The most essential part of work for any freelancer, or even small business owner, is often the most difficult part: getting paid. There are more than a few areas where you can run into problems that have your bank account hurting.
Most people don’t want to part with their money and you may find yourself fighting for your fair share. If you’re working online, you have to deal with all of the middlemen involved in getting paid. It’s a lot to consider.
The issue is more complex when you have to manage it all on your own, but there are a few things you can do to make your life easier and your bank account happier.
1. Set Fair Prices & Don’t Undervalue Yourself
The most important step to securing your financial security begins with you.
Freelancers and small business owners tend to do one of two things: they charge too much, or more commonly they don’t charge enough.
Charging too much can be a big problem. Freelancers and small business owners know that the market can be feast-or-famine, and it’s easy to react by setting your prices high to cover your downtime.
The thing to consider here is that you might be driving away potential customers. Never charge less than you’re worth, but remember that sometimes it’s better to have consistent customers providing you with a steady stream of work rather than one or two huge clients.
Not charging enough is natural for people just getting started. When you don’t have a lot of experience, you can’t necessarily command the best rates, but you shouldn’t short-change yourself, either.
To figure out what a fair price for your services is…
2. Figure Out Your Hourly Rate
Whether you’re going to charge by the hour or by the project, you need to figure out how much you need to make per hour to live. Then figure out how much you’d like to make. The two numbers will most likely be different, and that middle ground is going to be your answer.
Check online for people in your industry talking about their own rate of pay and compare your experience with theirs. Factor in any schooling that went into your skillset, along with any experience you have.
3. Make Paying Easy
People don’t like to part with their money—but we’ve been over that already.
You can’t change that, but what you can do is make it easier for them. The more complicated a payment process is, the more likely a client is to put it off, and put it off, ultimately delaying your payday.
Those who are doing freelance work with clients face-to-face, or those who own a small business, should consider using a mobile pos (point of sale) service to make payment easy. This way, you don’t have to hope the client has a check, or cash, and you can be sure you get paid.
Freelancers and small business owners doing work online should streamline the process as much as possible by using services like PayPal. Many banks now allow for transfers via e-mail as well. Look into your options and make sure it’s as easy as possible for you to get paid.
4. Keep a Schedule
Getting paid can be inconsistent at times. Some weeks you’re going to be busy and raking in cash, but other weeks you’re going to go through dry-spells. Save yourself some stress by setting a schedule for how much you need to make each week.
Take this downtime into account by setting aside additional funds during times when you’re making extra money. This rainy day surplus will help you make it through the leaner times. As a result, you won’t feel compelled to take just any job, and you’ll feel more confident.
Remember to plan the amount of money you earn in a week around the fact that services like PayPal can take a few days to render your funds. There’s nothing worse than expecting the money to be there and not having the funds when you need them.
5. Per Project vs Per Hour
This is a concept that a lot of freelancers struggle with. There’s back-and-forth to be had about which method is the most efficient or profitable, but at the end of the day it’s usually best handled on a case-by-case basis.
If you’re working with a client that you intend to be working with regularly over a long period of time, it can be much easier to set up an hourly payment plan. This lets you find out how many hours you can work in a week and plan on having a certain amount of income every week.
If you’re just doing a project or two, it’s almost always easier to charge one sum to ensure you get paid an appropriate amount for the work you’ve done. Sometimes projects go by quickly and you put in more effort than it shows on the clock, meaning you unintentionally take a pay cut.