Freelancing can be an awesome source of side- or full-time income, or it can be a total time and energy drain. Since I was in college, I have freelanced and worked on the side in a variety of ways. I have been plaid for freelance social media, Search Engine Optimization (SEO), writing, and just last year spreadsheet consulting. I learned more from spreadsheet consulting than any other freelance job I’ve had, mainly because it gave me the most work and hit some road blocks and challenges.
Overall I enjoyed (and continue to enjoy) my experience, but there are a few things that I would definitely wish I had known before diving into freelancing:
1) Be realistic about your time
While I would love to own my own spreadsheet/database design and consulting company, the reality is that right now I have a full-time job, pretty much single-handedly run this website, and bought a home that has many home improvement projects waiting for me to tackle. Did I forget to mention that I’m married and desire to have a social life?
While you can certainly try to “do it all,” at some point you will have run out of ways to fit everything in your schedule, eventually your freelance work, regular job, social life, etc. will start to suffer. Make sure you don’t take on 80 hours of work a week when you already have a full-time job (or you know, a significant other…or friends…or hobbies). Set the hours you will dedicate to freelance and defend your free time.
2) Charge more than you think you should
I absolutely understand that when you freelance you are competing against many others who want your job. Ultimately, though, you need to decide what your time is worth. For spreadsheet consulting I have been charging less than I make per hour at work, and that doesn’t even include all the benefits and perks of working at a large corporation. After taxes I really wasn’t making that much.
Especially if you are freelancing in your spare time, be weary of setting your rate too low. You may get a lot of work from a client but if you set your hourly rate too low you may come to loathe the pay rate… especially if you are working your butt off to make sure that you are giving them the most for their money.
3) Make yourself stand out
Some Spreadsheet/Database/Excel/Access/VBA consultants charge in the range of $100-$200/hour. They stand out because of their skill set. Not many people have put in the time and energy to master a programming language and the art of good database/spreadsheet design. Beyond having good design, you have to be able to troubleshoot problems before they happen and make sure that what you are creating is adaptable, usable, and anticipates user error. This is a highly sought-after skill set for many companies who live and die by data analytics.
While that is a very niche freelance area, there is some freelance areas that a much larger pool competes in. The obvious example is freelance writing. There is a huge need for content because there are an endless number of sites who need daily – if not hourly – content. Making yourself stand out can be a bit harder when there are so many other people competing for jobs. The most obvious way would be to focus on one niche, as well as get published content, which can be as easy as starting a blog.
Whether it’s the specific skill set you have, the niche you focus on, or the experience that you have accumulated over the course of years, it’s incredibly important to stand out in the freelance world.
4) Set realistic expectations for your client
The most important thing to do when freelancing is communicate to your client about expectations. Sometimes freelancers are guilty of making a project sound simpler than it really is, or not being completely open about potential issues that could arise (and inevitably cost the client more money). I think it’s important to be very vocal about the possible limitations of software as well as being very conservative about potential hours it will take to finish a project.
Make sure you don’t set unrealistic – or impossible – expectations from the get-go!
5) Have fun
Especially if you plan on freelancing as a side income source, try to pick something you will actually enjoy. The last thing you want is a side income to become lucrative just to find out you hate it. I think one of the best things to do when it comes to freelancing is to either pursue something that relates to a hobby of yours or something that will improve your skills in your full-time career. That’s what I’ve done, and it’s made it a bit easier to stomach doing work after work and on the weekends.
_____________
Have you freelanced or considered freelancing? What lessons have you learned along the way?
____________
Photo by David Goehring
Check out some of our favorite personal finance resources:
Are you getting the best credit card rewards? Check out the top cash back credit card offers (updated daily)
Make extra money: 15 ways to make money from your computer
Get the First Chapter Free!
Join our online community and get the first chapter of the book Student Loan Solution absolutely FREE!
These are all great tips DC! I have freelanced myself and my wife has done a lot as well and you’re exactly right here. I find that rates are always a sticky thing, especially when you’re competing against people across the world who’ll do it for a fraction of the price. Many clients don’t understand that, while not always, there is a reason why our services are priced the way they are for a reason. I agree that #4 is vital, without it you can end up, potentially, in a bad situation where you either end up losing the client or simply not making enough on the project.
@FrugalRules You definitely have to price yourself correctly, otherwise it can be counterproductive. At least that’s what I’ve learned!
Charge more than you think you should is a huge tip. When I started freelancing I thought I had to charge bottom dollar to “get established.” I soon learned that the people you work for on that end are so onerous in many cases that it just didn’t make sense for my sanity. Imagine my surprise when I started charging more and also started working for some cool people!
@AverageJoeMoney Similar thing happenned to me. I priced too low and came off as way to eager to take on the job (and just about any additional demand added to the job…). My next major project I will charge more per hour and be much more conservative in my time estimates.
These are all great tips! I’m currently freelancing as writer/web designer/social media manager, and luckily, these are all things that I really love to do. I could see myself getting sick of it though if the money wasn’t very good, so I’ll take your tip about charging the right amount to heart, even though I’m TERRIBLE at asking for more money.
@Jordann Yeah asking for more money isn’t easy because no client wants to hear that.
Great little write up. Never knew such a niche existed. Your rate is important, it tells clients what you think of yourself. You need to assign value to your work! Good luck with all the projects!
@Money_Angels Thanks, you too!
Great tips! Never underestimate how much you can ask for. Most likely they will just try to negotiate.
These are great tips. I have this dream of doing some freelance work this year, but the problem is I don’t have a portfolio. Would you recommend me writing mock samples similar to articles I would want to write until I have some projects under my belt?
@Kate Cee Yep that’s the best way to do it. It’s obviously ideal to have a published portfolio, which you hinted at, but once you get a few articles published you will be able to reference those in the future. The key is to get started!
How did you get into spreadsheet consulting DC? I am known for my excel macro skills and have wanted to get into something like this for some time, but didn’t really know where to begin. Any tips?
@DebtRoundUp Honestly? Small business. They need the help and usually have more need as far as improving/developing spreadsheets.
Nice advice here on freelancing.. You make a great point about the price negotiations.. Don’t sell yourself short.. Most folks are not always going to start with their very best offer.
@seedebtrun Good point, if you say a they will ask for a minus x. You have to start pretty high because they will rarely take the first number you quote (unless you make it an ultimatum/no negotiations situation).
Freelance writer can make you money, but there is a WIDE range of pricing in the marketplace. It all depends on what you write about, your writing skills and the depth and breadth of your article. Technical writers can command top dollar versus general interest writers. It pays to expand your skill on a topic and become an “authority”. That way you can commend your pricing.
@yesiamcheap I definitely agree about becoming an authority. That’s the best way to go.
I was going to write my own updated list about freelancing. I do it full time, so I have nothing to fall back on. My biggest tip (because this JUST happened to me) is do NOT trade your services for goods or services instead of money unless you would have already worked on that project for free. You will end up feeling resentful and a whole host of other problems.
@Beachbudget You should write a few posts on it for sure! I am super interested in learning from you since you do it full time.
Great tips! About half of our online income is from our blog and the other half is from freelancing. I think I am going to start branhing out and writing about things other than frugality!!!
@Holly at ClubThrifty That’s a good goal! I have started to write more about social media. After seeing the response on my prior posts, I think I have a lot more to share about the topic than I first thought.
Great tips, especially #2. When I first started freelancing, I underbid far too many times. I’d be neck deep in a project having already put in twice as many hours as I projected and with no end in sight. Don’t jump on every single project that comes around. Be patient and really get down in the numbers and figure out what the opportunity cost is to work on that project. Then set your rate.
@Johnny @ Our Freaking Budget I was way too antsy to start making some side income. In the future I will charge more and walk away if I need to.
During my full of year of freelancing and doing my full-time day job, I learned lesson #1 the hard way. I overwhelmed myself by taking on too much and didn’t have any hours left in the day to things like, sleeping, reading or exercising. One of my main goals for 2013 is to scale back, while revving up my hourly rate. Working smarter not harder! ;)
@Carrie Smith That’s a great goal! If you can make more per hour, you don’t have to work as many. Win-win.
Great tip about #2, your time is precious and the money needs to be worth sacrificing your leisure moments. I would add to always talk about it, in casual meeting, dinner with friends, you never know when you can land a new client.
@RFIndependence Great point! You never know who a potential client could be, or who they may refer you to.
I agree completely with charging more than you probably should. It helps to determine your actual worth. You never know you might start to get clients to pay you the high rate.
@OneSmartDollar True, and they will let you know what they THINK you should get paid, so might as well start negotiations off at a high rate.
Great tips! I’m currently learning how to better negotiate rates, and I’m becoming better at keeping my ground when I feel I’m being low-balled.
@The Happy Homeowner I feel like you need to be willing to walk away if a client is lowballing you too much. Some jobs just aren’t worth it.
Surprisingly I haven’t really freelanced. I could do freelance writing or tax returns but instead choose to work just my job and my blog. I guess my blog could be considered freelancing to a point but I consider it more as a business.
@Money Life and More I don’t consider my blog freelancing, it’s not work for a given client, at least that’s how I define freelancing.
I don’t really freelance at anything right now, but I’ve learned that there is always cheapness to be found. If a client is looking for that, they usually aren’t that good of a client. Quality, however, will demand a higher rate. Those who appreciate it are willing to pay a higher fee, and those are the ones you want. I would take quality over cheap on services any day.
@Eyesonthedollar Great point! That’s one of the difficulties with charging a low rate, you are already putting yourself in that “cheap” category.
I was surprised to see what people were willing to pay. I inflated my prices initially to account for the normal negotiation that happens, but 90% of my clients accept the rates and proceed.
I’ve got to get in on your Excel free-lance business! I love working in Excel and would love to command $100 to $200 per hour for my services.
@MyMoneyDesign If you can develop applications using VBA in Excel you can ask for $100+/hour. To get that good, though, I imagine it would take 3-5 years of dedicated learning.
Freelancing can be fun and challenging all at the same time. Knowing how much to charge for your skills and how to market your business is a learning experience in itself.
Yup, have done in the past and am doing so now again! My biggest challenge is finding balance with my life and day job, and pricing. I’m getting better at picking and choosing – not underselling myself and saying no to lowball clients who want quantity. I prefer to deliver quality work to fewer clients. Great post – will point to this in my link roundup tomorrow.
I think the best tip is charging more than you think you are worth. It is better to overvalue your time than not to.
Good thought.
DC @ Young Adult MoneyMyMoneyDesignI am working as a Business Analyst and i have a very good hands in Excel. In depth expertise but I never find people paying even $50 per hour. Could you give me some advice on wherein to find such projects
manujain3710DC @ Young Adult MoneyMyMoneyDesignHard to give you advice without knowing what you’ve tried yet. The jobs I’ve gotten have come through networking. I am currently only working on blogging/online income in my spare time and not looking for Excel work. If I was I would not expect to make more than $50+/hour until I have proven myself and have a portfolio of work I can reference as well as more than a couple companies/individuals who will vouch for me. I also would have a website that showcases all this. I don’t expect people to take me seriously using a gmail account. Again I have no idea what you’ve tried so I have little to go off of.
DC @ Young Adult Money MyMoneyDesign That’s how my husband got started with programming. He started with VBA and moved on to Python, quit his “day job” and got a new job as a software developer!
This is a great reminder for me. We own a small business, and are negotiating our second product sale with another business but getting lowballed. He is asking for an inferior product in exchange for a lower price and we’re not comfortable being associated with an inferior product — and wondering if he’ll eventually pay full price if we refuse to compromise on our product. We’re about to say “no” to him, so these comments are really helpful in reminding us to stick to our guns.
DC @ Young Adult Money Money_Angels
Hi,
new to this freelance possibility of income. My skill is Excel
– medium level as not VBA but Vlookups etc. Questions; if I worked off
Freelance.com as an example, but full time – what would be your best guess $/pa
Yr1. Tricky to answer I understand & Yr2 would grow exponentially but it’s
that Yr1 -getting off the ground that I am interested in pls.
Looks like dozens of people bid for each Project but
“Others” state more work than they can handle – would you say that
sites like Freelance.com can provide sufficient work to keep me busy (Full
Time) even though in competition for Projects
In the initial stages a Client may be perhaps not fully
happy with the output – what I would want to avoid is getting a bad reputation
as that would damage future chances of securing Projects. Obviously I will do
my very best efforts, but these things do happen in the initial set up stages
so your guidance would be most welcome pls
Once accepted for a Project, how do you suggest I “manage
expectations” or the Client could be coming back for changes for another
6mths!! Handling this aspect efficiently is my BIGGEST concern
Not sure how this Forum works so hopefully I get a response but
my email is as follows just in case; Many Thanks, Craig
DC @ Young Adult Money Money_Angels
Hi, I’m new to this so pls excuse me if you have replied but it “Looks” like its awaiting a reply? Thanking you in advance, Craig
Being realistic about your time totally rings true for me!! When I first started my blog, I had hopes of posting 5x’s per week. With two little ones and a bunch of freelancing jobs, I don’t know what I was thinking!! I’m pretty busy as it is, so I’ve rethought my goals and will now post a minimum of 3x’s per week and if I have time, I’ll post more since it’s something I love. But I shouldn’t be putting extra pressure on myself! Eventually we will have more time!
Thanks for the post!
Sarah Brooks I did five posts a week the first year of my blog and it was TOUGH. It took up almost all my free time. Now, writing about three posts a week is still taking up a ton of my free time. The time commitment is something you can’t get away from. You need to put in your time and provide value if you want to get paid or build a product that generates revenue.
DC @ Young Adult Money Sarah Brooks Completely agree!! That’s awesome that you were able to crank out 5 posts per week for a whole year. Great job!! You are proof that hard work pays off and are an inspiration! I read something yesterday that said in order to “monetize” you have to have at least 50 good posts and be posting for 3 months minimum. While I’m not looking to monetize yet, it’s definitely a goal of mine in the future, though I think it will take me longer than 3 months!! How long did it take for you if you don’t mind me asking??
Thanks! Hope you’re enjoying your Friday :)
Sarah Brooks DC @ Young Adult Money Hey sorry I just saw this comment! It took me about 7 months to start making money. Prior to that I was breaking even. Keep in mind that those first 7 months I worked harder than I ever have since.