The freelance economy is on the rise with around 40% of people in the creative industries being self-employed nowadays, but pay can vary wildly, with some freelancers scraping by on cans of beans, and a select few able to choose which day they feel like working. With this in mind, at last week’s Power Suit Social, a set of events that aims to keep creative work commercially viable, we covered that most taboo of subjects: how to make money.
Here’s a wrap up of the best tips and tricks for a healthier bank balance, whether you’re already a successful freelancer or thinking of taking the plunge.
Knowing your worth
Unlike their salaried counterparts, it’s a little easier and less taboo for freelancers to open up to each other about finances, and it pays to talk. Panellist Stevie Martin, a writer and performer, said that she makes a habit of contacting her close freelance friends to check “What would you charge for this project?” as soon as she gets approached with work.
A lot of the time, your day rate should be the starting point of a negotiation, and not an immutable price tag above your head. Take into account your travel costs, any equipment you’ll need to hire, and the size of the brand commissioning you - you don’t need to break this all down in your quote, but you do need to know so you’re not undercharging.
It’s also worth remembering that as you haven’t got an agency or employer making decisions on your behalf, it’s your job to make sure you get a pay rise! You should be reassessing your portfolio or CV every few months to consider which brands you’ve worked with, the number of years of experience you’ve racked up and the (hopefully improving) quality of your work. Again, keep comparing with your peers and network contacts to find out what’s normal for your level of work.
Something that united the panel was their experience that as a freelancer, you have to take on certain projects you’re not interested in just to pay your rent, and those jobs can bankroll the “work that feeds your soul”, as panellist Dolly Alderton described it. Directors Greg Barnes and Anna Ginsburg agreed that the films they are most proud of are the ones that brought in very little payment, if any at all, but they were able to really make their mark. By contrast, a one-off project on the more corporate end might bring in anywhere from a couple of months to three years’ worth of rent.
You do of course need to keep track of who is paying you and how much, and most of the panellists admitted that someone (usually a friend of a friend) had built a spreadsheet for them to fill in. You should use your spreadsheet to work out which are your most lucrative clients and make sure you arrange a coffee with them every few months to make sure you’re top of mind for future projects. Similarly, when getting hired by a new contact, ask where they came across your work, and be rigorous with keeping that channel up to date with new work. Consider it Google Analytics for your life.
So now you know how much you’d like to earn, how do you make sure that payment actually makes its way to you? 90 day payment terms are a continual source of pain for a lot of freelancers, even if you invoice with 30 day terms, and generally speaking the bigger the agency or company, the longer it takes to get paid. You can find out if agencies pay on time by checking reviews on The Freelance Circle, set up by freelance copywriter Casey Bird. Freelancers that I spoke to at Power Suit Social have been paid anywhere from two months to nine months late, and in fact one person was owed £10,000 by a company that has now folded.
Employers often take freelancers for a ride, but you do have rights. You’re legally allowed to charge interest if you don’t get paid within 30 days, and often the threat of this at the bottom of an invoice is enough to get employers to pull their socks up. There’s even an interest calculator from the National Union of Journalists, which helps with late commercial payments. Director Anna Ginsburg also pointed out that it’s not too hard to get payments settled through the Small Claims Court, as you simply fill in a form and provide a one-off payment (which varies according to how much you’re owed), which is refunded once you’ve been paid.
But if you’re not feeling brave enough to penalise bad behaviour, persistence is key. Do your best to remain polite when chasing invoices, but get in touch regularly, because if anything, they might pay you just to stop your emails clogging up their inbox. One recommendation (to be used with caution) is setting up another name at your email address so you can act as your own virtual PA - this is useful if you want to keep the drama out of the relationship with your contact. Money is a highly emotive matter, so for freelancers it pays to be equipped with practical knowledge so that money doesn’t rule how you feel about your week.
So remember: talk to your peers, reassess your worth regularly, and take on work for your rent and that will support the work for your soul.