If you’re a freelancer or an independent contractor, you may have struggled over the thought of having to raise your rates. The cost of living has just gone up, there’s a baby on the way, your furnace decided to break in the middle of winter. We’ve all been there. Sometimes things happen that are beyond our control, and we need to give ourselves a raise. One of the benefits of being an independent consultant is the ability to write your own paycheck. Yet we all struggle when it comes down to having to raise our rates. We worry about whether our rates will still be competitive or if we’ll lose clients. Sometimes, worry gets the best of us and we suck it up, take on an extra project and pull an all-nighter for the extra cash, or give up a weekend getaway with the family to get it done. These are sacrifices we sometimes make, but there are some other strategies that can greatly increase your billable time, without you spending an extra minute on work.
As independent consultants, we typically bill by the hour. This really limits the amount of money we can make, unless we raise our rates, because there are only twenty-four hours in a day. If you’re a quick worker, billing by the project might be an excellent plan for you. You can simply include an hourly rate multiplied by the estimated number of hours it would take the typical consultant in your field to complete the work in your proposal – so, to the client, it’s perfectly fair and reasonable. If you get the project completed in less than your estimated hours, then you’ve essentially just given yourself a raise.
Another area in which most independents struggle is the time required to keep up with your business. Unfortunately, we don’t spend all our time doing exactly that one thing that makes us tick. If you’re running your own show, you’ve got bills to pay, clients to bill, possibly clients to collect from, marketing to do, contracts to prepare, taxes to deal with, and loads of other paperwork to keep. It’s been estimated that freelancers spend approximately half of their working time keeping up with these administrative details that most of us loathe – and unfortunately, all that time is not billable to anyone.
A concept that is catching on is outsourcing all those back-office tasks to another company. It really makes sense, especially to consultants who are in the business of having tasks outsourced to them by other companies – why wouldn’t they, too, simply outsource those things they’re not good at to someone else? Companies exist for the sole purpose of serving as the back-office and W-2 employer of record for independent consultants. One such back-office company is MBO Partners, which offers expense reporting, 401k, tax management, access to health insurance benefits, and even networking opportunities for professional consultants. Any freelancer taking advantage of such an opportunity avoids all the hassles of running their own business, and can simply spend all their time finding clients and doing what they love to do.
You really can have all the advantages of working for a company while still maintaining your freedom and deciding how you want to run your own business. Now, with the hot trend towards outsourcing back-office operations, you can give yourself a much-needed raise by having more time for billable work hours.
