I’m noticing an interesting trend with each new crop of freelance writers. They’re earning money but they have no clue if they’re pulling a profit. They’re making ends meet, but they don’t necessarily have money to put away. Many don’t even factor in taxes or overhead which can be a rude awakening during tax time.
With that in mind, I’d like to offer up my brilliance for the day:
The purpose of any business is to pull a profit. If this isn’t happening, you may not be making good decisions…or you may not be aware you’re not making good decisions.
Here are some things to consider:
- If you’ve been freelancing for years and you’re still struggling to make ends meet, there’s a problem.
- If you pay the bills but you’re not able to put aside money for anything else, there’s a problem.
- If you started out with low paying clients to get your feet wet, and you’re still working for the same pay a couple of years later, there’s a problem.
Let’s the swap scenarios with the real world for a bit
Consider this: if you work for anyone, whether it’s fast food or a Fortune 500 company, there’s a good chance you’re going to get at least periodic cost of living increases in pay, right? It should be the same with freelance writing. As your skillset, client base and expertise rise to new levels, so should your rates. If things are the same for you as they were three years ago, you’re going to have to make some decisions:
If you haven’t raised your rates in years, you’ll want to ask yourself why. Is it:
- because you’re afraid of losing your clients?
- because you’re afraid clients will say no?
- because you don’t know what to raise your rates to?
First let’s explore whether you’re earning enough now.
Not only should you be supporting your family or supplementing your income, but you should also be able to stash something away for taxes, healthcare if needed, and business expenses. Ideally, you’ll also have something to put in the bank. If you’re not at least earning enough to put away for those business expenses, you need to charge more or find higher paying opportunities to balance out your lower paying opportunities.
Next let’s take a look at what you need to do to bring in more income:
You’ll need to assess a new rate of pay. What would you like to be earning and why aren’t you earning it now? What is the minimum you can charge and still earn a profit?
Now, most long-term clients won’t balk at a pay raise request, not if you’ve been working for them for a while at the same rate, and not if you turn in consistently good work and meet or exceed their expectations. They understand you need to make a profit, they’re business people too.
You’ll also want to weigh out whether or not you’ll lose clients if you increase your rate of pay, and if so, will you still be able to make ends meet. Negotiating is fine, but you don’t want your clients to have the upper hand in the pay discussion. You may have to walk away and find clients who are willing to pay your price if it means you’ll receive the rate and respect you deserve.
It’s just good business
It’s one thing to start out low, it’s another to stay low. All established businesses raise their rates periodically and you should too. If you’re not making a profit, you need to sit down and figure out the reason why. There’s more to life than just getting by.
Are you making a profit? If not, why?
