I was delighted with my freelance living. My “Portfolio Career” of seven different careers kept me busy and making enough money to cover expenses. I enjoyed everything I did so much that I felt like a success. That was until the woman who prepared my taxes pointed out that on paper, I had not made a profit. With all of the different careers, I spend most of what I earn on business expenses. It was time for me to make a profit - and not by reducing my expenses, but by increasing my fees. In this article, I address the area of fees for free agents, independent professionals and freelancers.
Even if we love what we do, we need to earn a living. To get ahead - and not to have the IRS think that what I was doing was a “hobby” - I needed to re-evaluate my fee structure. As Dana Cassell writes in her excellent book, How to Set Your Fees as a Freelancer or Independent Consultant, “One of the most important questions you'll face as a freelancer or consultant is how much to charge for your work. Too high, and you could price yourself out of business; too low, and you'll be cheating yourself. This clearly requires some thought. ”
You are worth more than you think you are! These are the words my tax preparer said, and I am sure that it is probably true of many free agents, independent professionals and freelancers. We don’t consider our background experience, our education and the time we have taken to get to our level of expertise. We are afraid that when we tell a prospective client what we charge, they will gasp and run the other way. Some will, but I have found that many feel that, “you get what you pay for. ” If we price our services too low, we may be downgrading our credibility. Many freelancers I know who have started charging more than before have found that they are hired even more often after the fee hike.
There are many different ways to figure how to set our fees. Approaches vary from hourly rates, project rates, and one time fees (for example: for a workshop, presentation, special report, e-book, or tele-seminar). If you have several different careers as I do, you may set different levels for the different types of jobs. For example, I can charge quite a bit more for my web design and development than for the fitness classes I teach and the storytelling programs I do. In this case, I must consider the “going rate. ” Unfortunately, as a speaker I can charge more than double what I do as a storyteller - this is due to perception and the type of client.
Be strong enough to turn down a job even when you need the money. We’ve all been there. Times are tough, and we aren’t sure where the next paycheck is coming from. We are offered a job that will be long on hours, but short on pay. I know how hard it is to say, “No. ” It is not a good idea to compromise yourself or your fees in times of panic. If we are patient and believe that the work will come (and, of course, we are constantly marketing ourselves so potential clients know about us and what great stuff we do), it will. Note: I can say from experience that this is true and has worked for me.
So, reconsider your fees. Charge what you are worth. And have a happy tax preparer.
Chris King is a free agent, professional speaker, storyteller, writer, website creator / designer, and fitness instructor. You will find her freelance living website at http://www.freelanceliving.com and her business website at http://www.creativekeys.biz