As I’m sure you’ll agree:
Freelancing can be one of the most financially-rewarding career options out there.
In fact, up to 56% of freelancers say they’re earning more as a freelancer than at their most-recent job.
However, if you’re looking to increase your income with a freelancing career, you’re likely curious about the amount of profit a freelancer can make.
And more importantly…
…what determines a freelancers’ profit?
In this segment of Freelancers’ Corner, we’ve once again brought together our incredible global freelance community to break down exactly what what profit freelancers make, as well as exactly how they make it.
Ready? Let’s dive in!
What profit do freelancers make and how?
This all depends on the value of freelancers in your industry. I’d recommend checking out the average day rate for a freelancer in your space.
It depends; If you’re good at what you do, you’ll be well-compensated for it.
It’s hard to say; everyone works at different rates and it totally depends on the kind of job you do.
Your profit will very much relate to your experience; a client will pay you dependent on how attractive they find your work. Freelancers also have overheads to factor into their profit margin, including equipment costs, platform commissions and fees etc.
What are the main factors that determine a freelancers’ profit?
Profit is often determined by your appetite for long-term thinking. You will not increase your profit by pricing yourself low. Although it looks like an easy way to increase your clientele, it is a temporary solution that will trap you in the world of low prices and low profit.
Here, Jelena emphasizes the importance of knowing your worth and thinking long-term as a freelancer.
She points out that deliberately underselling yourself might seem like an attractive option, but will only lower your worth rather than increasing your client base.
She goes on to explain that a solid portfolio and a sense of pride in your work is the key to increasing your profit:
Being more on the pricey side is tricky in the beginning, because it can seem like no one wants to hire you. However, in the end, you’ll attract clients that are willing to pay what you’re worth because they respect your work. This is the way to prosper as a freelancer as it’s a more long-term solution to growing your income.
Many freelancers often have spikes of work, followed by long periods of quietness. It can be difficult to make money from this if you’re starting out, as most of your profit will come from work.
Justin points out that regularity of work can massively affect a freelancers’ profit.
Huge spikes of work followed by extended quiet periods are super common amongst freelancers; particularly for those who are just starting out.
In order to ensure a steady stream of work, it’s well-worth making sure you’re able to negotiate well with clients to schedule projects out evenly, rather than having unmanageably busy periods followed by radio silence. This will allow you to take on more work when it’s available and manage the administrative side of your freelance career.
Justin also points out that negotiation skills are crucial in determining your rate as a freelancer:
If you want to get more money out of your work, you’ll need to ask for it. However, make sure that it’s well-matched to your experience level. For a beginner with no experience, I’d say that $25-50 per hour is a good amount, though this would depend on your work, and how much they’re willing to pay. If you have experience, feel free to charge more.
Lastly, Justin offers up a tip for ensuring a steady stream of profit as a freelancer:
Ideally, you would want to get ongoing work from people. Feel free to ask people if they need more work from you once you’ve finished working- this can help ease the quiet periods.
The profit depends largely on the freelancing platform itself. Different platforms will have different client volumes, service rates and commission charges.
Here, Florence stresses the importance of choosing the most-suitable platform to search for work and factoring in any necessary deductions (such as commission rates).
When choosing a freelancing platform to search for work, make sure it’s:
- Well-catered for your specific industry or sector
- Well-populated with relevant and rewarding work
- Fairly priced (both in terms of your average day rate as well as any commission the platform deducts from your earnings)
It depends not only on the budget of your client, but also the industry you work in; each case is different.
While agreeing that profit is largely determined by both a freelancers’ clientele and industry, Kyle goes on to explain that determination and persistence can also hugely affect profit:
To built stable income, you’ll need to obtain regular clients as well as a consistent stream of new ones. Some will turn out to be long-term clients, some will be short term. On top of that, it also takes luck, marketing and of course a big time investment. I wish I didn’t have to figure all of this information out on my own; that was certainly a slow-burn for me at the beginning!
Kyle also serves as proof that determination and persistence can truly grow your profit into a huge chunk of income, no matter which industry you’re based in:
I’ve managed to land somewhere in the $1k per month range as a freelancer. I’m a musician/composer, which I’d say is one of the most difficult industries to get through due to incredibly high competition.
And there you have it! A complete breakdown on what profit freelancers make as well as the factors that determine a freelancer’s profit. If you enjoyed this article, why not check out some of the other segments in our Freelancers’ Corner series?