Setting A "Flooring" to Your Freelancing Rates

After two to three years of working as a freelancer, it may now be time to set a flooring on your freelancer's rates.

I first heard about the term flooring from a Bainbridge Island, Washington-based freelance writer named Carol Tice, who started her career in 2005. She narrated how she got from the status of pricing her services at mid-range to earning six figures. Ms. Tice wrote that "it had everything to do with flooring."

I realized that one of the perks of freelancing as an industry is you can never really set a "ceiling price," or a price that is too high for your services. If you possess a professional attitude and always aim to exceed your clients' expectations, rest assured that someone out there will always be willing to pay you, no matter how high you (eventually) set your fees.

Now, putting a flooring on your rates as a freelancer simply means gradually raising the minimum amount you're willing to accept as payment. Granted, you can only do this by continually honing your skills and being more competent, and by being selective with the tasks and projects you accept over the years.

To illustrate, when I was starting out in my career, I worked on a few projects as a ghostwriter. I wasn't sure how much to charge at first, so I consulted another experienced writer. She advised me that charging Php1,000 for an 800- to 1,200-word article, or a 400- to 600-word speech, would be a good start.

My flat fee for a ghostwriting project was Php300, so that means my flooring for my ghostwriting services would amount to Php1,300. If I got offered a project where the client would pay me less than that amount, I knew that it would be better not to take it, as it would not be worth my time and skills. 

If you have multiple skills, it could also mean having multiple flooring rates. For my resume services, the lowest I charge is Php3,000 if the applicant is seeking an internship or an entry-level position. My flat fee is Php300, so that would amount to a flooring price of Php3,300.

Keep in mind that since I'm based in Quezon City, Philippines, where the cost of living is lower than the majority of cities in the world, I can afford to set my prices at rates that are lower than my North American or European counterparts. I also have cheaper overhead expenses, so I can accommodate more local clients.

Three More Possible Ways to Get Paid for Your Freelance Services

In my previous post, I cited the first two payment schemes that you can use in your freelance business. But you'll soon realize that as your career grows and you get more clients, the need to come up with other ways to get paid is crucial.

Freelance professionals rave over the following:

(3.) Ask for a money transfer.

Getting paid through money order or money transfer is a secure and reliable method if you have clients from different parts of the Philippines. Google "money transfer services Philippines" to know more about this.

(4.) Get paid through PayPal.

If you accept jobs or projects from foreign clients, this is usually the most preferred mode of payment.

(5.) Choose to get paid in kind.

Yes, you read that right! One of the advantages of the field of freelancing is the freedom not to ask for monetary remuneration if it would mean greater gain from your clients. I'll give you a few examples where getting paid in kind could be the better alternative:

• If you write product reviews for consumer magazines or blogs, getting hold of "what's hot" in the market may also mean breaking your budget. Should a business owner ask you to put in a good word for her products or services, it's only reasonable to ask for a "free taste," or whatever is their equivalent of a freebie.
• If you aspire to be a film or music critic, you may be aware of the expensive costs of movie tickets, CDs, and concerts. It would be sensible to start your career supporting the independent movie or music industry (conveniently grouped into a genre called "indie"). Network with film students, or keep tab of up-and-coming bands or performers. I was already well into my freelance career when a band from Scotland emailed me and asked if I could review their self-produced album. To be able to do this, they allowed me to download several of their songs.    

How Do You Expect to Be Paid for Your Freelance Services?

As a freelance worker, you may be charging less than your salaried counterparts since you may have a cheaper overhead, eat your meals at home, and don't spend on corporate attire or daily transportation.

However, keeping a steady cash flow is vital to sustain your freelance business. Even the most experienced freelancers confess to having feelings of reservations when asking their clients to pay up, but in my opinion, if you want to be taken seriously, you must never allow your reluctance to get the best out of you.

Now, you should also make an effort and take time to set up a payment system that is organized yet flexible. I've mentioned before that it's a standard within the freelancing industry to charge a flat rate and a down payment that ranges from 30 to 50 percent of your price quote for the project.

Never start a project without your client settling this rate with you. If you're thinking about setting up an effective payment plan, I strongly suggest the following foolproof methods:

(1.) Ask to be paid in cash after you negotiate with your clients.

This is ideal if you're renting office space or have your own home office where you entertain clients to talk about possible projects. The only downside to this is you might feel the need to have your freelancer's contract written out right on the spot. 

When this happens, clarify all terms and conditions, get everything down on a notebook, ask for the flat rate and down payment, and immediately proceed to type the contract the following day. As soon as you're through, email a copy to your client and begin working as soon as your client approves.

(2.) Require your client to make a deposit.

If your contact with your client is only through email or phone, it would be best to get paid through a savings account in a reputable bank. Ask your client to deposit the required amount.

A word of caution, though. Never disclose your bank account number negligently. If you're going to provide it through email, make sure your password is secure.

In my next post, I'll provide the remaining three excellent ways to collect payment.