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In order to truly grow your freelance business, you should take on FEWER clients.
This seems counterintuitive at first. Fewer customers = more revenue and growth? How?
What I’ve learned about customer service is that you spend a certain amount of energy serving every customer you have. You send emails, you have meetings, you spend time working on their projects, etc.
Here is a list of things I personally do with every client, regardless of quality level:
- Receive an initial request
- Review the initial request
- Send the qualification questionnaire
- Review the qualification questionnaire
- Prepare follow-up questions
- Schedule the first call
- Send a confirmation and agenda setting email
- Prepare for the first call
- Make the first call
- View the call results
- Do research
- Write a proposal or create a quote
- Present the proposal or send the email
- Write a contract
- Send the contract and invoice the client
This is all done during the onboarding phase – before you start working together – and you can already see how much it can occupy your mind and take up time.
You can and should automate this as much as possible using editable templates, contract or invoicing software, reusable email scripts, and more.
Some things can’t be automated and you end up spending time on them.
So, if you have to spend time on these tasks, it becomes crucial to select clients who will pay you well for your time. You’re already doing the same repetitive, (mostly) non-billable tasks, so it makes sense to target the highest-paying clients if they’re going to require roughly the same amount of time and energy from you.
How many customers can you serve at any given time?
Depending on the size of the project, I cannot serve more than 3 clients at a time. Not if I want the work to be good. You might be able to do more, I don’t know, but what I do know is that you also have a limit.
Once you cross that threshold, the quality of work you can do on your own starts to decline and things get sloppy.
Have you determined what the ideal number of customers is for you? It’s worth taking the time to determine your capacity.
This number is a way to project how much money you can make while doing a good job. And you want to do a good job. Good work generates referrals to do more good work and helps create a virtuous cycle that can sustain your business for years.
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So let’s take the scenario of one large project per month. This represents twelve major projects per year, at an average of three months per project from start to finish.
Now let’s say you charge an average of $5,000 per project (and, for simplicity’s sake, get paid the full amount upfront for each project).
$5,000 x 12 = $60,000
Is $60,000 (before taxes) enough?
This may be the case for some. If so, great. You don’t have to change anything. But if not, you might consider raising your prices.
Not because you want to stick to your customers, but because if you want to have a thriving (and satisfying) business, you simply have to make enough money to support yourself. Sometimes that means letting go of smaller clients so you can pursue larger clients.
Let’s say we raise our prices by 50%. We are now at $7,500 for an average project.
$7,500 x 12 = $90,000
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Now we’re starting to get somewhere. $90,000 is nothing to sneeze at. You are that much closer to six figures as a freelancer.
I know (hypothetically) that if I average one large project per month at $7,500, I will get a decent salary.
In a perfect world, I would schedule each project so that when one ends, the other begins. And so on. So I know that I can manage 3 large projects spread out at different stages over a 3 month period.
So now the question is how do I sell a $7,500 project versus a $5,000 project? What should I include in the scope or who should I present it to so that it sells for the same rate as the $5,000 project?
Finding answers to these questions and applying what we learn to our business is strategic. We are now deploying more focused efforts in our business, light years away from simply taking care of the customer who walks through our door.
This is how you level up.
How to increase your rates by 50%
The first question that comes to mind when you hear this is, “What if I can’t find any $7,500 projects?”
That’s a good question, but when you narrow your focus and say, “I’m only going to take on projects of a certain size,” you start doing things that will land you those bigger projects. important.
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It’s like the difference between a creative project without constraints and a project with a detailed brief. The project with a detailed brief allows you to work within these particular limitations.
Any creative who has ever worked on a project without creative direction knows how difficult it is. If there are no parameters to work with, you don’t know where to start and where to end.
The possibilities are endless and you are paralyzed by the paradox of choice. However, if you add constraints (style, target audience, project objectives, etc.), it frees you up by giving you guidelines within which to work. This gives you a direction to aim for.
It’s the same thing if you limit yourself to a project of a certain size. I call this my Minimum Commitment Amount (MEA). I ask myself this question: “What is the smallest project I will work on (in terms of income)? The answer to this question gives me my MEA.
Imposing this constraint forces me to pursue projects with a certain amount of income or more.
So when a project comes in with a budget of $2,500, I say no because the time spent on this project has an opportunity cost. I have limited capacity and filling this seat means potentially giving up $5,000 worth of work. This is the opportunity cost of carrying out this small project.
Understanding your opportunity costs
While it’s hard to convey money that’s staring you in the face (and if you really need the money, you should probably take it), what I do when I have free time or I have left aside a low-value project is that I reinvest this saved time in the growth of my business.
I’m working ON my business instead of IN my company. What I mean is that I work on long-term planning and business development. For example:
$175,000 for ONE blog post!
I wrote a blog post in 2012 that gets most of my traffic and that’s how most of my clients find me. Since then, I can probably attribute about $175,000 worth of revenue directly to this blog post alone. (1 blog post! I think that’s a pretty good return on investment for writing a measly little blog post.)
Now, there’s no guarantee that if you write a blog post you’ll get this type of return, that’s probably not the case. The fact is that I wrote this post in my free time.
Imagine if I was too busy to write it because I was working with a low-value client and never had time to write it?
Every project and every client you take on has an opportunity cost associated with it.
So ask yourself if it’s worth it. Ask yourself if this is a project you can do a good job on. Ask yourself if this pays you a fair wage and if you will enjoy working with this client you are devoting your time to.
If the answer to these questions is no and you can afford to pass on the project, do so.
Working with poor quality clients, getting paid less than you deserve, and doing work you don’t believe in are all signs that you could be doing something else to improve your business and see it pay off down the road.
What to do now
So how can you apply all of this to your freelance business? First, know that you need to remove low-value customers in order to grow. If not today, then at least in the near future. Here’s how to professionally fire a client.
With limited capacity, you can only accept a limited number of customers. If a low-value customer takes up one of your valuable seats, it’s like an anchor weighing you down and swallowing up your time and energy.
After that, put your foot down and create a minimum commitment amount (MEA). Below this number, you do not support the customer. Soon you will see your business and income reach new heights. You will have less work, more income and a successful business.
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