Giving yourself a raise is an oft-trumpeted goal for freelancers and creatives. But in order to pay yourself more money, you usually need to take on more work. There’s a running joke that entrepreneurs and freelancers are the only ones who will work 60 hours a week to avoid working 40 hours a week. I would argue that giving yourself more time might be just as important as getting more money. By making your business more efficient, you can raise your hourly wage even if your total income doesn’t change, and that means you can give yourself more long weekends or vacation time.
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Giving yourself a (hourly) raise
I recently made it pretty far in the interview process for a full-time job. The stability (and not having to do my own marketing!!) was incredibly appealing, and it was an interesting role at a neat company. But one thing that gave me pause was the salary. Yes, it was more money in a year than I’ve ever made freelancing, but it also required me to work full-time, which I haven’t done since becoming a parent. It made me wonder: Would I rather make $1,000 for 40 hours of work or, say, $700 for 20 hours of work? (For those without a calculator, that’s $25/hour vs. $35/hour.)
In most cases, I’d rather have the extra time and make a bit less money overall. In The Before Times, it was possible to trade money for more time by hiring someone to clean the house or babysit. Right now a lot of those options aren’t available to us. So working more hours just means…less time. (And more money for later, of course, which I don’t want to undercut.) No one can take my place as a parent or partner, so to me, time is basically always more valuable than money.
Giving yourself more vacation time
If you need or want the money, and have the time, that’s totally fine too! I just encourage you to think about the value of your time NOT working as well. In other words, how much vacation time, long weekends, or mental health days do you want to be able to give yourself? Most business owners I’ve met didn’t start their business in order to make loads of money, though that isn’t to say we shouldn’t generate plenty of profit. The majority of entrepreneurs do what they do in order to A) spend their work time doing something they enjoy; and B) have flexibility and time off for caregiving, hobbies, or self-care.
And so the amount of time it takes to make a certain amount of money matters just as much, if not more than, the amount of money itself. I can run a marathon…over the course of four days…but no one’s going to give me a medal for that. Pace matters. As of September 1, 2020, my year-to-date income had already surpassed what I made in all of 2019, so I promptly decided to take November largely off. I desperately needed the break, and I’m not sure any amount of money would have made it worth pushing through this month. (I mean, I’m sure there’s SOME amount of money, but it is not likely to come to me.)
Becoming more efficient
I’m always looking for ways to raise my bottom line hourly rate, which is computed by dollars over time spent working. If you remember fractions, I can increase the rate either by increasing my income while working the same amount of time (or less), or reducing the amount of time worked while keeping my income the same (or more). Upping your rate is often harder than just increasing your revenue because you have to do more without spending more time. But here are a few strategies I’ve found helpful when working to become more efficient.
1. Track your time
I suggest that every freelancer track their work time carefully for 2-3 months. Knowing where your time goes will help you set your prices appropriately, identify and fix holes in your productivity, and maybe even reduce procrastination. I am generally fairly focused and motivated, but knowing I have a clock running on a task can prevent me from squirrelling off. Though I never charge hourly anymore, time tracking also helps me know how much time I spend on billable client work vs. non-billable admin, bookkeeping, marketing, etc. The higher the ratio of billable to non-billable time the higher your hourly rate will be.
2. Structure your work day/week/season
This will look different for everyone, but some sort of predictable structure to your work day and week can help you stay on track. Batching similar tasks means there’s less energy and attention lost when switching. I’ve done my best to schedule all my calls and appointments on Wednesdays, and when that’s not possible, I at least keep Tuesdays and Thursdays as my heads-down work days. It can make for long Wednesdays but the uninterrupted time is absolutely worth it. Take a look at the recurring patterns in your work – maybe you meet with a client every two weeks or have seasonal ebbs and flows in your workload – and plan ahead for them.
3. Streamline processes and operations
It can be tempting to reach for software and gadgets that promise more efficiency, but make sure you examine your underlying processes first. Don’t just buy tools willy-nilly. Now this is tricky because sometimes you don’t even know what improvements are possible until you use a tool that makes improvements possible. But try to figure out exactly where you’re getting tripped up. Don’t just say, “I hate bookkeeping, let me hire an accountant.” This is generally a good move, sure, but if your issue is recording expenses, an accountant can’t follow you around 24/7 tracking your expenditure. A system for filing email receipts into a folder might solve the actual issue. Some of my favorite operations tools include Calendly for appointment scheduling, Timeular for time tracking (I like the gadget but the app isn’t my favorite time tracker of all time), and Dubsado for proposals, contracts, invoices, and more.
4. Specialize to standardize
I’ve always been a Jenn-of-all-trades, able to do everything from logo design to building websites to content marketing to copywriting. And I did most of these things well enough, but it was actually inefficient to have so many service options. Every time a lead asked for a new service type, sure, I could figure out how to do the work, but I also had to figure out a new process, pricing, documentation, on and on. And, like bridesmaids dresses, I never actually used most of these twice. My business management software and the back end of my website are just a graveyard of packages and sales pages that I used once or twice and never touched again.
About two years ago I started paring away the things I was okay but not great at and partnering with specialists who could do a much better job. Then, after a few false starts, I took my most frequently booked service and turned it into a standardized package that served a specific need: the 1-Day Website. There’s always room to add to that package, but that was the baseline process and price from which everything started. I was able to set up one standard proposal and then modify timeline and other details as needed instead of writing a custom proposal every single time.
Choosing a specialty and crafting packages that deliver results saves you time and energy reinventing the wheel every other week. It takes time to be familiar enough with your clientele and yourself to create specialized packages, but once you’ve gotten a year or so under your belt, I recommend taking some time to hammer it all out.
This is where a lot of entrepreneurs seem to fall down, and I actually first learned about the value of outsourcing from an otherwise terrible employer who tried to cheat me out of $4,000 in wages, but that’s a slightly different story. After every deal she did, she would sit and tally an estimate of how much time she spent showing properties, holding open houses, negotiating the contract, coordinating inspections, etc. for that particular transaction. And she would always have a line in there for my time spent making flyers, posting photos, and doing general admin related to that client.
She valued her time from $150-$300 per hour, depending on what the task was, and mine at $21 per hour. And that isn’t totally unfair, I certainly didn’t have the knowledge to negotiate a home sale or the professional network to bring in a buyer. She understood that wrestling with Microsoft Publisher wasn’t the best use of her time, so she (eventually) paid me to do it.
As freelancers we may feel that no one else can possibly understand our business, but that can often be a disservice to ourselves. Is the client paying you to deliver the amazing results you’re capable of achieving, or are they paying you to fiddle with your stupid website for hours? (Well, technically, your pricing should cover your overhead time, but is it really the best use of your time and talent?) Check your time logs and processes for things that can be automated or outsourced.
6. Pre-qualify clients
In the earliest days of my business, my projects came from Upwork. I was really picky about what I sent bids for, so my acceptance rate was relatively high, probably above 50%. If you’re sending cold bids on sites like Upwork, make sure the budget, client type, project type, and timeline match your needs really well so you’re not chasing shitty projects. After about six months in business, the vast majority of my projects came from inbound leads who sought me out, for which I am super grateful. But for the first two years or so, I burned a lot of time on calls and putting together proposals, only to discover that I was way out of their budget or that they were just window shopping and not really committed to the project.
I learned to ask the budget question in the preliminary email exchange, and eventually on my intake form. The “Contact Me” form on your website is a great place to ask a few basic qualifying questions instead of just Name / Email / Message. If you’re an events-based business, ask them what date they have in mind. Even if they haven’t decided for sure, it will get them to start thinking about it before you take the time to get on a call with them. If you’re a coach or consultant, ask them what they most want to improve and by when. This will help you determine whether you can help them.
You can even set up a pay-to-play mechanism where any and every potential client must pay to have you complete an audit or some other discovery process. This will instantly weed out the looky-lous who are just browsing and don’t know what they want, or the dreaded brain-pickers. (And you’ll actually get paid to scope the project.) You cannot and should not try to serve every client who comes your way. Make sure a lead is qualified before you invest time in a call or proposal.
7. Raise your value
I saved this for last even though raising prices is often the first thing people think of when they decide they want to earn more money. And that’s because a client will not care that you need to make more money. Their main goal isn’t to pay you, they want to get their needs met, and so you need to frame your pricing in terms of the value you deliver to them. Maybe raising your rates means you can hire a VA to tackle admin work so you can spend more time on client service. Or you can dedicate an entire month to one client instead of dividing your attention between three smaller projects.
When you reach a certain level of skill and serve a certain type of client, oftentimes the deciding factor in whether they hire you and refer you to others is no longer how good you are at the work but how seamless your process is and how well you can guide them through it. And as much as I yak about creatives pricing themselves professionally and profitably, you still have to earn those rates. And the funny thing is, niching down to a few specific offers, streamlining your processes, getting really good and really fast at what you do — all of that makes you more efficient internally but able to deliver better customer service to the client.
Thinking back to the hourly rate equation, ideally you change both factors: increase the amount of money you bring in and decrease the amount of time you work. Your time is the most valuable thing that you have, so set up your business (including but not limited to your prices) in a way that respects your time.