In recent years, freelance workers have reported a 40% increase in demand for their services. The freedom of freelancing offers you more flexibility and a better work-life balance. Plus, the ability to pick and choose working hours is becoming increasingly popular.
However, freelancing doesn’t come without its challenges, particularly when it comes to uncertainty around work and income.
But having a freelancing agreement in place can help you find security and avoid some of the most common freelancing mistakes.
What is a freelancer retainer agreement?
In short, a freelancer retainer agreement is a contract between you (the freelancer) and the company requiring your services. It guarantees a fixed amount of work for a set fee and means that you have the security of regular work and pay, whilst still having the freedom of being in charge of your own hours.
Why you should set up a retainer agreement
1. Guarantees a steady source of income
Not knowing where your next paycheck is coming from can be stressful. If you work on retainer, you have a fixed income — and this gives you the ability to manage your finances on a day-to-day basis and plan for the future.
2. Builds lasting relationships with clients
A retainer agreement sets out expectations for both parties, reducing the opportunity of either party trying to move the goalposts mid-project. What’s more, a contractual agreement with clear expectations will reduce the risk of any misunderstanding.
3. Saves time, money, and energy
Regular work with one client means you’ll spend less time hunting for other freelance work. After all, constantly looking for new jobs can incur unnecessary costs, not to mention the time and energy involved in having to provide samples of your work each time.
Additionally, you can focus on establishing and expanding your freelance business. If you plan on building a small business offering freelance work this way, you might also consider cost-effective ways of boosting your business such as marketing, business phone systems, and other business process software.
4. Helps achieve and maintain a healthy work-life balance
If you undertake remote work as a freelancer, the stability that comes from a work on retainer set-up (having regular projects and a fixed income) can provide a degree of security. This gives peace of mind and enables you to manage your time more effectively, so you can enjoy a better work-life balance.
5. Provides an organized working schedule
Because a retainer agreement sets out the number of hours you as a freelancer are contracted to, you can plan your work schedule accordingly. This also means you can plan other work that may crop up throughout your contract period.
6. Allows you to control your own terms and conditions
When drafting a retainer agreement, you’ll have a say in the terms. The number of hours and rate of pay are two of the bigger points to be negotiated, as well as reasons for termination.
How to set up retainer agreements
1. Structure the work you offer
- Hourly: Will you offer your client a fixed number of hours per month? If so, it’s also worth considering what happens if the hours go unused; make sure this is clear in your agreement.
- By deliverable: Perhaps you would rather charge the client by project and agree to provide so many pieces of work per month. Again, consider what happens if the client requires less/more than the agreed work and define your terms in the agreement.
- Access for services: This is a much rarer structure for freelancers. In this case, you’d charge a base rate for the client to be able to access your services and any work you take on would be charged at an hourly rate.
2. Length of agreement
To begin with, you may want to start with a small term such as one month. This way you can ensure the working relationship suits both you and the client. This also gives you the opportunity to discuss the terms and adjust the agreement should you need to. After that, you may consider a rolling monthly contract or a longer deal.
Pricing should be attractive to the client without leaving you feeling undervalued. Most experts recommend discounting your “going rate” by about 10%. This gives the client a reason to commit to your services and still ensures you’re paid fairly.
4. Holidays and time off
Where possible, it’s a good idea to build any vacation time into the agreement and specify how that month’s fees/hours will be handled.
Or it may be that you’re happy to work during your holidays. With the world connected online practically everywhere, you can work even while on the road. Plus, with software such as voice over internet protocol (VoIP), you can easily communicate with clients from anywhere in the world.
5. Grounds for termination
You will also need to build in a notice period for the cancellation of services from either side. This offers both you and your client protection and sets clear boundaries to make the agreement fair.
However, there may be other instances where you or the client may wish to cancel the agreement sooner, including:
- Rudeness and lack of professionalism
- Persistent late payment
- Demanding additional work
- Not meeting deadlines
Best practices for pitching your retainer agreement
When pitching your retainer agreement, it’s important to set out your terms and expectations clearly, as detailed above. This is better for you and the client as it will save time and disappointment in the long term. Most companies will expect your pitch in a digital format so email it over to the relevant person with clear and direct wording.
Include a call to action, too. How can the client move forward? Most importantly, be polite!
Example of a retainer agreement
Setting up a freelance retainer agreement is rather straightforward. Here are the main things to include to help you get started:
- Services: hours or number of documents per week/month
- Remuneration: your hourly/document rate as well as any expenses you require
- Termination terms: How and under what circumstances either party can end the contract
- Holiday/illnesses: What happens when you can’t fulfill your obligations?
The key is to ensure the agreement manages expectations on both sides.
Here is a sample retainer agreement from eForms. It’s just the first page, so pay them a visit if you want to create your own using their template.
Take back control
A carefully thought out freelance agreement will give you the chance to benefit from financial stability whilst also maintaining the freedom of being in charge of your own time management.
A retainer agreement doesn’t limit you from picking up other work either. You can top up your income with a second or third agreement or continue to pick up work on an ad hoc basis.
Make freelancing work for you!
About the author
John Allen is a driven marketing professional with over 14 years of experience, an extensive background in building and optimizing digital marketing programs across SEM, SEO, paid media, mobile, social, and email, with an eye to new customer acquisition and increasing revenue.