The Ultimate Guide to Freelancing - Part 3

Published by 

W. Paul Alexander

for 

Better Call Paul

NOTE:  This guide is the property of another author who has asked me to reproduce it on my blog.  Therefore, even though this is not my work, I have the express written consent of the owner of this content, who has specifically asked me to reproduce it on my blogs; in exchange, the author will share my blog posts and articles on her site as well.  It is very long, but is very helpful as well.  Because of the length and the different topics discussed, I will be posting in multiple posts.  This is the third one, and will cover the topics below. 

ORIGINALLY APPEARED ON TOPTAL.COM, with whom I am in collaboration with regards to sharing articles between us and posting on each other's blogs.  

Plus, this is simply a great guide for those who are considering freelancing.  

So, here we go - 

Click Here - First post (Sections 1-3)

Click Here - Second Post (Sections 4-5) 

6. Getting Paid: How to Handle Contracts, Pricing, and Payment

How much are your skills worth on the freelance market? This is a question that’s kept many freelancers up at night, and there’s no clear answer. In this section, we’ll discuss contracts, pricing strategies, and payments to help make sure you’re getting the proper reward for your work.

Negotiating Freelance Contracts

Regardless of what type of freelancing you do, you’ll want to have a ready-to-go contract available to send new clients (larger clients may have their own standard contracts for freelancers; if this is the case, make sure to read the fine print!). Contracts should include detail covering the scope of work, deliverables, deadlines, fees, information on work ownership, and the duration of the professional relationship.

Contracts are agreed to on a case-by-case basis. "You’ll negotiate how much up-front, how much based off of milestones," says Laurie. "Sometimes it’s 20% or 50% upfront, depending on the duration of the work, with progress payments along the way, or a retainer." If you’re not operating through a talent network that negotiates price and terms for you, this sales aspect of freelancing is something you must get comfortable with.

Pricing Your Freelancing Rate

Finding a fair pay rate isn’t just important to your wallet, but the key to your professional learning and work experience. "The best-paid jobs are usually the most motivating, most interesting," says Lucas. "Sometimes raising prices protects you from disappointment since people pay the value they think they’re getting out of you." Our experts found their price point through trial-and-error and looking at their peers in the market. Below, we provide some expert-sourced recommendations for finding your ideal rate.

Analyze the Market, Assess Your Ability

"I was terrible at this starting out," admits David. "Charging $20 or $30 an hour, not factoring things that took my time but weren’t clearly billable time." As David figured out how to properly track his time and continued adding new clients, he found his rate range through studying the market, assessing his skill level, and thinking carefully about each project. "I’ve learned from my own experience, from other people’s experience, and reading books. I’ve looked at survey numbers to figure out what the market is doing, then I’ve tried to place myself in that market, thinking about how competitive my skills are at this moment in time," says David. "I then try to factor in how much I want the job and how much work managing the client will be."

"The 80% Rule"

Rather than looking at the market in order to back into a price, Solon has a simple trick for making sure he’s capturing his value.

If you get more than 80% of the jobs you apply for, you’re priced too low. You need a bunch of clients to reject you. I closely monitor what percentage of jobs I get, and try to keep it to 80% or less.

Of course, to be comfortable rejecting jobs you need to financially position yourself in such a way that you don’t need to jump on every job offered, which Solon readily admits. "I’m negotiating from a position of luxury. If they want to walk away, they can walk away.

Every Client Will Be Different

You’ll quickly find that there’s no one-size-fits-all price that’s appropriate for every client for every engagement (or different engagements for the same client). "To me, it’s part of that sales job," says Laurie. "If the client wants a deliverable at a certain time, here’s my rate. Does that fit into your budget? Then you go from there, with a lot of back and forth."

Invoicing and Payment

As mentioned above, if you’re part of a talent network like Toptal, payment processing may be handled for you. If you’re not operating through a talent network or job board (or if you are, but they don’t handle payments), you’ll need to learn about invoicing. Create an invoice template to send to clients for work completed. If you and the client have agreed to an hourly pay structure, carefully track hours over the course of the engagement to make sure you’re getting fairly compensated for work completed. Ensure you’re set up to receive payments via ACH, bank wires, and PayPal, or use an online tool like TopTracker that offers free time tracking, invoicing, and the ability to receive no-fee payments.

7. Conclusion: Final Thoughts and Freelancing Best Practices

The ability to work as a freelancer creates enormous opportunity for highly-skilled and motivated individuals all over the world. This guide is intended to provide you with everything necessary to get your freelancing career started — now it’s up to you to begin applying for jobs and getting your first clients! Before we end, take a look at these final thoughts from our experts on how to sustain a long and successful freelance career.

Maintain Clear Communication with All Parties Involved

The person you negotiate your contract with may not be the person you’re reporting to. "It’s not unusual to be working for someone that wasn’t involved in the signing of the contract or defining the statement of work," says Laurie. "The expectations of the person you’re working with may be completely different than the description of the job agreed to in the negotiation." In cases like this, it pays to practice clear and regular communication with all parties involved to avoid complications down the line if the work changes. "If there’s a change to the work that was scoped and that you’ll be paid to do, you need to make sure the original person is aware of those changes."

Use Casual Calls to Stay in the Loop

While remote work enables you to design your best work day and focus to a degree an office worker can only dream of, you may find that you’re missing out on office chatter related to the project. "If you work remotely a lot, you don’t get to hear what’s happening around the office, which is a blessing but it can be a problem at the same time," says Lucas. "It’s hard to get all of the information that you need." To combat this, Lucas has found a solution in forming office relationships that are more casual in nature. "I try to grow relationships with people at the office and have one-on-one calls, like having a coffee," says Lucas. "At my current job, there are a few people I have casual calls with apart from my manager that help keep me in the loop."

If Something Goes Wrong, Figure out What That Was

If a client isn’t satisfied, take the time to figure out what went wrong. Not only will this help you to improve your work for future engagements, but it’s critical for maintaining healthy client relationships. "If you should be unfortunate enough to get a dissatisfied client, work your butt off with them to find out what went wrong," says Solon. "I’m willing to put in ten times the effort to find out from an unhappy client where I went wrong. In my ten years of freelancing, I’ve had only one momentarily dissatisfied client. Now, they’re one of my best friends."

Do Good Work, Treat People Well

Finally, a bit of sage advice from David that’s served him well in his freelancing career. "Do good work and treat people well," says David. "You can figure the rest out later."

Additional Message from the Original Author Inviting Top Talent to Join Toptal.com 

Join the Talent Revolution

If you’re a highly-skilled professional looking to launch a freelancing career, or if you’re currently a top freelancer looking to access engaging, remote work opportunities with the world’s leading organizations, apply to join the Toptal talent network!

Toptal is an elite network of the world’s top talent, connecting our community of the best and brightest in business, design, and technology with top organizations around the globe. Through Toptal, you can become a part of the top 3% of talent from anywhere in the world, on your terms. All Toptal clients are thoroughly vetted — only those with the budget, skill, and intent to hire make the cut.

So, that does it for the Ultimate Freelancing Guide.  Personally, I think it is very well written and deserves all the publicity it can get.  I am not 100% sure about joining Toptal, as I am only collaborating with them to publish their content on my pages in exchange for my content being published..  

Thank you for taking the time to read this.  I believe that it has the potential to help many people who are struggling in the work-from-home venue.  

Until next time. 

Deo Volente, 

W. Paul Alexander