If you are self-employed your business model is likely to be fairly straight forward. Your clients hire you, they agree to a contract and the rate you charge for your services, you invoice for the work you have completed and your client pays. So far so simple. But how do you increase your freelance business value?
How to Increase Your Freelance Business Value
There are rules around who needs to register for self-assessment and who needs to register as a limited company. Plus outside of the regulations there are advantages to both business models. Find out more in our comprehensive Guide to Self-Employment versus Limited Company. The value of your business lies in more than just your expertise. Your freelance business value also depends on your market position, the size and dependability of your client base and your specialisation. This can be difficult to evaluate when you are starting out, so you will need to do some market research and make an evaluation of your position. It can be tempting to pitch for every possible source of income, however this does not necessarily increase your business value and on the contrary, this could have the effect of diluting the power of your brand.
How to Set Your Rates
When you start out as a freelancer it can be tricky to set your rates. You want to value your skills and services, but also be competitive. Working for yourself can be very rewarding in and of itself, but your need to ensure that your costs and expenses are built into how much you charge your clients and you consider how much time you will spend needing to perform admin, invoicing and marketing yourself, for example. Calculate what your breakeven point is for providing your goods or services, taking into consideration all associated costs. Then you will need to charge a reasonable profit on top. Think about where you can add value. Perhaps you provide a specialist service that can’t be found elsewhere, or that you serve a particular market within your industry. Some freelance businesses choose to offer a range of quality standards, or you can choose to serve only the higher paying end of the market. In this case you will have to demonstrate why your prices are worth it. This could be years of expertise or a wealth of positive testimonials.
Pitching for Business
In an ideal world you will have repeat business who recommend your services to others, meaning that you can concentrate on your expertise more than you have to market yourself. Even if this is the case, you still need to support your client experience with a professional website and responsive customer services. You need to stand out from your competition. In order to increase your freelance business value you need to avoid being the most affordable. Even if it is tempting to offer low prices in order to attract clients, this actually has the effect of causing clients to think that you do not offer the best quality goods or services. Low prices can also leave you short in the event of unexpected costs. Even if you have an established freelance business and steady client base, how do you raise your prices without your clients objecting? This is never easy, but it is necessary if you want to keep up with market trends and increase your freelance business value.
Use Business Development to Increase Your Freelance Business Value
One option is to replace your existing clients with higher paying clients by raising your prices for new business. However this demonstrates uneven valuing of your freelance business and decreases the value of repeat business and long term contracts. Instead you need to decide where you can increase value and commit to a set of new prices. To achieve this you need to create a powerful message and back this up with professional content to demonstrate that you are an authority and that your goods or services are worth higher-leverage pricing. This is essential to avoid staying stuck charging the same rates year upon year.
Use Powerful Messaging
Imagine sustaining a sports injury. You’re in pain, and you want help to fix it quickly. You look up physiotherapists local to your area. You quickly compare “Ealing Physio” with “Sports Injury Fixers Physio”. Your attention will be drawn to the business that directly claims to fix your problem. This is because their positioning claims that their expertise is focused on your specific issue. This also helps new clients to find you using search engine technology.
The way in which this applies to increase your business value is in how you position yourself to offer direct solutions to what your clients are looking for. You possess a set of skills that help solve problems for their business. Combine this with responsive customer services and a positive client experience and you will unlock the value of your freelance business.
Become An Authority By Creating Content
Prove that you are an authority by providing good quality content that backs up your expertise. Using our physiotherapy example, compare their websites, if one website provides much more complimentary information, like how to videos with stretches and exercises for specific physical rehabilitation, that is clear and easy to digest, this one demonstrates trustworthiness and is more likely to win your business. Apply to your own freelance business by writing up real life examples. When you complete a freelance project, write an article about it. Unpack the example, what problem are you solving? What is the resolution and how did you deliver that resolution? Here potential clients can read about how you create the result they are looking for, with a real life example. This boosts your position as an authority and allows you to command higher fees and feel like you’ve earned the right to do this.
Use Smart Pricing Strategy
Now, you’re choosing between two specialist sports injury physiotherapists. However this time, both have plenty of helpful, professional content. The difference now is their pricing strategy. The first physiotherapist is quoting £120 per hour. You don’t know how frequent sessions will need to be nor how long your therapy will take to rehabilitate the injury. There’s a lot of uncertainty and no guarantee that treatment will work, and you don’t know how much you will pay in total. This is difficult to account for, even if treatment is a necessity.
Compare this with the second specialist physiotherapist charges a £1000 flat fee. £500 upfront, and £500 once your injury is healed. In this instance you know exactly how much you will pay, regardless of how many sessions this will take. Plus you know that you only have to pay the full price if your injury is healed. So even if it’s possible that the first specialist will heal your injury for less money, you simply don’t know. The second seems to be more confident in their ability to completely heal you and in the value that they offer, by setting a fixed sum in a ‘no win no fee’ type capacity. This is a smart pricing strategy to help increase your freelance business value. Apply this to your own business – you can charge more if you guarantee a specific result or if you cost out your services based on outcomes.
This strategy risks putting off potential clients who don’t want to pay a higher guaranteed fee. But it does increase your freelance business value by attracting higher paying clients. Ideally you want fewer clients paying higher prices, that to be inundated with lower paying customers. The secret is that client budgets are more flexible than they will let on. Good clients will expand their budgets for experts and authorities, especially when they feel understood and cared for.
Be Confident and Raise Your Prices
To summarise, you can increase your business value with powerful and direct messaging, reflecting your clients real life scenarios with articles and content that offer real world solutions. Use a smart pricing strategy to demonstrate that your higher fees are performance based. The bottom line is that you can’t earn more profit from your freelance business unless you raise your rates. So evaluate your business and where you can add value. Specialising in particular areas is an expert way to achieve this. If you develop your business carefully you may manage to increase capacity to support branching out into new markets. This should always be done with careful consideration and expert business development support.
Prestige Business Management Works for You
Prestige Business Management has the expertise to help you take control of your business and your destiny. Find out what we can do for you. Call us today on 0203 773 2927.
