I recently wrote an article about how freelancers can get more clients and keep current clients. Today I would like to address some other factors that come into play when it comes to your freelance business being successful.
I will touch on the following topics, as they relate to your freelance business:
1- Billing, Invoice and Rates
2- Legal matters
4- Proposal Writing
5- Project Estimation
Let’s get started.
Billing, Invoice and Rates. You earn your living through your freelance business. So this is the most important factor of the business. If you do not do it right, then the consequences might have negative impacts on your freelance business. Setting your rates might be hard if you are just starting. You might have a hard time adjusting to the fact that you have no clients and as a result people do not really know what you are capable of.
At the same time, you might well be really efficient at what you do. So how do you reconcile the two sides and lay down the foundation for sustainable rates to keep your freelance business going?
A very good way of doing this is to check out what other freelancers are charging based on various factors, including their experience, skills, technology packages, etc. Also, you need to keep in mind that your rates should be low to start with. You will need to increase your rates on a yearly or so basis.
The other major item in getting your income has to do with billing. More often than not clients will want you to give them bulk quotes for projects. In other words, they will want fixed fees. As a starter, you might fall into the trap and underestimate projects. Well, if you do, you will lose! So unless the project is ABSOLUTELY trivial, you should bill your clients for materials and time.
A good invoicing approach is to invoice your client upon completion of milestones. In fact, you need to make sure that the client approves the completed milestone and is happy with it. If so, then they will deliberately execute your invoice and pay you. Whatever method of invoicing you choose, make sure it is made known to the client beforehand. Also make sure that clients understand that payments for work they approve are final and are NOT reimbursable – in the event that the client would want to discontinue the work.
Legal Matters. You should always use work contracts whenever applicable. Even for subsequent changes to a given project, you need written/signed documents. Not all your clients will behave nicely all along. You need to have your assets protected by having a lawyer you can use for legal matters. Do not underestimate this factor of the business. Things happen!
Tax. If you are not good at doing taxes, you need to have someone who knows that stuff do it for you. You do not want any trouble with the IRS or such. Make sure that you income is documented to help smoothen the tax process.
Proposal Writing. This is another major component of your business, as it determines how successful you will be at getting clients. You need to detail out what will be involved in completing the client project. Make sure you fully understand the requirements. Include a summary of the requirements in your proposal. You should also include rough estimates of project completion – with disclaimer that it is not a final estimate. Clearly state the packages that will be used to complete the project, that is, software/tools/technology/etc.
Project Estimation. Yet another key factor in maintaining a sustainable freelance business. Clients will be happier when you deliver under budget than over budget. So stay away from bulk quotes for large projects; they will take time! The most important thing about project estimation is getting a full understanding of what the client wants and needs. Unless you have that well sorted out, you should not provide estimates. So talk to your clients about their requirements, ask questions, take notes and exchange emails to confirm.
The above factors are the major players that can determine the success of your freelance business. If you play with them correctly, you should have a smooth freelance business. Your clients will be happy, and you will be happy as well.
So review your freelance business and find out which adjustments you need to make. Good luck!