My freelance lessons series looks at the lessons, best practises, and rules that I have learnt during my first four months as a freelancer. Part 3 of the series looks at day to day business.
Quoting
- Experiment with pricing schemes. Time based, value based, retainers, time based with a cap. There are lots of ways of charging and if you experiment you get a feel for what is appropriate for a given project.
- Don’t be afraid to charge different rates for different clients. Clients require different levels of support and come with different expectations. Understand this and quote accordingly.
- Don’t be afraid to ask for a client’s budget for jobs which are open ended. With knowledge of the budget you can produce a realistic proposal rather than guessing at a feature list and price point.
- Give your client options at different price points e.g. basic, top-end.
- If you don’t want to do a job quote high. Doing something you are not interested in is far easier when it is paying well.
- Factor in all the costs e.g. communication, accounting, expenses etc when quoting. I have been caught out on small jobs because I didn’t factor in the time spent communicating with the client.
Invoicing
Invoice on 10, or less, day terms. 30 day terms are far too long for a one person freelancer.- Collect 30% upfront for multi-day projects to help your cash flow and protect yourself.
- On larger projects create a payment schedule.
- Relax payment terms for loyal clients.
- Shorten payment terms for new clients.
- Invoice as soon as the work is complete to improve cash flow.
Accounts and finances
- Work out your tax and put money into a saving account each month. Trying to find the money at the end of the tax year is an awful situation to be in.
- Use one of the great accounting web applications such as FreshBooks.
- Put money aside for holiday pay each month. I had a holiday planned but suddenly had a rush of work. After working out the cost of the trip + the loss income my one week holiday looked staggeringly expensive. I ended up cancelling the holiday which was painful. Had I of set money aside to cover my pay as well as the trip itself I would of had no problem turning down the work and going.
- Put money aside for sick pay. There is nothing worse than feeling you have to work when you should be in bed resting.
- Accounts are actually really easy for a one man band.
