For those of you keeping track, this is the second part of a mini-series about paying and working for peanuts.
Today, we look at how accepting low wages affects freelancers.
1. ROI is DOA
Photo/Resource Management Systems
Before you accept work for negligible pay, consider this: what are you really getting for every hour you put into a given project? If you’re making less than $10 per hour, it’s likely not worth your time. I find it’s good to time yourself when doing a job: do it quickly but don’t rush it, add up the time you spent on it versus the pay you’re getting for it. You might surprise yourself – hopefully in a good way. If it’s surprising in a bad way, fix it. Also, keep in mind…
1b. Small jobs don’t necessarily equal crap jobs.
…that doesn’t mean you should dismiss smaller jobs. If you pick the right ones, they’re quick, fairly simple and, if your client is really satisfied with your work, it could lead to a long-term professional relationship. If you’re not especially experienced in your particular field of freelancing, it’s not a bad idea to pick up smaller jobs before graduating to big-budget gigs just to fill out your portfolio. Don’t forget to branch out, though!
2. It warps market expectations.
This may ring truer for clients new to outsourcing and hiring freelancers, but it works for several veterans as well. When several freelancers expect sub-minimum-wage payments for a particular job, they might be giving clients the wrong idea about freelancers; that because we work from home or don’t necessarily have ourselves fully committed to a single company or for whatever other reason, we don’t require at least standard living compensation. It’s absurd to think that way.
IF you do work that you’ve put your heart, soul and technical skills into and IF you’re constantly working to make sure you’re clients are satisfied, there’s no reason you can’t ask for a good price. Because, to quote L’Oreal, you’re worth it.
3. It’s just a jerky thing to do.
I remember one bidding process that particularly made me flip my lid. I don’t specifically remember what the project I bid on was, but I remember being notified that it was awarded to another freelancer. Curious, I went to check out who it was awarded to only to discover they’d undercut my bid. By 90 percent.
In the end, yes, if you bid rock-bottom, you’re going to win jobs, but consider this. You’re not only hurting yourself by cutting deep into a return on your investment, but you’ll eventually be less encouraged to do high-quality work for your clients. The quality of work suffers, the reputation of freelancers as a whole suffers, the price expectation on the market suffers, and you suffer.
When rock-bottom-price freelancers win, nobody wins.
Elance recently published a blog by Toke Kruse. He makes a great point regarding selling yourself short:
Price is the most common parameter people try to use to compete. That is, lowering price to make an offer more attractive. This can be useful when you’re just starting out, trying to land your first job or two. Clients are often willing to give a newbie a try, at a low rate. Underpricing your work isn’t viable in the long run, though: you end up selling yourself short, and bringing in less money than you really need.
If you stick to and sharpen your specialist knowledge and skills, you can and should charge higher prices. Once again, this is why it’s so important to have a strong portfolio – if your stuff is top-quality, demonstrates your expertise and is unique, potential clients will recognize it and hire you. They’ll see they don’t need to go elsewhere – or can’t, because no one else is as good as you! The dialog becomes less about price and more about delivering exactly what they need.
A great portfolio, profile and top rankings combine to let you charge higher rates and increase your earnings.
Do yourself and all of us a favour – if you do good work, don’t sell yourself short. You’re worth the money if you stick to your expertise and keep your standards high.
Thanks for tuning in, dear readers! I’ll talk to you all next week.