“As a one-person operation, I can only do so many things to grow my business. So I need to choose wisely. But sometimes I’m paralyzed by the sheer number of options. How do I know which choices are best for me?”
I coach other freelancers, and that’s how I’d summarize one of the top struggles they report.
As an independent consultant myself for over 20 years, I’ve lived the struggle. It’s like standing before one of those endless Vegas buffets; how can you choose when you can’t even wrap your head around all the options?
This is the challenging flip-side of one of the wonderful things about freelancing: That we choose our own paths. We get to decide what we want our businesses to be, and how we’ll make them successful. And then we live with the outcomes of those decisions.
The purpose of this post is to make those decisions easier for you. I’ll identify the top five priorities of any freelancer, to make your consideration set more manageable. While I’m in no position to tell you what your best next step is – I don’t know enough about you to do that – I will endeavor to simplify the options and give you a framework for choosing.
Let’s dig in!
Preamble: What’s Our Freelance Objective?
As a freelancer, you’re not looking to build something that can be sold (salable), or that puts you at the top of a pyramid of people (scalable). These are viable business models, but they’re outside of the definition of freelancing. And they’re not what independence means for most of us.
So what’s your objective? To optimize cash flow. Your cash flow, in turn, is a function of your ability to maximize every working hour.
We’ve quickly arrived at two major implications:
First, your time is your inventory. Treat it accordingly. At a minimum, this requires that you track it, analyze it and optimize it.
Second, while revenue is one telling measure of your success, perhaps even more important is your revenue per hour.
Revenue per hour signals your effective use of time. When you increase your revenue per hour, you’re either making the same money from less time, or more money from the same time. Both are pretty good outcomes, yes?
There are two ways to analyze your revenue per hour. I recommend both:
Billable Hourly Rate. On a given project, this is your revenue divided by the total number of hours you invested in a project or client. For any given time period, you can aggregate multiple projects or clients by the same math. You’ll learn, definitively, that some clients are far more profitable than others, and that some work pays much better than others.
True Hourly Rate. This is your revenue divided by your total hours worked – including both billable and unbillable hours. With this number, you’ll quantify the impact of your unbillable time. This will help you make better choices about what to continue, eliminate, minimize or outsource. (At times, you’ll be gobsmacked by the difference between your billable hourly rate and your true hourly rate. It’s certainly happened to me.)
For the remainder of this piece, I will primarily address the true hourly rate, because it’s the best measure of cash flow optimization. You may earn $200,000 a year, but there’s a huge difference in your quality of life if that takes you 80 hours a week vs. 20 hours a week. (The difference in revenue per hour, respectively, is $50 vs. $200 – yikes.)
There are five levers you can pull to increase your true hourly rate. You can drive this number up by being:
- More efficient
- More effective
- More connected
- More sought-after
- More expensive
Let’s talk about each.
More Efficient
Efficiency alone won’t make you a successful freelancer. But I’ve never known a successful freelancer who was inefficient.
As independents, we wear so many hats that we can’t be equally efficient at all of them. And sometimes our efficiency fluctuates on the same or similar tasks.
But in general, we want to do exceptional work as quickly as possible. And methods of increasing efficiency are well-documented. Some that I recommend:
- Block your most productive time for your most important tasks. (This is why it’s nearly impossible to schedule a meeting with me before 11am.)
- Batch or eliminate menial tasks, and set tight time limits for their completion.
- Minimize task-switching and multi-tasking. We’re not nearly as good at toggling as we think we are.
- Work from an outline.
- Eliminate alerts and other distractions. Banish your phone to another room if you have to.
- Outsource anything that falls below your desired hourly rate. Focus on value creation, not administration.
- Analyze your time regularly to plug leaks. (A recent analysis of my own time showed that I was spending over two hours a week reading newsletters. That’s insane! But I wasn’t diligently protecting my in-box, and that’s what happens.)
This is not an exhaustive list. And of course, many of these tactics will also support your effectiveness.
More Effective
When efficiency is decoupled from effectiveness, we get better at doing things that don’t matter. Which is silly.
Our efficiency must serve our effectiveness. And effectiveness is shockingly simple. We freelancers may consider it primarily in two conceptual silos:
Doing the work – Creating positive change, improving the client’s condition, and constantly improving our work product.
Doing the things that bring the work – Marketing and sales activities that bring us more of the clients we’d love to have.
If you’re effective at those (and increasingly so), you can do this freelancing thing forever.
So how do we know if we’re effective at doing the work? Especially when, in many cases, the value of our work can’t be measured for weeks or months?
I’ll offer four ways to get a read on your effectiveness at “doing the work”:
Ask for Feedback. As part of wrapping up every project, ask the client for feedback. At a minimum, you want to know what you did particularly well, where you fell short of expectations, and whether they would hire you again or refer you to a colleague. A simple, well-designed questionnaire should take the client about five minutes to complete and will give you a ton of useful information.
Ask for Testimonials. Obviously, quickly receiving a glowing testimonial is a good sign. It’s when you don’t receive a testimonial that things are tricky: The client may just be busy, or she may not want to attach her name to a recommendation for your work. It’s not rare for it to be the former, but if you’re struggling to get any testimonials at all after several requests, that’s not a great sign.
Follow Up. Much of what we do as freelancers is about long-term impact. So make a note to follow up with the client after an appropriate amount of time has passed to find out what that impact was. Clients are rarely bothered by someone who wants to ensure that their work delivered value. Get a specific number if you can: “Matthew’s strategies increased our revenue by 10% over baseline.”
Check Your Repeat & Referral Rate. Are clients bringing you back in when they have the chance? Are they referring you to their friends and colleagues? If not, it’s potentially a sign that they’re not as impressed with your work as you’d like them to be.
As far as “doing the things that bring in the work,” I’ll offer, at the risk of over-simplifying, two key measures:
Qualified Leads. If you’re not getting enough of the right kind of leads every month, quarter or year, your marketing machine needs to be recalibrated. It could be your offer, your targeting or your tactics.
Closing Rate. If you have sufficient leads but struggle to convert them to clients, it’s worth investing some time in improving your sales abilities.
Each of the above is worth a post of their own, but that’s the blunt shorthand. Remember: As an independent, you are fully responsible for your own sales and marketing. You may hate that reality, but that won’t change it. So you may as well embrace it.
More Connected
One of the most effective things at bringing in the work is being well-connected. Some freelancers do very well by focusing on this alone.
But you have to do it right. Merely dropping likes on Twitter or LinkedIn won’t get you to where you want to be. Your goal is to widen your circle by making real connections, and to deepen your circle by building real relationships.
There are plenty of people to connect and re-connect with:
- Past clients.
- People whose work you admire.
- People you enjoy. You just vibe with some people – for their humor, their intelligence, their perspective or their support. Keep them close.
- People on similar paths. Trade notes and help each other out.
- People with complementary skill sets. Build a network of people whose work and character you trust. If you can’t help a prospect with her challenge, the best fall-back position is to say, “Let me refer you to someone who can help you.”
For people I already know, I keep a simple spreadsheet. About once a week, I pick three names off the list, and send them an email to schedule a call or Zoom. I make clear that it’s a “hello” call, not a sales call, and that I mostly want to know how they’re doing and what they’ve got going on. Sometimes, partnerships or new gigs result, but that’s a bonus.
If you’re active on Twitter or LinkedIn, take the next step to connect with people away from those platforms.
In a post curated by Steve Morgan at his Anti-Sell blog, one contributor, Rachel Wendte, suggested inviting others to join you at virtual events you’ll be attending. It sends a signal that you’re thinking of something the invitee would find valuable, and you can connect afterwards to discuss what you’ve learned.
And, of course, it never hurts to ask for referrals. If “Bob” is a second-degree connection you’d like to meet, and the person between you and Bob trusts you and your work, go ahead and ask for an introduction. Just be careful not to abuse this – you don’t want to be the person who’s always asking for favors and never giving. That’s how you shrink a network, not grow it.
While the potential financial upside to networking is obvious, I find the psychological aspects to be at least as valuable. As freelancers, we can spend a lot of time alone, neck-deep in outputs. When we reach out to others, we deliberately bring positive human contact into our days. There’s no downside here.
If purposeful networking isn’t one of your top marketing activities, maybe it should be.
More Sought-After
Being “more sought-after” means elevating yourself above the common. It’s about being known as an expert, as someone at the top of his or her craft.
One challenge of the online marketplaces for freelancers – I don’t need to name names – is that they can be a race to the bottom. It’s easier to filter for price than it is for expertise. But, of course, you don’t have to opt in.
Better to focus on high value, not low price. A good rule here: “Play to the height of your abilities.” Focus on the top of your skills pyramid, where you’re delivering maximum value.
Allow me to suggest a sweet spot for your offerings:
- Passions – The work you love to do
- Strengths – The work you’re exceptionally good at
- Need – The work the market will pay you for
Check all three of those boxes, and you’ll also be in a positioning sweet spot. You’ll be able to own some aspect of “distinctiveness,” “bestness” or “onlyness.”
This will sharpen your marketing, which should reinforce who you serve, how you serve them, why you’re different and why that matters to them.
Because part of being more sought-after is being more credible, you should support your positioning with proof points. These include testimonials, case studies, client list, work samples, process overview, pedigree, and so on.
Think of proof points as overcoming objections in advance. Your prospects are taking a huge risk when they hire you. They’re placing their budgets, their objectives and their reputations in your hands. This is not something to take lightly! Use proof points to assuage their fears and concerns.
And, of course, you then have to deliver. One of your goals is to do work that’s remarkable enough that people share it for you. Word-of-mouth is the undisputed champion of marketing.
Finally, remember that what you do today is not what you need to do tomorrow. Always be developing new services that will improve the client’s condition, and always be raising the height of your abilities.
More Expensive
When you elevate yourself above the common, there’s another benefit that is not to be ignored:
You command a higher price point.
In large part, pricing is about being worth it. You’re not going to get far by just doubling your rates overnight. (Unless you’re wildly underpricing your services today, that is.)
But if you’re doing something truly valuable and specialized – something that delivers results and improves the client’s condition – a higher price is not only justified, it’s expected.
Of course, this also requires that you ask for a price that’s in line with the value you deliver. Some freelancers are squeamish about the money conversation, and it can certainly take some getting used to. I find it motivational to remind myself that if I’m not asking for full value, I’m leaving money on the table and making Future Me work harder than he needs to.
If you’re a Tesla, there’s no reason to price yourself like a Honda Fit.
Summary: Putting the Five Priorities to Work for You
A focus on revenue per hour – which, as we’ve seen, is directly tied to the value you create – has a positive ripple effect. You start to question why you’re spending any time marketing your low-value services or doing administrative tasks. You realize that every hour counts.
So whether you’re building your annual strategic plan, or just planning your tomorrow, these five priorities are as good a place to start as any.
A powerful question to ask when you’re planning your day:
What is ONE high-leverage task I can prioritize & execute?
In other words, what’s one activity that will help you level up on one or more of the five priorities above? Put it on your calendar and place a fence around it.
And if you’re struggling with your personal strategic plan, start by asking how you can improve in each of these five areas of priority.
Let’s take the example of “Anna,” a graphic designer who’s been freelancing for about six months. She started out with two clients, but that work is nearly complete, and she’s failed to fill her pipeline. She senses that she’s not as productive as she could be, though she hasn’t put numbers to that hunch. And the realization that there’s more to this freelancing thing than just “doing the work” is starting to sink in.
What might be on Anna’s personal strategic plan, with the five priorities as her guide? Here’s one set of options:
More Efficient
Hours Analysis. Anna immediately begins tracking her time. There are apps that can help her with this, but she decides that she can get by with a simple spreadsheet. She sorts her time into categories and makes an appointment with herself to analyze her hours every 30 days, looking for ways to improve.
More Effective
Feedback Loops. Anna adds a client questionnaire to the close-out process for each project, including a request for testimonials.
Continuing Education. While Anna has some experience in top-to-bottom visual identity work, she wants to do more of this valuable work, and realizes that she can improve her skill-set here. She enrolls in an online course taught by a reputable instructor to help her level up.
More Connected
Scheduled Check-Ins. For past clients, Anna establishes 30-, 90- and 180-day and annual check-ins – easy to do with most task manager apps. She’ll check on the impact of the work she’s already completed, so she can add this to her proof points. And without being pushy, she’ll see if there are opportunities to partner again or for referrals.
Network Maintenance. Anna makes a list of past co-workers and other freelancers to stay in touch with, including those with complementary strengths like strategists and social media managers. Once a week, she reaches out to one name on her list to set up a Zoom or a coffee.
More Sought After
“Project Podium.” This is Anna’s name for her initiative to secure speaking events at local business organizations and chambers of commerce. She needs to create a list of topics for each audience and identify the appropriate contact at each organization. Her goal is to secure at least one local speaking event per quarter, to become a known quantity to decision-makers who might hire her. She blocks a little time on her calendar to advance this initiative each week.
Case Studies. To reinforce her expertise, Anna revises the case studies on her website. She first eliminates any that don’t support the work she wants to do. With the few that remain, Anna “leads the thinking” for her prospects; instead of just showing samples and expecting the quality of her work to be self-evident, she frames each case study via a “problem-solution-results” structure.
More Expensive
Signature Offer. While Anna expects to do some one-off projects for cash flow reasons, she doesn’t want to get stuck on the low-value, low-price hamster wheel. So she sets aside time to develop a signature offer, rooted in her passions, her talents and her clients’ needs. To create it, she needs to review other competitive offers, define her process and its outputs, and establish the pricing and promotion. Clearly, this is not one afternoon’s work, so she schedules two hours per week to work on this, with the goal of having a new offer ready to launch in a month.
Again, that’s one set of options – not the only set, nor an exhaustive set. It’s designed to give you a sense of how you might set these priorities into motion to benefit your own freelance endeavors.
Focus on these five priorities and you’ll be way ahead of the pack. Your work time will be sharper, more focused and more productive, so you’ll have more time for life outside of work. You’ll build deeper relationships, and more work will find its way to you. And you’ll be doing more valuable work, and more of it.
My question for you: What will you choose to improve first?
Your time is valuable, and I hope I’ve rewarded it. If so, your shares are greatly appreciated, as I try to spread the gospel to as many freelancers as possible.
Need help turning these five priorities into action? I have a limited number of slots available for 1-1 coaching. Click here to find out more about how my customized coaching can help you level up.
Copyright 2021 – Matthew Fenton. All Rights Reserved.