September 26, 2012

How low can't you go? Earn the freelancer pay you want

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A friend of mine tells me this story recently:

She's a freelance graphic designer, or maybe it's more accurate to say she's an aspiring freelancer. She's worked as a full-time staffer as well as done some freelance side projects. After a recent move to a new city and some changes to her personal life, this friend is looking toward turning freelancing into a full-time gig.

So she puts the word out to her network that she's looking for some clients. Almost immediately, a project lands in her lap. Ask and ye shall receive, right?

Except that the project offer, which came from a friend, was way below the pay rate that made sense for my friend. She was torn. Should she take the work at a wage she thought didn't cost out for her, in order to "just get going on something," or should she be strict about her rate threshold?

Before she could decide, another project dropped into her lap. This was also for a friend. She thought the project design and execution would cost about $500. The client offered her $250, saying another designer and mutual acquaintance had agreed to that same rate but couldn't start soon enough.

This is a common scenario for freelancers and consultants, and an issue you'll have to grapple with, especially if you seek to earn a full-time living wage with freelance work. With the economy still in recovery, small businesses continuing to struggle and a flood of freelancers in the marketplace, how do you know how low, or high, of a wage you should aim to earn?

As a longtime freelancer, I've noticed a pattern over the past several years of pay rates dropping, and of freelancers in my industry being willing to work for less -- sometimes so much less that it can be shocking, and infuriating, to many of us trying to hold the line.

I've also learned that there is more than one reason to take on a job, and that the return on work you do can go beyond a paycheck. Still, we all need to eat, and we all want to be respected and compensated for our skills and expertise.

Some things to think about when considering whether a freelance gig pays enough:

Will this job get you others? Taking on a new job, even if the pay is less than you'd hoped for, can potentially lead to making contacts and connections, and those connections could lead to higher-paying jobs that you really desire.

I know someone who freelances for a major publication that doesn't pay very much, but the notoriety and prestige of having his work appear there helps this freelancer land other gigs that pay very well. Exposure can get you more work, and that additional work could be lucrative.

Will this job get you experience? Sometimes, and I really only mean sometimes, taking a job for less money than you think you're worth is worth it if the job will bring you experience that you need. Perhaps you've been out of work for a while, or you are hoping to forge into a new industry or area. Your top priority then might be to get some gigs on your resume, rather than earning a certain wage.

But don't get sucked into this potentially self-hating world for too long. Many freelancers I know accept low-paying work so often that they begin to think they can't, or shouldn't, earn more. Remember to increase your wage and value as quickly as you gain experience.

There are factors that make clients more willing to pay you more. In the case of my freelancer friend, the client hoping to hire her for $250 revealed that he needed speed (the other, cheap designer couldn't start early enough). There's always a top priority a client is after. Sometimes it's cheapness. But other times it's quality, pedigree, a unique idea or a tight time frame. Find that desirable factor and leverage it into a satisfying pay rate.

Know how to cost out your work. Always have a clear picture in your mind of how long work takes you. Be able to calculate your hourly wage earned from a lump-sum payment. Always keep track of every hour you work (too many freelancers I know don't do this, and they're actually in the dark about what they're earning because of it). Develop efficiencies that will result in a better pay rate.

Know how to sell yourself. Make a great pitch to every client. Be clear about deadlines and about what you will put into the project. Be able to explain why you will provide a better service than other freelancers or consultants. Detail for prospective clients every step of the project. Be clear about what's included and what isn't. Convince clients that they're getting something special, that they're buying something better. And then deliver.

Natalie Singer is a freelance writer and the founder and owner of Punkernoodle Baby, a Seattle-based cloth-diaper shop and ecommerce site. Email her at nsinger@nwjobs.com.

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freelance, pay rate, self-employment