A few months ago, I landed an incredible freelance opportunity with a prominent firm that enabled me to create my own schedule and work remotely. I am in charge of my hours and overall have the freedom and flexibility to do whatever I want. A few weeks into the job, after I completed and submitted my first project, I was asked for an invoice. The only problem was that I had no idea what an invoice was, how to write one nor did I know what to even put in it! After doing some research on good ol’ Google, and with the assistance of my amazing parents, I was able to put a price on my work that I was satisfied with. I’ve continued to do more projects since then and I recently took this online course from 21ninety (they have a bunch of free, insightful business courses…check it out!) that discussed negotiation and pricing yourself, so it’s pretty safe to say I’m an invoice pro. Well, maybe not a pro lol, I still have a lot to learn, but along the way I have discovered some key tips and tricks to remember when it comes to pricing yourself, which has prompted today’s post.
Blogging began as a hobby for me – it was something I did for fun in my (very little), spare time. As social media began to evolve into a business and the term “influencer” came around, I soon thought to myself, hey, if other Youtubers, Bloggers, and content creators can monetize their work, I can too. The number one piece of advice that I constantly receive from seasoned professionals is to find your craft, learn it, perfect it and if you’re good at what you do, you are going to make money no matter what. Personally, I love to write, research and edit words. Writing has always come naturally to me and quite frankly I believe that I’m talented with it. Although I do enjoy it and would do it for free, I value myself and my expertise so much that I want to…(I will 😉 – let’s #manifest it for 2020) be paid for it.
With this freelance gig, I’m able to monetize my craft…and I am proud to say that I am being paid very well (I’ll let your imagination do the rest). But let’s not get off topic here – my intention and focus is to provide insights on how to create value, price yourself and monetize your talents/passions. It’s so important to have multiple streams of income…that’s how you accumulate wealth. Whether you are an entrepreneur, freelancer, content creator, student or someone who works a 9-5, this post is for you. If you currently have a passion project, but don’t know how to price your work or if you’re trying to negotiate being paid more in general, keep reading! Let’s get to the money 👏🏾💸
How to determine the price of your rates:
TRACK YOUR HOURS
I am paid a fixed hourly rate that was set by the firm (I didn’t negotiate this because, as mentioned before, it’s high and exceeds my expectations), so in that sense it wasn’t too difficult for me to create my first invoice because all I had to do was come up with the amount of hours I worked on the project and multiply that by the set hourly rate. However, coming up with the number of hours itself was not necessarily a walk in the park. Since I work from home, I had to figure out a system for myself where I could accurately keep track of the hours I was actually working. I came up with my own timesheet in Excel and also have a paper one, so that I can keep track of when I’m working, when I’m taking breaks and calculate the total number of hours I spent doing the work.
I also learned to take into consideration the expectations that the firm I work for wants from me. For example, let’s say I am given an estimate from the firm saying that the project I have been assigned should take about 10 hours, but in reality, the project took me 15 hours to complete. I know it seems obvious to just bill for 15 hours, and I’m not saying you shouldn’t. I’m just emphasizing the importance of accurately tracking your hours so that you not only provide an accurate price/rate, but also, especially if you are given an estimate as to how long something should take, you can have a range of knowing if you’re overcharging or undercutting yourself.
CALCULATE YOUR EXPENSES
I’m sure you have seen or heard of Maurizio Cattelan’s infamous artwork at Miami Art Basel. If you don’t know what I’m talking about, you can read more about it here, but basically, this artist created an art piece which consisted of a real banana duct taped to a wall. The banana was featured in this popular art show (Art Basel) and costs $120,000. Believe it or not, multiple people bought the artwork too (not the actually banana…someone ate it, people bought the certificate of art aka the idea). Even if you’re not familiar with this banana, I’m sure you’ve seen art where it looks like a 2 year old drew it…the cost is astronomical and you wonder why. One of the reasons art costs so much is because of the cost of materials used to make the art itself (not in the case of the banana of course lol) but if you think about the cost of the paint, brushes, travel costs and any other miscellaneous expenses that were involved in producing that art…well, it adds up. If you are an artist or you provide a product/service which requires you to spend some money to produce that product/service, then you need to add that cost into your price/rate that you charge!
CONSIDER YOUR LEVEL OF EXPERIENCE/EXPERTISE
You say you’re good at something, but are you good enough to get paid to do it? You need a job to get experience and you need experience to get a job…trust me I know this all too well. The more experience, licenses/certifications or anything on your portfolio/resume that shouts, hey, I’m good at this and lots of other people can vouch that I am talented, really means a lot when it comes to pricing yourself. Can you start freelancing or your own business without any experience? Absolutely. Nothing is impossible, but you have to create and build trust with your clients so that they will be willing to pay you. You wouldn’t go to a doctor who had no website, no reviews and the medical appliances looked used would you? Well, maybe you would, I don’t know, the point is, you need to show people that you know what you’re doing. The more you grow your experience and expertise, the higher you can bill for your products/services. I’m still building my resume and network as well (isn’t it an ongoing thing for everyone?) since I have career interests in finance and fashion, I have to grow my experience in both so that I can be taken seriously when I apply for roles or start a business in those fields. When you start pricing yourself, think about how long you’ve been in the game, meaning how experienced you are in the industry of the product/service that you are selling and adjust your rate accordingly.
DO COMPARABLE RESEARCH
There’s a term in finance called “comps,” which is lingo used when referring to a way you value a company. Without getting too technical here, in laymen’s terms, when you’re using “comps,” you are essentially determining the valuation of the company by using comparable analysis…meaning you are comparing the company you’re valuing to companies that are similar in size and industry. This same approach in business valuation, should be used when pricing yourself. If you’re not sure what your rate should be or if you’re trying to negotiate a deal with a potential client (more on negotiation later), you need to do research on what the typical price range is for people in your industry to give you a better understanding on what you should charge.
I sometimes have to pinch myself because it’s hard for me to believe that I have this freelance opportunity, but when I really think about it, what I’m paid is honestly not so shocking…when you take into consideration who I’m doing the work for, the type of work I’m doing, the industry I’m working in, my experience, the number of hours it takes me to do the work and the overall quality of my work, my rate is (and rightfully should be) high. So should yours. Next time you come up with your rate, make sure you take all of these above factors into consideration to ensure that you are maximizing your value. You’re expensive, you know that? Act like it.
Negotiation Tips to Make More Money
Disclaimer: the following information is inspired from an online course I took with 21ninety.
DON’T SETTLE
This speaks for itself, but just in case you forgot, do not settle for anything less than what you want! This applies to all aspects in your life but specifically when it comes to negotiation, if you are offered a rate that you are not satisfied with or a price that is lower than what you usually would charge, do not settle! Do not take the lower offer. Instead, ask for more. For example, you can respond with: My standard is X, can you match me? If you don’t ask, the answer is always no. Don’t settle, ask for more and go after what you want.
ASK QUESTIONS
Negotiations often fall through because of miscommunication and/or misunderstanding that occurs among the parties involved. In order to be efficient and effective when deal-making, it is essential to ask questions. Inquire about the protocol of contracts, invoices, budgets, etc. This will help you to establish a timeline. The sooner the deal closes, the sooner you get your money. Your time is valuable and you ain’t got time to be wasting your time. Be upfront and cut the negotiation time in half but asking questions that clarify the terms of the deal.
UNDERSTAND YOUR CLIENTS NEEDS
Another key negotiation technique is really understanding the needs of who you’re negotiating with. The pitch that you told one client may not work for another client, so it is essential to be fully aware of what matters to them the most. You can use this to your advantage when negotiating because based on the clients needs, you will know when to lean into certain areas or pivot the conversation so that the deal is successful.
I still like the idea of the corporate life and I see myself going to work in a skyscraper with my suit on and briefcase in hand…but I also really like the idea of working for myself, and the fact that I’m able to do that right now is an honor and a blessing. Let me be clear – I am still very much on my unemployment journey (will make a separate blog post about my uphill battle with the job search once it’s over lol) but for now, the freelancer-entrepreneur-side hustler situation I have going works for me and I truly would not have things any other way.
I also don’t want this blog post to give you a false sense of hope or have you living in a dream world. Working for yourself is not easy and is not meant for everybody. Not all deals and negotiations work. There will be more people who don’t believe in you and who want to see you fail, than those who want to elevate with you and see you win. All money isn’t good money, so you don’t have to take every opportunity that comes your way just because it’s paid. Hold your cards close to your chest and don’t allow anybody to walk all over you. Know your worth and add tax.
I want us all to secure the bag in 2020 and beyond. 💰 I hope this blog post brought you one step closer to creating the lifestyle you want for yourself. Reminder: You are only responsible for your price. You are not responsible for their budget. The only way our price is going is up! Who agrees? Leave a comment and tell me what work you would do, even if it was for free. Let me know, and then we can talk abut how to monetize it!
Until next week,
Kaamilah
