1. Price by the value of what you do, not by time alone
Clients buy results, so don’t try to sell them time. If your years of skill and experience mean you can complete something in days that would take someone else weeks (because they know less than you) don’t price according to their ignorance. Learn how to ask questions which uncover what the job is worth to the client. That takes patience and confidence but is worth it every time.
2. Charge fees for late payment.
Make it clear on your invoices when the payment is due and what the cost of missing this deadline will be on your next invoice. Set up a reminder to email the client’s accounts department seven days before the due date so you don’t get caught in the ‘sorry can you re-send your invoice’ cycle.
3. You’re Going to Get Asked to Work for Free – Have a Policy
Family and friends will ask for free stuff or crazy discounts. Decide whether it’s full rate or completely free – the middle ground is asking for trouble
Decide how much time you devote each month to free work for causes you think are important and then when people ask, it’s easier to say “I have this policy of X hours per month and it’s committed for the next Y months, sorry”
Companies that ask you to work for free “for exposure” can get lost.
4. Create an Accounts Email Address.
Chasing money does cause friction so one simple, if small way of distancing you the eager to please freelancer, from you the business person who needs to chase your client, is to create an ‘invoicing’ email address that sends out and chases invoices. It means the content of an email about money doesn’t get mingled in an email chain about that new project and to an accounts department, it’s just that bit more formal.
5. Get Staged Payment Upfront.
Freelance PR projects fall into some fairly standard buckets of activity:
- Defining and agreeing the brief and scope of work
- Researching what needs to be done, developing a detailed plan
- Drafting materials, creating assets
- Executing the plan
- Reporting and evaluation
Explain that you will be invoicing each part in advance and then it smooths out the cash flow and if there is going to be a sticky part of the project where things change, requiring more time, then you can limit any impact/dispute to one part of the invoice.
6. Pay Your Bills Manually
There’s a reason everyone wants you to set up direct debits but they are restriction on your cash flow if your outgoings are on a fixed schedule but your income is highly variable. It’s a bit more effort, but that freedom is really valuable.
7. Set aside time for billing and chasing your debts.
You really need to get out of a mindset that invoicing is a chore. It’s your golden hours each month and even if you are the most scatter-brained, messy desk person on the planet, it’s what pays your bills.
Novelist Gustave Flaubert said “Be organised in your affairs, so that you can be violently creative in your work” He always paid his taxes on time.
8. Not All Hours Are the Same
Freelancers are great/terrible (depending on your view) at thinking all hours are the same. We work at odd hours of the time and week and that has two bad effects.
Firstly if you email that brilliant draft to a client at 11pm or 6am as soon as it’s done, you are educating them to call you at odd hours too and before you know it you are working to their schedule, not yours and that burns your time. Wait until the work day is started.
Weird hours of the day don’t have the same things going on around them to indicate time passing so they are quite elastic – they can easily be 80 minutes or more and if they clash with other things in your life - family routines for example they can be stop/start and therefore a bad use of your time. Carve out enough time for the really valuable tasks and put barriers between work and other schedules.
9. Aim to Save a Third of Each Payment You Receive
If you’ve left full time employment to go freelance you also left behind benefits beyond what you took home at the end of the month – employer pension contributions, medical insurance etc.
You are now responsible for making up the difference so one way to get a true picture of the income you really need to generate is to put one third into a saving account.
One third may sound a lot but it also takes into account the time you have to factor in each month to hunting for new clients.
That can be easily 25 per cent or more of your billable time (plus expenses associated with going to networking events, coffee meetings etc). That needs to feature heavily in how you price jobs because every invoiced hour needs to support a quarter hour or so of new business generation time – probably more. That’s where a PR freelancer matchmaking service like ours can really help you make more money.
See the next point…
10. Research the Competition and be Honest About Your Pricing
You need to find out what other freelancers are billing. Way easier said than done and don’t look at the price dominated markets like People Per Hour or Upwork or you’ll depress yourself!
There are informal Facebook groups where pricing is occasionally mentioned and recruitment agents will show hourly rate expectations but don’t forget these will be lower than reality because the agent needs to make your rate acceptable to a client AFTER they have added their 20% commission.
So let’s say you want to earn £100k per annum (before tax) that’s £1923 a week.
- Take away 3 weeks holiday – that’s now £2040 each week
- Take away a week off sick – that’s now £2083 each week
- Take away 25% time to generate new clients – that’s now £2857 a week
- Take away 10% time just taken up by ‘other stuff’ – chasing bills, admin, your printer dies, a train is late, etc etc – that’s now £3,333 to earn each week (or £173,316 per annum) to get to your target gross income figure of £100k per annum
That’s a good place to start calculating your daily rate.
Hope that’s helpful – please let me know if we can help build your Freelance PR practice.