Don't work harder, work smarter! Avrum Laurie of FreshBooks explains how to boost your income without having to do loads of late nights.
As a freelance designer, you'd probably like to make more money this year, but you still want time to enjoy your personal life. Yet it's hard to build a design business when the whole strategy depends on your ability to work harder and burn through more hours.
If you're looking for big returns in 2014, it's time to rethink your business practices. A few simple changes in philosophy can go a long way, enabling you to make more money without pulling long nights in front of the computer. Here are four ways to start improving your work/life balance now.
01. Position yourself as an investment
Persuade clients to see you as a valuable resource, not a drain on their finances. Image: www.StockMonkeys.com
Clients want to keep their expenses as low as possible. That's why so many designers experience downward pressure on their proposed prices. However, there's a big difference between an expense and an investment. Position your design services as something that will benefit the client in the near and long-term, and there will be less haggling over dollars.
In other words, when discussing your services, don't paint yourself as another commodity. Actively try to use the term 'investment' instead of 'price' whenever costs are discussed.
Also, frame your services within the context of your client's big picture goals. For example, the new web redesign will boost sales; the new branding package will help a client build their presence in the market and look for funding.
02. Don't quote an hourly rate
When you quote clients an hourly rate for your services, you're putting a limit on how much you can make. You are also devaluing your work: after all, you bring far more value to the table than just punching in and punching out on the clock.
Frame your services not in terms of hours, but by how you can help the client meet their target objective. Let's say a client is looking for a new ecommerce site design that is going to generate $75,000 more revenue each year. Most companies would be more than open to making a modest one-time investment of $15,000 in order to generate an additional $75,000 annually.
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Therefore, asking $15,000 is a reasonable price for this project. However, if you were billing at an hourly rate, the project might cap out at just $5,000 - even though it would still have the same positive impact on the client's bottom line year after year.
03. Focus on the right clients
If a new client isn't going to boost your funds significantly, why take them on? Image: www.SeniorLiving.Org
Sometimes saying ‘no' is the most effective way to scale your business. Clients that continually hammer you on price will probably never grasp the merits of your value. Likewise, you should avoid prospective clients that ask you to work on spec for free or a nominal fee. These clients will never respect or value your time; they'll simply see your work as just one of the hundreds of submissions to look at and throw away.
Another red flag is the client who considers himself a 'design expert' and meddles too much in your original design. At the end of the day, you want to produce work that you are proud of and that will help you land future business. When clients change your work to the point it's unrecognizable, you've lost a chance to prove your value and build a better portfolio.
Keep in mind that low quality clients generally tend to lead to more low quality projects. When you start working with companies that understand the value of investing in themselves, you will get better referrals to other high quality clients and can continue to move upmarket.
04. A 'good enough' attitude can get you audited
Creative professionals aren't generally interested in tackling the mundane aspects of business like balance sheets, cash flow, profit and loss statements, etc. It's tempting to let some of the bookkeeping slide, as long as you get things 'about 80% right.' However, with this attitude you're not only at risk in the event you are audited, but you may not be seeing problem points in your business - such as clients or projects that are costing more than they're worth.
Fortunately, you don't have to become an expert in accounting. You don't need to know what a ledger or P&L is. You just have to keep track of what you are earning and spending. Then you can leave any kind of analysis and processing to a bookkeeper. Working with a numbers professional can more than pay for itself when you get invaluable advice on your taxes, business structure, and general business practices.
Words: Avrum Laurie
Avrum Laurie is director of product management at FreshBooks, the number one cloud accounting specialist for small business owners. Follow on Twitter @freshbooks.
