Freelance

The world of freelancers is populated with more talent than you could ever fit in your box. In 2005 about 10.3 million American workers ( 7.4 percent) were freelancers —up from 6.4 percent in 2001.

Confirmed freelancers — not to be confused with temp workers — find it a stretch to simply land one job and stick to it. The freedom of a flexible schedule fuels much of the creativity embodied in the work freelancers produce. All the genuine freelancers I’ve met have been brilliant. They know their fields and they learn to know their clients. They’re not much for busy work or pro forma meetings, but their experience and project orientation enable them to meet the demands of business more effectively than many nine-to-fivers could.

If your company is looking for talent, you might consider working with one or more freelancers instead of hiring. Freelancers work for sole proprietorships and small businesses as well as larger corporations with the higher costs associated with hiring. Even if the hourly cost or project rate charged by a freelancer seems higher than staffing, it’s generally worth every penny for the ease of the experience. You can find an experienced freelancer and have the project finished faster than you can by hiring an in-house staff to accomplish the same work. And getting out of a bad fit with a freelancer is as simple as not offering further work. Try that with an employee.

If you’re just launching into the freelance life — especially if you’re a recent graduate — it can be difficult to get established immediately. Freelancing is like owning a (very) small business. Even if no one will ever read it but you, you’ll almost certainly find it useful to write a business and marketing plan that identifies your unique offering, and why people should believe you can deliver on that offer (h/t Doug Hall). If you require funding other than fees for services, a business plan is crucial.

Start-up costs for freelancers vary depending on your area of expertise and what you’ve already acquired in the way of necessary equipment (computers, hard drives, cameras, specialized tools…whatever’s required to deliver on what you promise). Whatever you do, resist the temptation to take on extra overhead by renting space or purchasing gear today that you can’t exploit until later.

The most complicated question for most freelancers is, “How much should I charge?” In many instances, you can calculate hourly rates from industry standards provided by sites like payscale.com or salary.com. Then double it. This is because about 40% of your time will be spent doing administration and marketing work as well as research for your client.

Or you can follow the advice of Keith Martin, MacUser Magazine’s technical editor (he lives in London, so you’ll have to convert from pounds to your local currency):

First, a few words on how to approach charging in the first place. Estimate how long the job will take, then add 50% to that figure. This isn’t in order to scalp anyone, it is just being realistic. As well as allowing a buffer for complex issues, it helps protect you when revisions have to be made. If possible, it can be much simpler to discuss things in terms of daily rates or even lump sums for the whole project rather than the relatively bitty and quibble-prone per-hour approach. You still need to know how it breaks down per hour, but you don’t necessarily have to discuss that specific detail with your client. Now, about that hourly rate…

There’s a tried-and-tested method for working this out, and it is surprisingly simple. First of all, decide how much you want to earn per year. Be generous; remember that this is the gross amount, covering absolutely every penny that you’ll spend, from tax and mortgage or rent through to IT maintenance costs. As a freelancer this is all down to you, from the phone bills to the stamps… everything. Forget the fact that you might do other paid work. Assume, for the purposes of this exercise at least, that this will be your sole work and source of income. We’ll pick a figure of £40,000pa for this exercise, but feel free to go higher.

Here’s the magic: just divide this annual income target by 1000, and there’s your hourly rate:
£40,000pa/1000 = £40ph.

As a freelancer, you will be able to manage your schedule and do what you do best. You can even hire a freelancer yourself for administrative and marketing tasks. As a company working with freelancers you can focus on paying only for deliverables from people you may not need (or may not be able to afford) to hire as employees.

In many fields, the spell of the J.O.B. is broken. More and more of us are discovering it’s not the job but the work that matters (a lesson near the heart of InsideWork). As long as we’re honest with each other, there’s no reason we can’t all enter into working relationships where everybody wins.