The freelancer’s dilemma: The time trap

“Freelancer: a person who works as a writer, designer, performer, or the like, selling work or services by the hour, day, or job.”

Being a freelancer sounds like a dream come true: You are your own boss and can pick and choose what work you do and for who. The problem with this is, you don’t work for a company on a permanent basis where you know you will be working for a set number of hours as well as what you’re getting paid.

When entering the freelance environment for the first time, it can be extremely difficult to get established and find clients. Once you’ve found your niche and found some clients though, the first crucial decision you are faced with is determining how much to charge — what is fair for you to make an acceptable living and pay the bills, but also what a client is willing to pay.

First-time freelancers — I include myself in this category(and possibly experienced freelancers) — get stuck in thinking about their time in terms of time to complete a project and charge down to the nickel for their work. This can be fine for starting out, but as you gain experience and good references start to add up, shift your mindset to a value-based pricing structure instead. I had a conversation with someone recently who I do freelance work for and he told me that his boss was surprised by how inexpensive the invoice was. It was at that point I had an epiphany. I was grossly underestimating the value of my time and the work that I produced and secondly, I was going about charging for my work the wrong way. I was stuck in the trap of time mindset.

The best way to distance yourself from this trap is not to think about the time you have to invest to complete a task, but rather how much value it has. For example, a company can pay one employee $25 an hour for a week to learn how to use a new piece of software and then with additional cost teach any other employees to use it. Or, the company can pay $50 an hour for a professional trainer for say four hours and teach everyone. In this situation, hiring a professional makes the most sense.

Selling value, not hours

Selling hours is a surefire way to make your client loose their confidence in you because it tells them that all you are there for is the money and you won’t take their business needs very seriously.

So the question becomes “How do you define value?” Value is the impact that your work will have. For instance, you’ve been hired to find customers for a new product that’s going to launch. You have two options. 1: take the easy route and suggest that they buy online and bus stop ads and leave it at that. Option 2 is more involved and adds more value. Set up a face to face meeting with your client (video also works) and discuss what’s working and what isn’t. Ask questions that’ll help you understand what they want to achieve. This builds trust which is the most important part of being a freelancer.

Delve into their world and do research to get a better sense of what customers want. Do the same for the company itself by identifying key people and how the company works. Based on those results, find ways to generate leads. When you do this, the client will see the value you deliver and will be willing to pay more for your expertise and care in helping them gain new clientele and generating more revenue.

Summary

Being a good freelancer isn’t about selling hours. It’s about creating value by coming up with timely solutions to problems.