Freelancing 201

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My last post on freelancing focused on some basic concepts that you need to know when entering the professional marketplace. Based on the popularity of that post, I thought I'd tackle the second phase of a freelancer's career. If you haven't read it already or want to refresh your memory, you can read it here.

Now if you've been freelancing for a while, you are going to come up against 2 issues. One, how do I increase my rate, and two, how do I transition from being a hired gun to running my own design firm? Let's tackle this one at a time.

How do I know when to raise my rates? If you're working consistently and in high demand at a few different companies, it may be time to raise your rate. Rates are a matter of supply and demand. If you're in high demand and there's a limited supply of people doing what you do, then charge more to control demand. A good indicator of this is when you are on second and third hold at a handful of companies.

In the motion industry, we typically work with people on a day rate. So if your rate is $300/day and you find yourself never having to solicit work from new or existing clients, it's time to start asking for more money. The next company that calls to inquire about your availability, let them know that you're interested in working with them, but raise your day rate. I recommend increasing your rate in $50 dollar increments. So in the above example, your new rate would be $350/day. If it's an existing client that calls, let them know you have recently changed your day rate as reflected by your experience and abilities. They will have to decide if they can afford you or not, but a $50 increase won't be a deal breaker for most.

The key is to not to raise your rate too quickly or by too big of an amount. This creates undue pressure on you to deliver. This can sometimes strain a perfectly good relationship that otherwise would have been fine. 

Under promise. Over deliver.

Work at that rate for some time and see how people are responding to your work. Take a look around the shop and see how your work stacks up against others. As long as you're at or above par compared to everyone else, you should be in good shape. I've seen this happen to many freelancers before where they “hear” that the going rate is $x. The big problem is that most people lie about their rates because they want to appear more successful than they are. Day rates get inflated this way. The bigger problem is when you show up to work and the company's expectation exceed your skill level. Not a good situation to be in. Remember, you can't afford to burn a relationship before you find yourself in the second or third tier of design companies.

You can continue working this way for some time and gradually raise your rate as you go. But at some point, you will hit a ceiling of what a particular job can go for. When you do, you may consider taking the next step.

By now, you may have been in the industry a few years, worked at a number of different shops and have been an integral part of projects from beginning to end. It might be time to start looking for clients. If that's the case, you are embarking on the next phase of a freelancer and begin the transition into become a solopreneur.

There's a subtle but important difference  between being a freelancer and a solopreneur. A solopreneur works with clients directly and not for another design shop or agency.

Setting up shop for yourself can be very rewarding. You will earn more money, manage your own work schedule and be more in control of the creative direction of projects. This is the side of running a business most of us fantasize about. I'll make a ton of money, work when I want and only work on great projects. 

The reality is something quite different. You'll have much more pressure. You'll need to learn how to: market, negotiate fees with clients and vendors, bid projects, bill clients, do basic accounting, provide good customer service and manage difficult clients. Fear not and don't be discouraged. The rewards are worth the work for those who have a stomach for it. In my next article, freelancing 301, I'll address these issues.

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Chris Do
Chief Strategist/Founder Blind
Cofounder The Skool