Are you a freelancer or someone running a grown-up business? Which one do you want to be?
People often start out in business as a freelancer where they sell their time to different companies. You might be a freelance web designer, who takes on different contracts throughout the year, or you might be a personal trainer who has different clients each day.
There are some good things about this freelancer lark…you’re often in control of your own time, you don’t have to be accountable to anyone else for how you do things and often you can work from home, keeping your overheads down.
What about the downside of being a freelancer?
But there are some negative points as well. Let’s see if any of these are familiar to you…
- Always having to worry about having enough work, even when there is plenty of work
- Not being able to pitch for the big jobs, because you don’t have the capacity
- Not being able to charge the best rates because people always perceive you as small fry.
- You don’t take holidays because you if you do, you won’t get paid.
The big downside to the freelancer model is that you’re always just selling your time. I’ve even called this the prostitute model because it’s kind of the same model. There’s an inbuilt limit to how much you can make because there are only so many hours in a day. And even if you work for 30 years, it’s unlikely that you’ll have built up enough to sell the business on – because you are the business.
So what are your options?
You can carry on freelancing and just build up a good reputation and client base to make sure that there’s enough money coming in to pay the bills and to pay into a pension fund to support you when you don’t want to work so much anymore. There’s nothing at all wrong with doing that, especially if you can keep developing what you’re doing to keep ahead of the competition. If that’s the route for you, here are some thoughts on how to get better at what you do, and be able to charge more money for it.
You could start to build up the business a bit more so that you don’t have to provide all of the services all of the time. It might be that you start to use other freelancers to pass work to, and charging a little on top to cover your time in managing the projects. You might decide to get a part-time administrator or bookkeeper to do some of the tasks that you don’t like doing.
What about making it a grown-up business?
If you want to make some real money or have a business that you can sell on to others, you have to work at making yourself redundant from the business. You have to build up a business that doesn’t rely on you being there and certainly doesn’t need you to be providing all of the services.
That means moving away from the freelancer way of thinking.
You might want to bring in other people in (either as employees or associates) who can do the work as well as you. Or instead of you. Maybe getting some people who can do the work to a higher standard than you can.
It means changing the way that you see the business so that you become the person who is responsible for bringing in the work, checking that it’s done properly, liaising with clients and making sure that the company turns a profit.
It means that instead of you being your own employee, you need to start being the Managing Director, the Marketing Manager and the person in charge of Quality Assurance. This is the idea that Michael Gerber talks about in his book, The E-Myth Revisited.
What’s stopping you having a grown-up business?
I regularly work with people who are taking this step and are building up a company that won’t be dependent on how many hours they can bill for, and that could be worth some serious money in the future.
The biggest obstacle for anyone in this situation is being able to take your business seriously and to work on taking yourself out of the equation. This means being able to free up time from doing the work so that you can spend some time marketing the company.
It means taking yourself seriously so that you present the business as a grown-up company and pricing yourself at a proper rate, so you earn the money you need to live on.
What are the next steps to having a grown-up business?
When I work with freelancers who are ready to take the next steps to building a grown-up business, the first thing we tackle is usually getting the right pricing strategies in place so that they can get their pricing right. You can get a head start on this with my book and resource pack, Sweetspot Pricing. It gives you everything you need to start charging the right amount of money for whatever you sell. Here’s where I explain what I mean by your sweetspot price.
When it’s the right time for you to move from being a freelancer to having a grown-up business, you’ll probably want some help to make those changes. It will be time to start learning some of the skills you need to run that grown-up business. As well as hitting your sweetspot price, there’s also how to get a constant flow of sales coming in, how to handle working with associates or taking on your first member of staff. And how to create systems which make running the business easier for you.
You might want one to one help directly from me through one to one business coaching, where we concentrate on what you need to develop your business. Or, you can join me and a whole bunch of other people working on building grown-up businesses in my Remarkable Business programme which gives you all the support and learning you need to change from a freelancer to a grown-up business.
What else should I think about as a freelancer?
Give your freelancer (or your grown-up) business the Tesco Test
Mark Vaesen’s story from when he was a freelancer before he grew Tomango into a grown-up business
How to feel good about charging more
Think about completely changing your freelancer business by adopting a different business model
Be ready to make the tough decisions