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Revenue can hide unprofitable freelance clients
Freelancers often think about revenue when evaluating clients, but revenue alone can be misleading. A client paying $2,000 per month can look like a great account until you divide that revenue by the total time spent working for them.
For example:
Revenue: $2,000
Time spent: 45 hours
Client-specific expenses: $120
That produces an effective hourly rate of about $41.77. Once you include meetings, communication, revisions, and occasional tool costs, the real hourly rate can be much lower than expected.
Two clients paying the exact same amount can produce very different outcomes depending on how much time they require. I built a small free calculator that lets you enter revenue, hours worked, and expenses to quickly see the effective hourly rate for a client. It’s surprisingly helpful for understanding whether a client is actually profitable.
- SoloBossFounder 7mo agoFor anyone who wants to try the calculator I mentioned: https://soloboss.app/freelancer-profitability-calculator https://soloboss.app/freelancer-profitability-calculator It simply takes revenue, hours worked, and client-specific expenses and shows the effective hourly rate for that client.
- stephenr 7mo agoI can't imagine anyone I've worked with in 20 years of freelancing/contracting who would work for a fixed amount per month without also having a fixed number of hours per month, including any meetings.
- SoloBossFounder 7mo agoMore experienced freelancers yes, but someone starting out, or with a small clientele base, a lot of time don't take things like that into account, especially if they are trying to growing their brand and business. Clarity into revenue matters and can be overlooked sometimes in the pursuit of appealing to a client.
- brudgers 7mo agosomeone starting out Usually, if you are just starting out you will tend to work for bad clients because good clients are those with regular work that pays well who value stable business relationships. Bad clients are those (in order) who don't value stable relationships, don't pay well, and who don't have regular work. The best likely good client for a new contractor/freelancer/consultant is someone you can grow your business alongside their growth...and that's a long term relationship. If you are worrying about your hourly rate, you probably won't make it because relationships are what matters. If you don't have enough resources to build relationships over time, you probably won't make it. Your job is solving client problems (other than paying you).