How to Maximize Your Earnings as a Freelancer, Whether Freelancing Full-Time or Managing a Side Hustle
A recent report from Upwork and Freelancers Union reveals that there are 57.3 million freelance workers in the U.S. According to the report, this represents 36 percent of the workforce and is an increase of 30% from last year.
Whether you’re freelancing full-time or as a side gig, and if it’s out of necessity of for fun, it’s important to make the most of your efforts. Below are 5 ways to maximize your earnings as a freelancer.
Sharpen Your Skills
Customers hire you for your expertise in a particular area, but unless you keep your skills up-to-date, you will soon be out of demand. For example, if you do taxes on the side, you need to stay abreast of all of the tax changes that occur from year to year. If you’re a wedding videographer, your clients will always want you to duplicate the trending videos they see on TV or online. This may require purchasing new software or at least learning how to create or use the latest special effects programs. Personal camera phones are so advanced that amateurs – even kids – can videotape a ceremony and add effects. If you expect people to pay for your services, you have to provide the type of wow factor that clients can’t get from a 12-year-old nephew.
Don’t Sell Yourself Short
You may be tempted to lower your rates to attract more clients. However, this is not a good strategy for maximizing your earnings. Your time is valuable, and if you charge rock-bottom rates, you’re actually wasting your precious time. Freelance rates should factor in the amount of time you’ll spend on the project, as well as other factors, such as the use of your equipment. For example, let’s say you have a side gig cutting grass. You lower your rates to get a new client across town. But, how much time and gas do you expend driving those extra miles? Or, if you typically cut the grass and use a blower to remove it from the pavement, and now the new client’s yard also requires you to use your weed eater and hedge trimmer, that’s additional time, labor, and equipment, and you should charge accordingly.
Depending on the type of freelance work you perform, you may also rely heavily on such equipment and tools as a computer, software, phone, internet connection and office space/utilities. These components should be factored into the price that you set for hourly or project work.
Treat it Seriously
Most people freelance on the side, so there’s a tendency to take a laxer approach to this type of work. However, this is the wrong tactic. Just as you show up for your day job on time and complete your assignments as expected, you should have the same attitude regarding your freelance gig. You should complete your work in a timely manner and in an excellent fashion. Work of mouth is incredibly important in the world of freelancing. If you get a reputation for being a person who is not reliable or does not perform quality work, it is unlikely that you will secure recommendations for additional clients. My plumber, electrician, mechanic, A/C repairman, and lawn guy were all recommended by friends. As a writer, I’ve also received jobs based on recommendations from existing clients.
Taking your freelance work seriously also entails creating a professional brand. For example, if you are a realtor, consider getting a LinkedIn profile that reflects your part-time gig. This profile should be separate from the profile for your day job. For instance, if your day job is an accountant, having a profile as an accountant/realtor is too busy, and you start looking like a jack of all trades and a master of none.
So, you would create a separate profile as a realtor – although you would use the same education, interests, etc. This is also a good way for clients and other people who know you to endorse your skills and write recommendation letters on your behalf.
Diversify
In the Upwork report, 63% of respondents believe that having more than one client provides a greater degree of stability. As a result, these workers typically juggle 4.5 clients each month. As a freelancer, one thing you should not do is put all of your eggs in one basket. Regardless of how stable your client seems or how much they pay, always remember that freelance work can end at a moment’s notice. A tax client may decide to start doing their own taxes or use tax software. A lawn customer may move to a condo. A website client may go out of business. That’s why it’s so important to have more than one client – and you can have numerous clients that reflect your many talents. There are various types of side hustles for every skill set and personality type, so explore the many options out there.
Prepare for Drought Times
The Upwork report also reveals that 63% of full-time freelancers tend to dip into their savings to make up for the inconsistency of freelance work. By comparison, only 20% of freelancers who don’t do rely solely on freelance work must make such adjustments. But, even if the freelancing is a part-time gig, you eventually be accustomed to relying on that income. Don’t. If your finances permit, put as much of your freelance earnings as possible into a savings account or an interest-earning account.
A Go Banking Rates survey reveals that most Americans are not prepared for the next economic recession. In fact, 61% of Americans don’t have enough money in savings to cover living expenses for six months. Also, 49% are living paycheck to paycheck, and 64% do not have multiple streams of income.
If you’re freelancing on the side, you’re on the right track to avoid becoming a statistic. Following these tips can help you maximize your earnings and create a more secure financial future.