Step 1: Get your first three paying clients
It doesn’t matter if you already have a website, business plan, and LLC set up. If you don’t have customers, you don’t have a business. Time.
Clients pay you money. And money keeps businesses running. That’s why your first priority when starting out should be to get your first three paying clients.
I’m not pulling that number out of thin air. We tested this concept with thousands of students. Anyone can get one client. Maybe a friend, or a friend of a friend who is hiring. The second client might be your uncle Jim. Or an ex-college roommate who needs help with something – who knows. But once you get the third client, you know you’re on to something. You have the required service.
For these first three clients, if prices come up, don’t worry about it. Charge anything – even if it’s a lowball donation like 20 dollars.
The goal here is to get 3 paying clients. As long as it pays you something, you’re on the right track.
Here is a strategy called Find and Speak that will help you find it.
1. Find your clients
- Who is your real client? Something like “small business” is very vague. Get specific. “Local fitness studios looking for help with their email marketing” is even better.
- Where do they go to find solutions to their problems? What sites do they read?
- Where are the people who are already looking for solutions to problems? How can you differentiate between them and your work?
This could be something as simple as posting and responding to an ad on Craigslist. Someone needs help moving, and you show up to help them.
Sometimes it’s not so straightforward. This is where it helps to identify a specific target market and find out where they can go to look for solutions.
- For marketing or content writing help you can be Wellfound
- For tech companies, check out AngelList
- Or maybe you’re in an industry where referrals have a lot of power. How can you get your foot in the door?
The important thing is to do the work and research. If you’re a brand new freelancer, you can’t expect to set up a website and get people beating a path to your door.
Once you’ve done your homework, we can move on to the next step.
2. Contact your customers
Email will be your most important communication tool for sending clients. It’s cheap, fast, and straightforward. And once you have a good pitch that gets responses, you can use it over and over with a few changes.
All good emails have 5 parts:
- Introduction
- Give
- Benefit from the student
- A foot in the door
- Call to action
Here’s how they look in action:
Note that we did not do it on the field. We did not mention the price. We haven’t gone on and on about how much we love email marketing. We just made an offer, explained how it would help the other person, and then tested their interest with a call to action. And all it took was 5 lines.
A busy person can read this and simply answer, “Yes.”
Use this script to get your first three paying clients. And then if you know something, you can move on to the next part of this pricing system.
Step 2: Set the hourly value
Congratulations! If you’ve reached this step, you’re officially in business. Now is the time to set some guidelines for your price.
There are many different ways to do this. You can bill by the hour, by project, by commission, or by a monthly retainer.
Forget all these options for now and set an hourly rate. It keeps things simple. Buyers understand it, and they won’t panic because of big project quotes. And it reduces the risk for them, so you may get more business as a result.
To get a good start for your hourly rate, use the Drop-3-Zeros Method.
Basically, you find the average annual salary of someone in a job similar to your freelance service and subtract 3 zeros from it.
You can easily find salary information on PayScale or Glassdoor.
For example, I looked up “email marketing” and saw that the national average for that role is about $64,000.
So if we subtract 3 zeros we arrive at an hourly rate of $64. That’s a good start.
If your level feels higher than normal, that’s okay. Remember, clients don’t have to pay taxes and fees to freelancers, so expect to pay a little more per hour for their services.
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Step 3: Increase your rates by doing high-value work
Many freelancers will work for a few months with a client and then ask for a raise. Here’s how that conversation usually plays out:
Freelancer: I have worked with you for about 6 months now, and I think I deserve a raise.
Client: Why?
Freelancer: Ummm…well…I understand the company. So I am working very well now. I can get more work done in less time. And you don’t need to train anyone.
Client: But isn’t that what bringing in new people is all about? Do you spend time training them early so they can work independently later?
Freelancer: Ummmm…
Newsflash! You are not entitled to a raise. You get paid for the work you do. If you want to earn more, you should do higher value work.
That could mean managing staff or projects, being responsible for certain revenue goals, or putting yourself in a more visible role like a senior assistant to the CEO.
The definition of moving up the value chain will vary for freelancers depending on their industry. But generally, the closer you get to the sale, the higher the price will be, and the more you can charge.
For example, a content writer is responsible for writing a certain number of blog posts per week.
But the content strategist is responsible for the overall strategy of the website to bring in new leads and customers.
The latter is closer to money, because customers are involved.
You can get new high prices by using the Drop-3-Zeros method from step 2 and find roles with a new level of experience and commitment.
Now, that number could be much higher. For example, someone responsible for sales can easily quote $100 an hour.
Most clients will reject such a number. This is where you can use the trial period to your advantage.
Here’s a short script you can use to guide that conversation:
This does 3 things.
First, a foot in the door. The client is more likely to agree to a lower price if price was the main point of contention.
Second, the trial period reduces the client’s risk in hiring a freelancer. Another point in favor of renting.
Third, it sets the stage for a renegotiation in 3 months. You won’t have to raise your prices. You just need to say, “Our 3 month trial ends in two weeks. Would you like to continue working together at my regular rate of $100 an hour?”
And if you’ve knocked it out of the park, and delivered everything you promised, of course they’ll say yes.
After all, it’s hard to find good help these days. Good employees – independent or not – are important.
By using these 3 steps, any new freelancer can land their first paying client and increase their rates to run a profitable freelance business.
Just follow them in order, and any grudges you have about the price will be gone. Then, your only job is to focus on doing extraordinary work.
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