I just sent off over NZ$15,000 worth in invoices for freelance design work performed last month. It might have been my most lucrative month ever. I’d like to talk about what’s making this period profitable for me, and share how I’ve gotten to this point in my design career.
I’m a freelance UI/UX designer in Auckland, New Zealand. I’ve been doing it since 2001 — starting part time as a student and then building my freelance business into a full time gig shortly after graduating. I’ve never been employed. This is all I’ve ever known.
I’m a T shaped individual with a broad range of design experience, but my bread and butter is in providing tremendous value to my clients all the way through a product, app, or website’s creation cycle: right from initial strategy, through IA and UX design, and UI design. I often do front-end code too, and sometimes even development.
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What I didn’t do
How did I set a personal best in monthly freelance earnings?
I didn’t work insane long hours, burning the candle at both ends and burning myself out in the process. In fact, my normal work day is 9:30–5:00 with a comfortable lunch break in between. I occasionally work a bit in the evenings, but that’s the exception not the norm.
I have a wife and two kids who I spend a lot of time with. I exercise before work each morning to keep healthy, and even find time to meditate now and then. By no means is the balance of my life suffering just to earn a lot of money. Life is too important (and money not important enough) for me to do that.
I didn’t churn out work as quickly as possible to maximise profits on fixed project quotes. Nor did I subcontract work to cheaper creatives so I can reap the profits of marked up labour. Everything I do is of the utmost quality, performed by me, every time.
I didn’t even make passive income. None. My last passive income side project was sold over a year ago and I haven’t yet launched a new one.
Are you working for cost-clients or value-clients?
Knowing the difference will mean everything to your freelance business.
It’s all about reputation
Earning good money as a freelancer starts with having great clients. I’ve spent my entire career defining who my ideal clients are, and then working towards landing those projects. There is no magic bullet here. Without a stroke of luck, rookie freelancers don’t land the kind of clients they dream of. Everyone successful in this business has been willing to put in the work to get there.
More than anything else, this requires building a reputation. As a freelancer you live and die by it. The foundation of that reputation is doing excellent work, over and over again. Every client deserves your best effort. Deliver it every time. Your clients will be thrilled with your service, and eventually they’ll talk. They’ll tell their family, friend, and colleagues about you, and boom — more work.
Word of mouth referrals are the bee’s knees. Of course you’ve heard this before, but have you really thought about what it means?
If you’re shopping for a new car, computer, doctor, or lawyer, you asked people you trust for their recommendations. You take their recommendations as a starting point, do a bit of your own research to validate them, and then commit to one of the recommendations.
Why? Because if you trust who it’s coming from, and they say it’s good, then you trust that it’s good. You are pre-qualified to trust that recommendation based on the weight of trust you have with the human it came from. You usually don’t bother looking into alternatives outside of what was recommended.
When I get a referral from an old client in this way, the new client comes to me already respecting my expertise and experience, trusting my process, and eager to work with me. There is no hard sell required. Usually no sell at all. My reputation has already sealed the deal.
In fact, I’ve had word of mouth clients delay their project for months until I become available, because they consider working with me essential to their project’s success. After all, working with the right people is always more important than niggling over price or timing. If a new client believes you’re the right person, you’ve won yourself a potential unicorn.
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Referrals are the holy grail of freelance client acquisition. But they don’t come automatically. So, how do you get…
What if I never get word of mouth referrals?
You will over time. But if you’re not quite there yet, don’t fret.
You can still build the same level of trust very early in the relationship, and reap the same benefits.
I’m currently working on a job for a small web dev agency. They recently lost their full time designer and were looking to hire a new one. I told them I wasn’t interested in a full time position, but I’d happy help them fill the gap by contracting to them for a few projects until they found a new designer to fill the role.
I met with them once for 45 minutes. They asked me questions about my process and experience, and I answered honestly. I asked them some in return. I walked them through a few of my case studies, explaining the design challenges of each one and justified my solutions.
After the meeting they told me they were giving up on hiring a new designer right away. They said I had raised the bar of what their expectations of a senior designer should be, and none of the people they had been interviewing came even close.
That one meeting instilled so much trust that they wanted me on their next available job.
All it takes is one phone call or meeting to give people confidence in what you do. You just have to know what to say! That’s a topic for its own article, but if you’re confident in your own process and abilities, just be yourself. Be 100% open and honest about how you work, and if they know what they are looking for, that genuine interaction will shine through.
Your reputation is what earns the trust and respect of great clients. Nurture that reputation, always. If you haven’t been doing it since day one, start now. No amount of effort put into building your reputation is wasted effort.
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Transcend the rat race and let your unicorn shine.
Charge what you think you’re worth.
Now add at least 20% more.
Warning: what follows is actual talk about real dollar figures. Yes, it’s OK to talk about money.
All of my current projects are billing within the range of NZ$120–$150 per hour + GST. (For non NZ/AUS folks that’s “Goods and Service Tax”, similar to sales tax. It’s 15% here). Newer jobs are generally $130–$150 while some older clients are still on $120. I also charge on the lower end of that spectrum when subcontracting to an agency, as they generally need more room to mark up.
A few years ago I believed I was hitting a ceiling at around NZ$100 per hour. I hadn’t raised my rates much in years, despite a tremendous amount of additional experience and efficiencies gained during that time. When talking to a few colleagues I realised that ceiling was all in my head. I was producing work as good or better than most agencies turn out, so why couldn’t I start charging closer to their $150-$200 rates?
The answer is, I could. There was no reason not to. I raised my rates 20% overnight (and more since then), and never had a decrease in clients knocking on my door. If anything, it led to more clients.
The foundation for a high-end rates comes back to having a rock-solid reputation, and from doing truly world-class work, over and over. You have to hone the skills and gain experience enough to justify those prices.
What to charge as a freelancer: does value-based pricing live up to the hype?
My thoughts on value-based pricing and what I do instead
How do you know if you can justify it?
Simply put, do your clients feel like they are getting good value from you? That’s it. Ask them straight up if their behaviour doesn’t make the answer obvious.
If they keep coming back for more, the answer is yes. If at the end of the project you go your separate ways and never hear from them again, then maybe not.
Research pricing in your industry and location. Know how you fit into that market. Do your skills and experience align with that position you sit? If you work quickly and efficiently compared to your peers, consider how that may give your clients more value, and increase your rate accordingly. Don’t be afraid to test the waters. You can always reduce your rate if an increase fails.
You’re probably calculating freelance rates all wrong — so follow this strategy instead
Even when you charge by the hour, you should be thinking in terms of value, not time. Follow this pricing strategy to…
Embrace long, complex jobs.
Over the last few years I’ve been doing more and more work designing web apps. Big, complex, responsive web apps. The kind of jobs that may take 2+ months just on IA, user flows, and UX wireframes before you even get into the visual design. The kinds of jobs that might last a year of continuous work.
That’s right, a year.
A few years ago I did design and front-end for a web app and its marketing site. The project lasted almost exactly a year, including some add-ons like branding, print design, banners, etc.
At the moment I’m in the middle of another similarly sized job. We’re over six months into it, and while the end is in sight, there’s still a long way to get there. It may very well end up being a year from start to finish, with smaller pieces of ongoing work after.
I hear you saying it already:
“A year long project! I would get bored. It would get stale. I became a freelancer precisely to get away from that kind of work!”
I agree. Those were my concerns as well.
Part of the reason I love freelancing is the freedom it brings of choosing your clients and projects, which more often than not means choosing variety, trying new things, pushing your limits.
No matter how passionate you are about the project, and genuinely interested you are in success of the business, when you get six or nine months into it, you can start to lose enthusiasm.
However, these long engagements are well worth it! They provide consistency in scheduling, workload, and income — all things that even the most seasoned freelancers struggle to maintain.
Here’s what I do to make those long but ultimately fruitful projects remain interesting all the way to the finish line:
- Always be working on two or three projects at once. I find it’s rarely possible for a single project to have enough workload and a quick enough feedback/iteration cycle for it to be full-time. I divide my workload between two or three jobs running in parallel, which makes a good balance that keeps them all moving along at decent velocity. My clients have a clear expectation up front of how much of my time I can devote to their project. Setting client expectations early and often is key to making this work.
- Build variety into your work by being choosy about what projects you take on. If I’m 6 months into a complex web app interface design, the last things I want is another similar project. I’ll go out of my way to look for something on the opposite end of the spectrum to balance it — perhaps a really visual brochure or ecommerce site. Something with a smaller timeframe that will let me flex a different set of design muscles for a while. That may mean turning down great jobs for clients I love, but maintaining joy in my work is more important.
- Get invested in your client’s success. Really, seriously interested and passionate about it. This starts with picking clients who run businesses you admire and can find some personal interest in. You need to build up your career to a point where you can afford to turn down a lot of work so you can be very choosy about what you accept. Only accept work that aligns with your interests, strengths, and ethics so you can confidently invest yourself into the process and outcomes. I know this is a luxury that many people don’t have, and I feel privileged to have it. If you don’t have that luxury, start small. That first little “no” may empower you to say the next harder “no”, which paves the path to choosing your ideal projects.
- Control the process so it doesn’t control you. Remember, your client isn’t usually an expert in design. They are looking to you to outline the best creative process for how you achieve their goals. Setup a process that works well for you and know how to justify that process. This is important because it means you always feel you are doing something valuable and worthwhile. You are always on the right trajectory towards the finish line. There’s nothing worse than doing work you feel isn’t worth doing.
If you can balance all of those things, taking on steady, high-paying, year-long projects with clients who completely trust you is a great step towards making bank as a freelancer. It’s a heck a lot easier than finding an endless supply of new clients with small month-long jobs.
Long, complex jobs also tend to be the ones that have the highest need for the most valuable skills. For example, if a newly funded startup is investing $100,000 in a year-long web app project, they care deeply about the user experience, and market fit. They care deeply about conversion rates, brand positioning, and fine tuning user flows. They need to find someone who they can trust to look after all the important details they may not even be aware of, let alone forget. The project is too big and stakes too high to let things slip. You want to be that person who guides them through it. To them, that is nearly invaluable.
Contrast that to a $5,000 WordPress site you crank out in a few weeks. There are a million fish in the sea who can design a $5,000 blog. There’s not enough room in that market to differentiate your skills from the others. And there’s not enough risk or rewards for the client to demand only the best people on the job.
Smoothing out the freelance rollercoaster
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The bigger and more meaningful a project is to your client, the more they should value your guidance. Hunt for the sweet spot of large, complex projects balanced with the type of work that best suits your strengths and schedule. If you find the right balance, you will be rewarded with both good pay and more peace of mind.
Use your time efficiently
Most people, no matter what type of work they do, in some form or another trade their time for money. Of course there are other ways to price your services, and there are more lucrative methods to earn money. But at the end of the day, trading your time for money often turns out to the easiest and fairest way to operate. It’s how most people work.
So it goes without saying that you offer your clients more value if you use your time efficiently. (You also benefit yourself of course). It’s not just about the speed of work, but also how you manage your schedule and your daily routine.
If you want to charge high-end rates, you need to be able to justify that with quick work. If I charge twice as much as you, but can get the job done in the half the time, I haven’t cost the client a dollar more. But had they compared our hourly rates only, they’d probably have said “hell no” to my rate when the guy next door can do it for half.
Many clients will think like that, and that’s why there will always be room for bottom feeders. But those aren’t the client you want anyway! You want clients who care first and foremost about results, because if you can’t deliver results, it doesn’t matter how cheaply you can deliver your services.
Much of what brings quick work is simply experience. If I’ve solved a similar design problem 10 times already, I’m well equipped to know what potential solutions may work again. If I’ve designed a similar sized app many times before, I’m familiar with the process and potential pitfalls, and can confidently navigate myself and the client through them.
A junior designer with far less experience could experiment for an entire day to come up with the same solution. That designer isn’t doing anything wrong. He/she simply doesn’t have the experience to expedite the situation.
The important distinction to make here is that quick work needs to remain excellent work. Never sacrifice quality for speed. You want quality AND speed. We’ve all see the venn diagram with speed/quality/price. Pick two because you can’t have all three. You want to work at the intersection of quality and speed, because this is the point at which the good clients live. Those clients that value strategic design thinking. The ones that would go 10% over budget to deliver a great result, because budget is meaningless if the objective hasn’t been met. These clients aren’t just the ones who pay better. They also tend to be easier to work with, and their projects more creatively fulfilling.
Fast design vs. quick design
Do you struggle to match the speed of your more experienced design colleagues?
What I’ve described above is efficient use of billable work time. But we all know there’s a lot more time in the day that you spend “working” that doesn’t fall into that category. If you want to maximise the percentage of your work time that actually translates to productive billable hours, you need to structure your schedule to achieve that.
For some people that means removing distractions. Maybe you only check your email or social feeds a few times a day so you’re not sucked into that red notification bubble. Maybe you get all those annoying little tasks out of the way first so you can get them out of your head and the remainder of the day is clear to focus on the big, deep projects. Maybe it’s means taking on fewer projects at a time so you aren’t pulled in too many directions at once. Maybe it means taking on more projects so you have gap filler work to sneak into those extra 30 minutes at the end of the day.
I’m not going to advocate a certain style of work or routine right now (I’ll save that for another article). People are so different and what works for me may be the opposite of what you need to get the most out of your day. The important thing is that you’re thinking about it. There are things you can do to make your work time more efficient. Identify them, and then do them. Now.
Have you hit the trifecta?
It’s taken me over a decade of freelancing to put all these pieces together. Sure, I’ve had good periods in the past and glimpses of these elements converging. But these aren’t things that come overnight no matter how much of a rockstar you think you are. They are layers that need to be seeded, nurtured, built up, and supported over years of giving your best effort over and over again.
When a strong reputation brings good clients, who are paying high-end rates for quality work, and getting good value from your efficient use of time and experience, you’ve hit the magic trifecta of freelancing. You’re in the sweet spot.
I was in it last month.
If you’re in it, enjoy it, because we all know freelancing can be a rollercoaster. You may be upside down on a loop next month.