Entrepreneur Advice: Gotta Get that Money

By

| Updated

HollyHowardDear Holly,

I’m a freelance writer here in Brooklyn. I was hesitant to reach out and ask you a question, because I’m not sure if I necessarily consider myself a business owner or even an entrepreneur. But, I also don’t have a sole employer so I am very much an independent worker.

My question to you has to do with money. I’m having a hard time setting my rates to earn what I believe I deserve, and on top of that, I have an even harder time collecting payment when it’s due. I get so frustrated with the companies I freelance with and often times it impacts the working relationship.

Writing is my forte, not money. Do you have any advice on what I can do to solve these problems?

Thanks,

Money Troubles

Dear Money,

I’m glad you decided to reach out, because whether you recognize it yourself, you are a business, and the first step to changing this situation is acknowledging this. Though you’ve labeled yourself a freelancer, you need to know that the same rules apply to you as they do to operating a business, especially when it comes to money.

What I mean by this is that your problems are very common to service based businesses and the solutions lie in clear protocols and systems. Don’t get frustrated with your clients because you haven’t developed the skills you need to operate your business properly. We often like to point fingers or place the blame outside of ourselves when there’s plenty we can be doing on our end to improve and fix the situation.

First, let’s address how you set your fees. Here are a few things you need to consider: What is the industry standard? What is your skill level and experience? What additional value do you add to the process? How do you present yourself to the client? That’s a lot to research and consider. Also, don’t forget to consider what your overhead expenses are. Often times when we work from home or remotely, we forget to factor in portions of our rent, utilities, and supplies in our fees.

In setting our fee, we often pull a number out of thin air or just charge what everyone else is charging without really thinking about what the appropriate number is. I also see freelancers low-ball fees out of fear of not getting the job. That’s an issue we’ll have to save for another time, but know that if you haven’t set your rate high enough that it makes you slightly uncomfortable when you say it, then you’re probably not charging enough. And, most importantly, consider what I mentioned about how you present yourself to the client. Again, if you take a casual approach to your freelance business, as I often see with freelancers, you’ll have a much harder time charging what you’re worth and collecting payment. Don’t do one without the other—you can’t charge the rate you need if you aren’t clear on the value you deliver and how to present it in a way that sells.

That being said, let’s talk about collecting payment. From the initial interaction with the client you want to be able to present a detailed proposal for your services and not just throw out a number that you verbally agree on. Establish your rates and be ready to negotiate and get everything in writing up front. I guarantee that if you present yourself in a more professional, clearer manner, there will be less negotiating happening. Be able to indicate the estimated number of hours and how your previous experience lends to delivering superior results.

Once you’ve agreed on a price, be sure that you agree on a payment timeline. Present a timeline based on your needs and not just on what the client dictates. I’ve seen freelancers often feel that they don’t have a voice when dealing with much larger institutions, but it’s just not true. For instance, what are your terms of payment? When do you bill? How long does the client have to pay you once they’ve received an invoice? If you’re not clear on this up front, you’re going to have a hard time collecting payment.

Most importantly, know who within the company is responsible for paying you. I see freelancers fail to receive payment because they’re chasing down their editors when they should really be directly contacting accounting. You should always ask before you begin work on the project who the billing contact is and what is the best way to contact them. I often see freelancers fail to stay on top of payment deadlines and then they are often scrambling to make contact. Do not wait until its payment time to seek out this information. It will always delay the process.

Finally stay organized. Like you said, you’re focused on the writing, but you have to recognize that a system is vital to making sure that everything comes together. The money piece needs equal focus and development.

Good luck! Making these small shifts and recognizing that you are operating a one-person business will change the way you present yourself and organize your fee and payment systems. Change your mindset, change your habits, and you can change your freelance-business.

Want valuable insights into how to grow your business? Email Holly to set up a time to talk at hhoward@askhollyhow.com or to ask a question for the next Ask Holly How. Register for her next business development program here.

Leave a Reply

  • (will not be published)