In Career, Entrepreneurs, Salary

Freelancers should treat themselves like a business

Freelancing makes people think you sit around in your pajamas all day, watching TV and getting paid for it.

Everything about that sentence is true except the last part.

As a freelancer, if you don’t work, you don’t make any money. Period.

Therefore, freelancers should treat their work like a business, and by that, I mean the following:

  1. Don’t work for free
  2. Don’t underestimate your hours or your rate
  3. Don’t be shy about collecting money
  4. Don’t work without an agreed-upon contract
  5. Budget and track all your expenses


Once you work for free, it’s hard to get a client to start paying.

If you’re good at your job, charge for it.


In a typical year, assume you will work about 50% of the time, which is about 1000 hours.

How much do you need to charge per hour (@1000 hours), to live?

Better yet, if you were to go to a company, what would your salary be?

Double that salary, and divide by 2000 hours to get your estimated hourly rate.

E.g. You can get a job at $50,000 a year.

Doubled, it is $100,000 a year.

Divide $100,000 by 2000 hours to get your rate = $50/hour


If you take projects by a flat rate, and you think you can get it done in 10 hours, add a 50% contingency of 15 hours, then multiply it by your rate to give the client a quote.

Take a maximum of 10% off your price, no more than that.

You will most definitely go over time, and what you DON’T want, is to under quote the client and have to charge them more later. It’s more painful as a client to have to pay additional money later on, than to just pay the real amount up front.

For any kind of scope creep, such as them asking you to just do this “one little extra thing”, tell them it’ll be X amount of hours in addition to your current work load.


Don’t be shy. It’s your BUSINESS.

If someone came up to you and said:

Hey, I need just ONE orange to make this cake, can you give it to me for free, in addition to the 5 other apples I’m buying?

Would you give that 1 orange away for free? No. You’d charge them.

Those who are shy, will end up resenting the client and the project. How can you do your best work if you are grumbling inside?

Also, if your clients are being deadbeats and not paying on time, get tough with them.

Don’t continue to work for them if they stop paying you, saying they’ll pay you later.

Don’t let an invoice go uncollected.

If you are REALLY shy about asking for the money then maybe you shouldn’t be asking for it.

Hire someone who charges by the hour, and ask them to call on behalf of your company to request immediate payment, and to hound them until they pay.

Otherwise, take them to court. It’s your money.

Or get a job with a company where you don’t have to worry about all that stuff, if it’s really that stressful.


People will say very nice things on the phone, but when the contract slides your way and they’ve mistakenly changed the hourly rate to be even $1 less than what you both agreed to, then don’t sign it.

Promises don’t make money. Cheaters never prosper. Use whatever maxim you need to stay firm on this.

Return the contract, and ask them to change it until you’re satisfied.

If they refuse, then refuse the contract and don’t deal with them again.

I’d also suggest getting someone to read over those contracts that you sign to understand whether it’s fair or not, before you do so. Sometimes that tricky legalese can land you into legal hot water.

Keep it simple, and keep it clear. It shouldn’t be that hard.


Like any business, control your overhead.


(MMmmm… pie..)

It goes without saying that you can’t start going out with the client to eat every day and calling it a business expense.

Yes, you can lower your taxable income by filing it under the business, but at the end of the day, you will still be paying at least 80% of the cost.

So on a $30 dinner, you’re still out $24 a day, when you could just bring your own lunch for $3, and save $21 a day.

Just the same as my decision to take the bus (if possible) I could definitely buy a nice car and put it all under the company, but at the end of the day, it is STILL MY MONEY.

Even worse, is if you don’t make enough money to cover your new freelancing lifestyle.

You need to understand what your profit margin is at the end of the month, each quarter, and year.

This “profit margin”, is simply your income minus expenses, or otherwise known as your savings.

Every company needs to do a financial analysis on how they’re doing, and so do freelancers.

Therefore, you need a budget, you need to track your expenses and you need to do it diligently.

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Sherry of Save. Spend. Splurge.

Am my own Sugar Daddy. Am a millionaire at 36 after getting out of $60K of student debt in 18 months, a little over a decade earlier, using I have worked 50% of my career (taking 1-2 year breaks), and quadrupled my income within 2 years of graduating, going from $65K to $260K with an average lifetime savings rate of 50%. I have 11 side incomes that are on track in 2020 to make me $50K - $75K. I could retire today if I wanted, but love my work-life balance as a freelancing consultant in STEM (Science, Technology, Engineering, Math). I am all about balance - between time and money, and also enjoying my money. I also post daily on Instagram @saverspender.

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  1. neurosciency

    omg, yes. i was freelancing for the past few months and it was tough! having a backbone is absolutely essential.

    1. save. spend. splurge.

      If you don’t stand firm, they walk all over you.

  2. Jaime

    This is really important. So many freelancers don’t take their business seriously. Its astonishing.

    I think people that work for free undermine themselves and their industry. A lot of writers and artists tend to do this unfortunately. I often wonder if the arts would be taken more seriously if less people would be willing to work for free.

    I also think it shows that you have self-respect when you don’t work for free and take yourself seriously by treating your freelancing as a business.

  3. MIchelle

    I just decided this week that I will be embracing the Freelancer lifestyle in about a year. This post has been very helpful and has given me a lot to think about. Thanks!

    1. saverspender @ save. spend. splurge.

      Good luck. Just be sure to budget and watch your expenses at the start. Don’t spend your money if you don’t need to.


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