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> pass on the cheap, low-value projects. Hold out for the clients that have budgets and value your time. Every second you spend with clients that don’t have mon

> pass on the cheap, low-value projects. Hold out for the clients that have budgets and value your time. Every second you spend with clients that don’t have money and don’t value your time is another second you have wasted. I just finished my first 8 months of consulting work and while this is true, it is so difficult to actualize. When we had zero projects, I would take any meetings I could get. A part of me would hope that during the meeting, the client would realize where I could add value and increase their willingness to pay. In reality, however, it was the client who tried to push down our rate time after time. A hard lesson for a novice, but I lost hundreds of hours to clients that I knew, deep down, didn't have the budget. With that being said, this is dangerous advice to internalize pre-maturely. Without underpricing yourself in the beginning, it's difficult to derive self-worth (IE: confidence) and increase your rate later on. And the last thing you want is an early freelancer to turn down work because they think they are worth more. TLDR; Underpaid work might just be a rite of passage in freelancing. It was for me.

Swizec 11y ago
The other problem with not taking undervalued work is that your runway is not infinite, while the market's is. So you might just run out of money before you land that client you're holding out for. And when the end of runway is approaching, you will become desperate, and you will take on a terrible project. Then it will take a really long time before you build up your runway again to the point where you can hold out for better projects. Basically, hold out, but don't wait too long.
sanderjd 11y ago
This is why the word "underpriced" always seems wrong to me in this context. Your price at the beginning has to be lower because your profile is lower, which means you have a weaker negotiating position. "Underpriced" only becomes the right word if your rates aren't rising in conjunction with your profile, which does happen for sure, but isn't the case right at the beginning.
- tertius 11y ago
  "Your price at the beginning has to be lower because your profile is lower" This is the sentiment that makes you justify charging too little.
  - mcintyre1994 11y ago
    So what is the alternative? If you don't have any cheap clients (cheap labour) or portfolio (free labour), how do you convince clients what you're worth?
    - mgkimsal 11y ago
      Arguably, you can invest some of your time in your own portfolio projects that demonstrate the particular skills and value you want to promote. It's not an exact science, and harder in some industries than others, but not impossible, and it's something that too many folks (me included) tend to gloss over or ignore. Keeping a relevant industry-related blog won't necessarily convince every single client, but it's one of those things that can swing someone's mind to committing to you when there's not a lot of other obvious signals.
      - sanderjd 11y ago
        Why is it better to do free work to build a portfolio of non-professional work, rather than building it by starting with lower-paying engagements?
        HeyLaughingBoy 11y ago
        It's not that it's better, but it can be done independently of anything else. i.e., the only thing stopping you from starting to build a "non-professional" portfolio this very minute is time availability. But you need a history of engagements to build a client portfolio.
        tertius 11y ago
        When you build your client base and you start off by charging a low price, any referral work you get (and it gets to be a large portion of your work as the base grows) will have a harder time with raised rates. The underlying psychology shows us that we undervalue ourselves whereas other people tend not to since they view us as experts. They are generally willing to pay a lot more to have a solved problem than we would want to charge. Start high and go higher until you meet resistance.
joshvm 11y ago
However, by pricing yourself high you opened the table to negotiation. Better that than enter low and they accept on the first try, in which case you know you've undersold yourself.
leepowers 11y ago
Shopping malls have this thing called "anchor tenants" - usually a big-box retailer who pays for massive square footage, which in turn stabilizes the mall's cash flow. Looking back, all freelancers should probably wait to start until they can secure an "anchor client". A company or individual with a solid business who can provide consistent cash flow to the freelancer. One anchor tenant won't pay for a whole shopping mall, and neither will one anchor client meet all the freelancer's needs and goals. But it definitely helps stabilize the situation, and empowers freelancers to be more selective about their other clientele. Aside from that - having enough savings on hand to pay for 6-12 months of all expenses (business and personal) is also a necessity. Otherwise you'll start taking on poor clients (and I mean "poor" literally, as in they don't have additional budget to spend, even if they wanted to), which in turn will make you more desperate, taking increasingly shittier jobs. The freelancer death spiral is brutal but can be avoided with careful planning.
- manachar 11y ago
  It's not just freelancers, agencies need them too. Most agencies exist and die on a relatively small handful of anchor clients, if for no other reason than stable cash flow so they can make payroll. By-the-way, these anchor clients usually aren't exciting or fun. In fact, they're usually creatively boring and predictable.
  - bigiain 11y ago
    Agencies need to be careful though - when your relationship with your "80% of the billings" client sours, you've got a _big_ problem. https://insolvencynotices.asic.gov.au/browsesearch-notices/notice-details/Hothouse-Interactive-Pty-Ltd-003409541/a2638148-0238-4d98-8c45-48629ede62fb?appointment=All&noticepurpose=All&noticestate=All&acn=003409541 https://insolvencynotices.asic.gov.au/browsesearch-notices/n...
- CodeWriter23 11y ago
  I can attest to this. Thing is, once you have an anchor client, you need to be reaching for the next one. You never know what might happen to their business...I can attest to that, too.

Swizec 11y ago

The other problem with not taking undervalued work is that your runway is not infinite, while the market's is. So you might just run out of money before you land that client you're holding out for. And when the end of runway is approaching, you will become desperate, and you will take on a terrible project. Then it will take a really long time before you build up your runway again to the point where you can hold out for better projects. Basically, hold out, but don't wait too long.

sanderjd 11y ago

This is why the word "underpriced" always seems wrong to me in this context. Your price at the beginning has to be lower because your profile is lower, which means you have a weaker negotiating position. "Underpriced" only becomes the right word if your rates aren't rising in conjunction with your profile, which does happen for sure, but isn't the case right at the beginning.

tertius 11y ago
"Your price at the beginning has to be lower because your profile is lower" This is the sentiment that makes you justify charging too little.
- mcintyre1994 11y ago
  So what is the alternative? If you don't have any cheap clients (cheap labour) or portfolio (free labour), how do you convince clients what you're worth?
  - mgkimsal 11y ago
    Arguably, you can invest some of your time in your own portfolio projects that demonstrate the particular skills and value you want to promote. It's not an exact science, and harder in some industries than others, but not impossible, and it's something that too many folks (me included) tend to gloss over or ignore. Keeping a relevant industry-related blog won't necessarily convince every single client, but it's one of those things that can swing someone's mind to committing to you when there's not a lot of other obvious signals.
    - sanderjd 11y ago
      Why is it better to do free work to build a portfolio of non-professional work, rather than building it by starting with lower-paying engagements?
      - HeyLaughingBoy 11y ago
        It's not that it's better, but it can be done independently of anything else. i.e., the only thing stopping you from starting to build a "non-professional" portfolio this very minute is time availability. But you need a history of engagements to build a client portfolio.
      - tertius 11y ago
        When you build your client base and you start off by charging a low price, any referral work you get (and it gets to be a large portion of your work as the base grows) will have a harder time with raised rates. The underlying psychology shows us that we undervalue ourselves whereas other people tend not to since they view us as experts. They are generally willing to pay a lot more to have a solved problem than we would want to charge. Start high and go higher until you meet resistance.

joshvm 11y ago

However, by pricing yourself high you opened the table to negotiation. Better that than enter low and they accept on the first try, in which case you know you've undersold yourself.

leepowers 11y ago

Shopping malls have this thing called "anchor tenants" - usually a big-box retailer who pays for massive square footage, which in turn stabilizes the mall's cash flow. Looking back, all freelancers should probably wait to start until they can secure an "anchor client". A company or individual with a solid business who can provide consistent cash flow to the freelancer. One anchor tenant won't pay for a whole shopping mall, and neither will one anchor client meet all the freelancer's needs and goals. But it definitely helps stabilize the situation, and empowers freelancers to be more selective about their other clientele. Aside from that - having enough savings on hand to pay for 6-12 months of all expenses (business and personal) is also a necessity. Otherwise you'll start taking on poor clients (and I mean "poor" literally, as in they don't have additional budget to spend, even if they wanted to), which in turn will make you more desperate, taking increasingly shittier jobs. The freelancer death spiral is brutal but can be avoided with careful planning.

manachar 11y ago
It's not just freelancers, agencies need them too. Most agencies exist and die on a relatively small handful of anchor clients, if for no other reason than stable cash flow so they can make payroll. By-the-way, these anchor clients usually aren't exciting or fun. In fact, they're usually creatively boring and predictable.
- bigiain 11y ago
  Agencies need to be careful though - when your relationship with your "80% of the billings" client sours, you've got a _big_ problem. https://insolvencynotices.asic.gov.au/browsesearch-notices/notice-details/Hothouse-Interactive-Pty-Ltd-003409541/a2638148-0238-4d98-8c45-48629ede62fb?appointment=All&noticepurpose=All&noticestate=All&acn=003409541 https://insolvencynotices.asic.gov.au/browsesearch-notices/n...
CodeWriter23 11y ago
I can attest to this. Thing is, once you have an anchor client, you need to be reaching for the next one. You never know what might happen to their business...I can attest to that, too.