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Going big time all by your lonesome

Coupeville, Earth, Fort Casey, North America, RT30, Speedone, Washington

This following is based upon a recent conversation of mine with a struggling freelancer.

Ah you, you’re encountering the normality of going from hobby to business to desired lifestyle.

Though I make a solid income, it’s from diverse sources that I’ve built up over the years. It’s been the only way to have the vagabond type lifestyle my wife and I have, while still sticking money aside for retirement and family.

It’s probably not warranted, but often I find myself in a business consultant role to friends who go “how do you do what you?”.

At the end of the day, when doing business, you need to make a profit. It hurts having to ask for it, but you’ve got to. Next, you’ve got to charge realistic rates because you can’t count on being engaged hourly as a freelancer, 40-hours a week, 50-weeks a year. As such, I’m hoping you’re at least billing out at $ 65/hour minimum. If you’re in a metropolitan area with those costs, then $ 85/minimum.

You can start working rates up with current clients say $ 10 to $ 20 an hour a year, till they’re at your baseline. Alternately, if they don’t want to pay, you say thank you for your patronage and suggest other providers to them. However, you need to roll away from stressful and non-profitable clients.

Now, once you can confidently quote a realistic rate to a client, it’s time to get off of charging by the hour. That’s a finite monetary proposition. You’ll never quite get to a comfortable stage and even if you think you do, try to take a vacation. You’ll find out quickly you’re probably more tied to that computer than you thought.

So… what to do, you shift to charging for value. This was probably the best trick to securing my revenue stream and having near guaranteed cash flow that I learned about 10 years ago. Basically, this means, offer support retainers on a monthly or annual basis that in writing offers X hours or services at a slightly discounted rate from your normal.

The key here is that while you’ll be busy with these clients getting those monthly hours used up, after 3 or so months, things will settle down and your base rate will actually grow. Why? Because clients soon realize that you’re there for them and that they don’t need to worry about getting value from you. They’ve realized that the retainer is money well spent.

Anyways, using my monthly 5-hour retainer as an example. The $ 525/monthly income usually grows from $ 105/hour to $200 or even $ 525/hour because the end client doesn’t engage you as often. Some of my clients, only get 30 minutes of servicing from me per month. So, technically, that’s $ 1,050/hour.

It’s important though, a retainer-based client contacts you for support, knock it out as soon as reasonably possible. Then you’re seen as a hero and truly vested in your client’s success. By making life easier for your client, they’ll promote you.

Another work for value example. For some of my clients that brought me on to handle projects and then move to piecemeal work, I spent some of my own time, unpaid, to fine tune and automate the piecemeal work. My taking 20-40 hours to build a subsystem, helped turn a $ 1,500 per website build into over $ 1,000/hour. Why? I was able to get the deployment finished in 20 minutes. Even when the client said “hey, money’s tight” and needed to drop to $ 750, I was fine. I was still making $ 750 for 20 minutes work.

Yes, another work for value idea. Do silly things like limit free software in one or a few littles area that are just enough to create demand for a premium product. If you do well with people and support, these users don’t mind paying for quality and you’ll find further, more interesting work through the people that purchase your premium offerings.

A final work for value idea when regarding website monitoring and such. I use http://infinitewp.com/ with various paid modules. Bam, it’s easy daily monitoring and software updates for clients using only a few minutes of my notice per day.

Lastly, I’m finally moving out of doing hosting for myself and others. I want to concentrate on my software and human resources. As such, some of my clients are going to Blue Host or Dream Host, while others have migrated with me to http://WPEngine.com. I do miss SSH and SCP, but there’s quite a few benefits happening, like lower stress in work.

Hopefully I’m not seen as bragging here, but the frank lesson here is, deliver value and clients will pay for it. It takes constant, concerted effort on our behalf to determine what can be done and handled at a value. I’m much happier focusing on socially responsible efforts with small businesses and non-profits.

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Hello, I'm Michael Cannon, Peichi's smiling man, an adventurous water-ratchief people officer, cyclist, full stack developer, poet, WWOOF'er and world traveler.