The Freelance Designer Bible
Many designers freelance on nights or weekends for supplemental income or to pick up new skills. Freelancing is a good way to gain a variety of experiences that a day job may not offer.
For others, freelancing is a full-time gig. Today, freelancing is more common and more profitable than it has ever been. Recent data from Payoneer showed that among 180 countries, the average freelancer earned over $39,000 in annual pretax income — much more than the average non-freelancer in those countries surveyed.
The survey also showed that having a college degree does not increase earnings for freelancers. In fact, freelancers without degrees earned $22 an hour, compared with $20 an hour for their degree-holding peers. As I’ve said throughout this book, the tools you need to succeed in this industry are accessible, not locked up in an ivory tower. Upgrading your skills and improving your portfolio are much more important than having a degree in design, particularly when it comes to freelancing.
Whether freelancing part-time or full-time, there are pros and cons to consider. Freelancing is different from having an employer in a number of ways. As a freelancer, you’re on your own. That’s great because you can be selective about your clients and set your own hours. But it can also be challenging because, well…you have to select your own clients and set your own hours.
As a freelancer, you’re responsible for many of the things employers usually take care of when you work within an organization: taxes, insurance, contracts, negotiating project fees, and so on. Even if you only do a little bit of freelancing, following these guidelines will help make it a positive and profitable experience.
Finding (and choosing) your clients
When finding and choosing clients, it pays to be selective. Not every client who is willing to hire you is necessarily the right client for you. Making careful choices about who to work with leads to a stronger portfolio, better project outcomes, and a whole lot less stress.
As you gain more experience, it will become easier to weed out the bad apples. For now, here’s are some red flags to look for:
#1. Unreasonable expectations
If a request strikes you as unreasonable, it probably is. For example, a client wants you to design an entire website in one week for $500. Even if you are interested in the project, that’s probably not going to work. It is also unreasonable for a client to ask for free “sample” work before hiring you (see spec work mentioned previously). A good client will have enough confidence to work with you based on your portfolio, resume, and project proposal. Unreasonable requests upfront are a sign of more to come, so trust your instincts and move on to the next job.
#2. Unclear expectations or poor communication
Is it clear what the client wants you to do? Do you feel confident that you can provide what they’re asking for? If the scope of the project is too vague, you may find yourself doing a lot more work than you bargained for (possibly without being paid for it). If the client doesn’t communicate their needs clearly, or expects you to “read their mind,” the outlook isn’t good for a successful project.
When you take on a client, you are looking at spending significant time together. Is this someone you can deal with for a couple of weeks or possibly longer? If they are already getting on your nerves in the early stages, it’s not a good sign. This doesn’t mean you have to love every client’s personality, or that they have to love yours. Just ask yourself: can this professional relationship work without high levels of frustration?
Challenging issues will arise even in a completely successful project. Someone may have a bad day. A deadline might get missed for one reason or another. An email or voicemail may get lost. If something like this comes up, do you think you can still work with this person? Is it easy to envision handling setbacks well?
Basically, trust your gut. If you have a bad feeling about it early on, you’ll save time and stress in the long run by politely declining and moving onto another client. Ultimately, this is a better business decision. Instead of getting stuck in a contract that isn’t going well, you are much better off focusing your energies on something more promising.
Finding clients… and helping them find you
I’ve talked about the importance of “keeping yourself out there” in previous chapters. Keeping your website and portfolio up-to-date, posting work on dribbble, publishing blogs and articles, and maintaining your networks are all good ways to find clients and help them find you. As a freelancer, leveraging all of these things effectively is the best way to keep a steady flow of work.
Don’t underestimate the power of letting people hear from you directly. As a freelancer, you could potentially spend all of your working hours alone in a room, with only a computer for company. But this would limit your client pool to those who happen to come across you online. Speaking gigs are a great way to gain exposure in front of a large group of people who might otherwise never see you. Offer to talk about something you know a lot about. Demonstrate your expertise and take the opportunity to connect face-to-face.
Outsourcing sites like Upwork help freelancers and clients find each other. Both offer basic memberships for free and claim a small percentage of every payment issued to freelancers. Because they are global in nature, pay scale varies widely. If you are just starting out, these sites can be a good way to get your feet wet as a freelancer. You can upload a portfolio, maintain a profile with client feedback, and build your resume. They also make it easy for clients to pay you through their site, although they do not always guarantee payment from clients. Be especially wary of requests for free work and inadequate client history on sites like these, since they are not scam-proof.
The power of referrals and social media
Going on Facebook to announce that you’re looking for clients is rarely going to work. Most of us just tune out the megaphone approach. But writing a blog post titled “The Power of Photography in Design” will show people that you’re an expert on design. If you post an article like that to your Facebook page, your friends are more likely to refer you to people they know or to their own employers. Show that you’re a subject matter expert even if you don’t feel like it. Remember, don’t let imposter syndrome get you down. You definitely know more about this than the average person, and they will recognize that.
Maintaining relationships is another good way to help clients find you. If you had a great experience with a client, keep in touch in a friendly way. Check in and say “hi” without being sales-y. Just ask how they’re doing, or maybe send a holiday card. A friendly phone call might remind a former client that someone recently asked them to refer a good designer. Or they may have more work for you coming up, but hadn’t thought about you in awhile. As long as you’re sincere, maintaining relationships can lead to more work.
Try using a service like Contactually to make sure you’re reaching out to your contacts enough, and maintaining relationships, while keeping things genuine and authentic.
After an initial conversation about the work, the next best step is to write the client a project proposal. This document is more than an invoice. Think of it as a resume meets an invoice meets a marketing brochure. In a proposal, you’re selling yourself and letting the client know exactly what you are going to do for them.
A good proposal makes it easy for the client to say “yes.” Let the client know why they should hire you. Mention your experience. Refer to work you have done in the past that is similar to this project, and talk about the power of design. Include statistics on what design can do for a business to increase revenue.
Make everything measurable in your proposals. Describe exactly what you’re going to do and what your timeline will be. The proposal should clearly outline the end deliverables. Describe the steps you will take, in what order you will take them, and what the cost will be for each phase.
Always use a contract.
After a client accepts your project proposal, the next step is a contract. You should always use a contract, even if the scope of the work is relatively small. Keep in mind that a contract is beneficial to both parties. Don’t feel shy about asking a client to sign one. It does not signal distrust. Rather, it signals professionalism and the intent to protect both yours and the client’s interests.
A contract outlines expectations. It clearly states what each party is responsible for and defines the scope of the work. It also covers what will happen if the relationship is not working out — how to “break up” amicably. In your contract, it’s wise to include a three-day grace period for deliverables. This way, if something unexpected comes up and you have to deliver something late, you are still operating within the terms of the agreement. Including a grace period simply prepares clients for this possibility.
Contracts should cover all the details: scope of work, how much and when you’ll be paid, when a site will go live, how you will communicate and submit deliverables. In defining the scope of work, make sure the language is concrete. It shouldn’t just say “we will design a website.” It should specify how many pages, what the features are, who is providing the content, and any other relevant details.
A good contract is a roadmap for both you and the client. In fifteen years of doing this, I’ve never been in a courtroom with a contract. But sometimes, I have had to refer back to one: “Just to remind you, according to our contract, this is what happens next.” A contract is more than just a document for lawyers. It keeps the agreement on track and provides security for everyone.
At the AIGA website, you can find a great contract for free. You can also purchase them from Rocket Lawyer or a similar site.
Figure out your process and rely on it
To create powerful proposals and strong contracts, it’s important to know your process, define it, and stick to it. Be able to spell out the steps you will take. Do you start with research, and then do wireframes, move onto design, and finish with coding? Or does some other order work better for you? Figure out each step it will take to do a project, and include this in your proposal and your contract.
Once you have decided on the process, rely on it. Avoid jumping around from deliverable to deliverable. Stick to the steps that you have outlined for the client. This keeps everyone on the same page, eliminates confusion, and keeps you on track with the work.
A word on working with family or close friends…
This can be tricky, and I have a standing policy that I don’t do it. I have some clients who have become friends, but it’s better not to start the other way around. Why? I’ve seen how things can get messy. You get swamped with work. A deadline gets pushed back. Relationships can be ruined.
Also, friends and family are people who may feel like they have complete access to you. They have your private phone number. They can call and text anytime. They can mention to your spouse or other family member that you’re late on a deadline. Now you have your husband, or your sister-in-law, calling to find out what’s going on. Arguments may ensue. Tensions will rise. There are many good reasons to separate personal life from business life.
Of course, you may not heed this warning. So I will offer another piece of advice: If you choose to work with a family member or close friend, don’t change your approach. Write a proposal, use a contract, and stick to your process as you would with any client. This at least reduces the odds of communication breakdowns and tension in the relationship later on.
Managing a project
Once you’ve contracted a client, what are best practices for managing the project?
Project management tools
There are number of project management tools you can use to stay organized. I promise, using these tools save you countless hours and headaches. Email is not the best way to submit deliverables, and it isn’t even that great for communicating. If there are more than two people involved in the project, email can fall apart completely. And all those moments spent sifting through last week’s inbox for an important email can add up to hours of wasted time.
Tools like Basecamp, on the other hand, keep every single thing related to a project all in one place. This makes it very easy to keep everyone informed and clarify individual responsibilities. You can post to-do lists, keep a calendar, upload the contract, share ideas, quickly answer questions, and follow every discussion.
For submitting deliverables, using Invision is much better than sending jpegs through email. It provides constraints and allows for commenting on projects.
Scheduling time to check in is reassuring for clients. It lets them know you’re available and that you’re working on their project. If you check in regularly, they don’t just have to blindly trust that you’re getting the job done. I check in, at minimum, once a week. It could be a fifteen minute conversation or less. Sometimes a client may email to and say there’s no reason for a call this week, but it’s best to let them make this decision. Keeping clients updated, and being available if they have questions or concerns, is one of the best things you can do to maintain their confidence in you and keep everything on track.
Tools like Slack, Basecamp, and Skype are a professional and tactful way to establish boundaries with clients. I once had a client text me twenty times before 9 AM just because she was excited about the project. If I don’t do a good job initially in setting boundaries — like not giving out my personal phone number — I begin to resent the client. But if we keep all our communication on Basecamp, we won’t have that problem. Having a separate business line or using Skype are both good ways to catch up without giving out your personal number. Using these tools is an easy way to set boundaries upfront. It lets the client know: this is how we’ll be communicating and working together.
Money, money, money
Deciding how much to charge for your work is not an exact science. There are several factors to consider: your experience level, the marketplace rates for designers in your area or the client’s area, the project type and client, as well as your own financial needs and goals. Each of these factors should be weighed carefully, and may vary from project to project. Your rates will also change as you gain more experience and expertise, and as you demonstrate these through your portfolio, resume, and client satisfaction.
There are two ways to charge a client: either by the hour, or at a fixed price agreed upon upfront for the entire project.
Hourly vs. fixed price
Some clients have a clear preference for paying by the hour or at a fixed price; others don’t. Often, the client will leave this decision up to you. Personally, I think charging by the hour is a bit more tricky. Fixed price work is more clearly defined. The client knows upfront exactly how much they’ll be charged, and you know exactly what you have to do to get paid. A client may ask you to quote an hourly rate because that gives them a tangible idea of your price range. Even if you rarely charge by the hour, it’s helpful to set an hourly rate. If you have a rough idea of how many hours you’ll need to put into a certain project, your hourly rate can help you calculate the fixed price.
Calculating your hourly rate
As a guideline, here is how I calculate an hourly rate. First, calculate how many hours you work per month that can be considered billable. Then, figure out how much income you need on a monthly basis. For this number, factor in taxes you will have to pay on your income, insurance costs, business expenses, and how much you need in take-home pay to cover your personal expenses. Now, double that number, and divide it by the number of billable hours.
That’s a good start to figuring out your hourly rate, but it’s also important to consider your experience level and the marketplace. Do some research on this. Maybe junior designers where you live are charging $30 an hour, while a mid-level designer charges $70, and a senior designer charges $150 or more per hour. Where are you in that spectrum? This will give you a sense of what you can reasonably expect to command per hour based on the marketplace.
If, by your calculations, you need to charge $80 an hour, it’s important that your experience level is consistent with that rate. As a beginning designer, you may have a hard time finding work if you’re asking far above the market rates. This may mean that you need to increase your number of billable hours (aka, work more) in order to meet your weekly goals, until you gain more experience and can reasonably expect to command higher hourly wages.
Personally, I believe value-base pricing makes the most sense. Here’s how it works: consider the value for the client of what you’re doing. For example, if I design a website for a 500 million dollar company, that site is worth more to them than, say, a website for a local animal rescue. Design doesn’t have to be a commodity like a car where you can say “this is how much it cost to make this and it will cost the same amount each time we make it.” Consider how much value your work will bring to the client when deciding cost, and bring this on board when calculating your fees for that particular contract.
The value of exposure
Here’s another thing to consider: exposure. Think of total cost as a combination of what you charge for the work plus what it will get you in terms of exposure. For example, Nike asks me to design the new Nike.com. If that happened, I’d do it for free. This is because I know that if I do a great job on such a high profile website, it will lead to other clients banging on my door. Exposure is valuable, in and of itself. If you believe that the job will lead to more work being signed, consider that in the cost. That doesn’t necessarily mean you should work for free as in the case of my Nike example. But it might mean the difference between charging $10,000 versus $20,000. You can’t pay your mortgage with accolades.
The most convenient way to bill clients is through invoicing software like FreshBooks or Harvest. I highly recommend doing this to make sure you are paid on time. Those types of software will send auto reminders if the client hasn’t paid, sparing you the awkwardness of reminding the client personally. They also keep your accounts in order.
Don’t forget about TAXES
If you are freelancing, set aside money for your taxes.
Set aside money for your taxes.
Set aside money for your taxes.
Did I stress that enough?
I have seen people ruined over this. It’s challenging to go from working for a company or employer — where your taxes are taken out of every paycheck — to getting paid directly as a freelancer. When you are paid as a freelancer, none of your taxes are deducted for you. It’s up to you to put them aside and pay the IRS, ideally on a quarterly basis.
And, yes, the IRS will come knocking if you don’t. Taxes vary from state to state, and also depend on your business deductions and type of business. A good rule of thumb is to set aside at least 25% of every check you receive from a client. That way, you won’t be empty-handed when it’s time to pay the taxman. Consider this 25% in calculating your rates.
As a freelancer, you are entitled to deduct all of your business expenses, including rent or mortgage on your office space, office supplies and equipment, utility expenses related to your business, travel and mileage expenses — anything related to your freelance business. Saving receipts and keeping accurate records of your expenses will save you a great deal of money and time. Then, you can pass this information neatly over to your CPA.
Bringing in help
If you have a booming freelance business, there may be times when you need to bring in help from other designers. This is called sub-contracting, and it’s common. When you bring in help, you’ll pay the contractor directly. Other freelancers you know personally may even be willing to arrange a work-trade with you — like design in return for development time.
If you’re overwhelmed with work, or something outside your skill set comes up, it is worth it to reach out to other freelancers.
To find contractors outside your network, look to outsourcing sites like Upwork, or simply ask colleagues for recommendations.
Things you need
Technically, everything in the following list is optional. But there’s a reason I didn’t title this section “Things that are optional.” In reality, these are all things you need to protect yourself, your family, your assets, and your business. If you’re freelancing full-time, this is especially important since you don’t have an employer covering any of them for you. Several items on this list also serve another purpose: to establish the legitimacy of your business. This increases clients’ confidence in working with you, and ensures that you will have a stronger and more profitable business.
LLC (Limited Liability Corporation)
The main benefit to forming an LLC is in the name itself: limited liability. It limits your personal liability for any legal action that may come against your business. For freelancers, the alternative to forming an LLC is to remain a “sole proprietor.” In that case, you have no protection. If your business gets sued, that means you are being sued and all of your personal assets are at risk. If you have an LLC, however, your personal assets and funds (separate from the business) are normally protected from the lawsuit.
For this to work, it’s very important to keep all of your business and personal assets separate. Maintain separate bank accounts for each. Use your bookkeeping software to keep personal and business transactions separate.
Another benefit of an LLC has to do with professionalism. Setting up an LLC demonstrates your commitment to your business, and many potential clients will appreciate this. It also makes it easier for them to work with you. When you invoice a client as a sole proprietor for more than $600 in a single year, the client is obligated to file a separate tax form (1099) for you. This involves more paperwork for them. If you have an LLC, the client can simply write you a check and write off your fee as an expense on their taxes. They don’t have to file anything extra on your behalf.
The process and cost of applying for an LLC varies by state, but it is always fairly simple and inexpensive. The initial filing fees range from $30-$200, and in many states the application process is less than a page long. You can find your state’s requirements on the website for your secretary of state. A service such as Legal Zoom or Rocket Lawyer can guide you through the whole process for a relatively small fee.
CPA (certified public accountant)
You can prepare your own taxes, but do you really want to? If you earn a significant amount from your freelance income, it is well worth it to hire a CPA. In my experience, the amount of money and anxiety they can save you is equal to or greater than their fee. In addition to preparing and filing your taxes, an accountant can also give you excellent financial advice and help you plan for the future.
If you don’t have an employer, you’ll need to carry your own health insurance plan. In the U.S., visit Healthcare.gov to get started.
Professional liability insurance
If someone believes that you have harmed their business through your actions, you could be facing a type of lawsuit from which an LLC might not protect you. Professional liability insurance covers you in the unlikely event this happens, for a few dollars per month.
You don’t have to keep a lawyer on retainer, but it’s a good idea to have one you can call. Ask for referrals from people in your network. Lookup lawyers in your area who specialize in freelance, creative or contract law. Call a few and introduce yourself. Decide who you like and hold onto their number. If you need a lawyer one day, you won’t have to search around frantically or simply hire the first one who answers the phone.
As a freelancer, if you stop working, you don’t get paid. That means any unexpected injury or illness could mean you suddenly have no income. If you have disability insurance, though, it will pay a percentage of what you earned over the previous twelve months. Right now, I pay $40 a month for enormous peace of mind. If something happens to prevent me from working, my family still has an income.
Disability insurance is not as often considered as the other types of protection I’ve mentioned, but it is just as important. If you have to apply for disability through the government, it can literally take years to get through the process. During that time, you still won’t have any income. Having your own disability insurance plan will help you sleep at night.