your field, your hourly wage should increase accordingly.

Sixth, after putting all of these things together, the only thing left is to test the waters and adjust as needed.

In conclusion, going from a full-time salaried job to a freelance job can be difficult. If you simply take your desired salary and divide it by 40, you are going to find yourself in a bad place. If you still need a bit more help in determining your hourly rate as a freelancer, check out this online calculator.