Freelancers are a courageous people. We continuously bet on ourselves rather than wait for others to give us what we need. We clear our own paths,
As a freelancer, your most important asset is time.
How you manage your time will make or break your business (and your life).
Many freelancers choose to work long days in order to use every hour they humanly can.
But the difficult truth is that you can’t really go very far without compromising your health and relationships when you follow that approach.
Long shifts won’t guarantee you will be more productive or that your freelance business will be more profitable.
In fact, I have seen that the most successful (and happiest) freelancers aren’t those that work the most but the ones who balance themselves better.
Don’t forget: running a successful business is a marathon and not a sprint, so the trick to being a profitable freelancer is not working more hours, but leveraging time for the highest ROI possible.
But, how can you increase your ROI (Return on Investment—both time and money) as a freelancer? In other words, how do you scale your freelance business without burning yourself out?
In this article, I’ll outline some of my best advice based on over a decade of working with and coaching freelancers and solopreneurs.
Build systems and processes
Since your time is limited (and valuable), you want to make the best out of it.
You can start by automating your sales processes.
There are solutions for everything—from prospecting to outreach and follow-up—you can set up automations or workflows that will make your life easier and increase your freelancing ROI.
Technology solves this for you, and you don’t necessarily need to be a tech genius to achieve it.
The coolest thing about this approach is that you can transfer it to almost every area of your business. You can:
- Transform and adapt your onboarding processes so your clients get started smoothly (and without a ton of effort on your end).
- Improve your project management systems to get more stuff done and deliver everything on time.
- Optimize your invoicing and finance management processes to get paid and track revenue.
Those are just some ideas to get you started.
With some creative thinking, you can cut on a lot of costs and time-consuming tasks, giving you more time to work on activities that make you money.
Say “No” more often
Every time you say “yes” to a project, you shut the door on many others.
The same rule applies to every task you perform when running your business.
Saying “yes” to non-revenue generating tasks will cut into your ROI fast.
Pause for a second, what services do you sell as a freelancer? Are you a marketer? How many hours do you dedicate to do marketing for your clients? What do you do with the rest of your time? What are some other tasks you perform every day?
Remember your time is limited, so you need to use it wisely. Say “no” to projects you know won’t be profitable or may get in the way of more important tasks.
Create your own rules of thumb about which tasks are worth your time or not.
Be selective with your time and the projects you work on. I know it’s hard to say “no,” especially when you are just starting, but as your business grows, you’ll be able to say “no” more often.
The faster you learn to say “no” to tasks that drag you down, the faster your ROI will skyrocket.
Stop charging by the hour
If you’re charging by the hour, you start with very limited inventory.
That’s because there’s an obvious limit to the number of your own hours you can sell—making it next to impossible to improve your ROI significantly if you’re charging by the hour.
Plus, when you charge by the hour, you’re actually punished (your ROI goes down) when you become more efficient.
Even if you do things faster, better, or more efficiently, your earnings will decrease because you’re billing fewer hours.
If you want to increase your profits, you need to get away from hourly billing and start charging by the project or by the value you give to your clients.
For starters, try setting a fixed price for each service you offer, and stick to it.
If you do that, then more efficiency will mean higher profits and better ROI.
It will also bring other benefits: you won’t have to negotiate on hourly rates anymore and you will also be able to “productize” your offers, meaning you can treat your service like a product.
Having a basic offer to sell to all your clients will cut a lot of costs, because you won’t have to create a custom proposal each time, price it out, and adapt your processes for every situation.
Measuring your ROI
To make progress on improving your freelancing ROI, you have to know your numbers. That is, you have to know exactly how much you make each month and how much you spend.
Start by listing all of your service costs and subtracting them from your revenue. This may sound very basic to some, but you may be surprised at how many people did this exercise and found hidden costs they were ignoring.
Once you have those numbers clear, it’s time to make decisions.
Eliminating non-revenue increasing costs is an immediate boost to your ROI as a freelancer. You can also choose to increase your prices by revamping your offer, adding more value, etc. Or you can also build processes that cut down your time, effort, and costs.
If you are just starting out as a freelancer or if you have freelanced for years, measuring ROI consistently should be a core part of your business. As ROI goes up, you’ll be better prepared to scale your business and build revenue you can rely on every month.