There are a variety of reasons freelancers struggle to make a good living.
Horrible marketing, terrible clients, bad business practices, or wasting time on Upwork are a few culprits keeping extremely talented people from generating the revenues or profits needed for success.
But the biggest reason most freelancers fail relates to pricing.
I’ve coached thousands of gifted people over the years and this always seems to be an issue regardless of age or experience.
Either a freelancer doesn’t charge enough or they base their worth on some archaic hourly rate. And of course it doesn’t work.
So today I want to share a story about one of my life changing experiences as a creative professional in the hopes it might change your life as well.
Are you ready for it?
When I started out as a freelancer, I was an illustrator and airbrush artist. There were very few resources for an aspiring creative to learn from, particularly about the business side of freelancing.
Somehow I found a formula like this for how to calculate my hourly rate and that’s how I quoted my jobs.
Then one day I was asked by my best friend’s grandfather to paint advertising on the sides of his transmission business. He told me what he wanted and asked me what it would cost.
I went into a sales pitch about my time and costs for materials, but he abruptly stopped me and gruffly said …
“Son, I don’t give a damn about your time or expenses. Tell me what the job is gonna cost.”
I really wanted to kick the old man’s ass for being so rude, yet he was about to give me one of the most valuable lessons of my entire career.
He told me clients don’t care about the minute details of a project — they just want to know what problem I’m solving for them, what value I will deliver, and how much they need to invest for that value. #BOOM
My friend’s grandfather also explained that if I priced by the project or on a flat rate, I could make a hell of a lot more money per hour if I was faster and more efficient at my job.
Here’s an easy working example for our discussion:
- Old Way: $25 per hour for sign painting for 20 hours = $500 for the project
- New Way: $1,500 flat fee for sign painting for 20 hours = $75 per hour
- New and Faster Way: $1,500 flat fee for sign painting completed in 10 hours = $150 per hour
Of course there are factors to consider like expenses and profits, but hopefully you can see how this example is so simple but powerful!!!
OK, let’s fast forward because you need to see how this all eventually worked out and how it changed my life.
I was one of the very first WordPress theme designers in the industry and created websites for clients all over the world.
All of my projects were sold by the value I delivered to the client, like generating more leads, increased sales, or the sexiest website on the planet (we’ll discuss these emotional connectors in another post).
I was really great at communicating how my talents would solve their problem, but I also created business systems allowing me to complete my projects even faster.
In the old world of doing things, charging by the hour, it would’ve looked like this: $50 per hour @ 3 hours for a total of $150 per website.
But because I was selling on value, my rates looked like this: $3,000 per website @ 3 hours total for a price of $1,000 per hour.
YES! I averaged $1,000 per hour by selling the project based on value.
As you can see, selling on value is the best way for you to significantly make more money as a freelancer.
Sure there are times an hourly quote might be needed, like for revisions or updates, but charging by the hour only leads you to the bottom. And being broke.
There’s so much more I can say about making a great living as a freelancer and being able to work less, but we’ll save that for another day. I can’t give you all the secrets in one post. 😜
Today I want to encourage you to rethink your pricing. Start selling by the value of the project, not by the hour.
Enjoy the extra money!