Getting paid as a freelancerEstimated reading time: 3 mins
One of the unknowns that comes with being a business owner and a freelancer is your cashflow. You may not know if work will be there next month. Thus, making your cashflow more predictable is a necessity for the longevity of the business.
There are a few different ways that you can get paid as a freelancer:
- Money upfront before work begins
- 1/Y money upfront before work begins
- 1/X money per submitted feature (project divided into number of features)
- No money upfront before work begins
Thinking about cashflow is one of those things that gives me stress and anxiety. I started to pay attention to this recently. Given my experience and my portfolio I have been using option 2 for new projects. I don’t think I will be using that moving forward. I will be moving to a model combination of 1 and 2.
Beyond option 2
Option 2 is not ideal for my productivity and mental health. It causes stress that is not necessary to a project. When I am working on a project, I want to focus on the project and not on checking how many hours I clocked. This is not to say that I came to this conclusion out of nowhere.
I’ve tried both options 3 and 4, and I do not like that type of business exchange. It does not create a dedicated relationship between the two parties.
Success of a project
A project requires team mates. From my experience, the best output comes from a team where everyone has equal input. How can I, as a contractor, form this business relationship with our client? I know that money exchange is a challenging subject for everyone. During the initial transaction, solidify that and get it out of the way.
I know that a client has money set aside for a project. I know that they need an outside professional to help them build their vision. I know that the world has many professionals.
Client is thinking of hiring me because I am a professional and because they selected me among many. There will be a discussion about rates. This is where marketing skills come into play. Both businesses want an equal exchange.
I know that when presenting them my their pricing options I cannot mention stress or anxiety. Those factors are part of business and everyone experiences them. However, I can mention my productivity and project commitment. I can mention that I work better when I don’t have to think about the cashflow.
The money exchange, to me, is a commitment from both sides to be business team mates and to see this project into fruition. From my side, when I receive the money, I agree to set time aside and dedicate it to this project. I agree to be engaged in the success of the project. When the client sends the money, I gain trust in the client’s trust in me as a professional.
What if they don’t like it?
First, you need to be in a position where you can present options 1 and 2. How to test this out? If you are asking this question, you are not there yet. If you are new, you can join something like Upwork and try your pitches on projects with your current portfolio and experience.
Second, I said that the client has money set aside for the project. Well, if they do not or if their cashflow is variable then this response will be an indicator of that to me. At which point I will decide if I want to take this client on or not.
There is more work than there are workers.