Freelancer’s often aren’t paid what they’re worth. And the issue goes further than just the money that finds its way into your bank account monthly. Not getting paid what you’re worth perpetuates a lack of security and may result in fatigue, otherwise known as burnout.
Note that finding a one-size-fits-all strategy, in this article, for maximizing your own earning potential isn’t my goal — guiding you to that discovery is.
Today we’ll offer a valuable overview and toolkit that can substantially increase your odds of ensuring you're pricing yourself right and being compensated fairly. Feel free to adopt what resonates with you. With your own good judgment and thoughtful analysis, you'll be empowered to shape your own personal journey.
🎉 Embrace the power of Xolo to discover premium clients and steer your freelance journey towards lasting success.
How to maximize your freelance earning potential
Outlined below are some of the most important principles for maximizing your earning potential as a freelancer. The advantages may vary for each person and specialization, so don’t hesitate to delve deeper into the topic if you feel that anything here doesn't quite align with your expectations.
I’d strongly encourage every reader to independently explore the areas of networking and referrals, portfolio building, up-selling and cross-selling, and overcoming limiting beliefs (deeply intertwined with portfolio building). As everyone embarks on their own unique journey of self-development, only you will understand your own needs best, and shape your path toward success.
Why every freelancer should start with a self-evaluation
The first thing you need to do as a freelancer is an honest self-evaluation. Analyzing your experiences, projects, (entrepreneurial) behaviors, failures and successes will provide profound insights and advantages to your development and ability to increase your earning potential.
Once you've embarked on the journey of self-evaluation, the next step is translating those insights into actionable strategies. Utilize the strengths highlighted through your analysis to position yourself effectively in the competitive freelance landscape.
🧠 This process is not static — do this on a regular basis.
The difficulties in self-evaluations lay in removing personal bias, rationalizing lesser refined habits, and creating the structure of an effective self-evaluation system. If you can succeed at this, you will identify what sets you apart from your competitors and obtain a concrete understanding of your value.
Just to get you started, let’s run over a couple of the most prominent self-evaluation points so you have a nice bit of ground to jump off from:
Evaluating your projects both past and present
It can be difficult to give yourself credit for the impact you’ve made on past projects and write them off as inconsequential. Don’t let imposter syndrome influence your decisions. Any project – paid, educational, personal – can be used to evaluate your skills.
Skills are skills, and they can be applied irrespective of how you acquired them. Glossing over valuable soft-skills because you think they don’t make the cut is selling yourself short. You might be taking for granted what someone else will pay top-dollar for.
Recognizing your own behaviors as a freelancer
This is especially noteworthy for employees switching to freelancing. An initial lack of structure in freelancing can negatively affect someone not prepared to handle it. Structure will come, but you’re the one who needs to put it into place. When we talk about behaviors critical to your success, ideally we refer to:
Self-starting. Being able to get going on anything that needs your involvement (Even when you don’t want to – something difficult for those with ADHD, but still possible). I personally like to use The 5 Second Rule – a simple and easy-to-implement self-starting technique written by Mel Robbins.
Self-management and planning. Sufficiently managing yourself so you efficiently plan out your days, weeks and months to tackle projects, marketing, networking and ensure you get proper rest in between it all. You don’t have to be perfect, but this is the ideal opportunity to implement the much needed structure often missing in the lives of freelancers.
Entrepreneurial behavior. This comprises tenacity, curiosity, risk taking, persistence (just to name a few). How do you stack up to the traits characterized under this term? If you don’t resonate at all, start trying to implement some of these traits into your daily actions, and you might just surprise yourself with how it impacts your personal and professional life.
Failures and successes. Failure is easy to overlook, because it hurts; success is easy to overlook, because it’s expected. Devote reflection time to each, and analyze and learn from both. Success breeds confidence that’s easy to parlay into your next goal; rewarding success bolsters and provides long-lasting effects that drive you to continue achieving (dopamine).
But don’t just take my word for it, check out this article on why it’s important to reward success.
Discovering your unique value proposition as a freelancer
If you have worked in business or freelancing before, you’ll know that your success relies heavily on your ability to pitch yourself and your ideas. It’s the storytelling aspect, and your opportunity, to capture not just the mind of a potential client, but their heart as well.
A solid self-evaluation can help you identify your crucial selling points, needed to pitch your value proposition: facts and figures for the mind; experiences and emotions for the heart. Put time and effort into understanding this concept and identifying these elements within yourself and your work. It’s the difference between leaving money on the table or putting it in your pocket.
The mind is work. The heart is passion. Learn to inspire!
Learning how to educate clients as a freelancer
Specialized freelancers are hired to complete jobs for all sorts of reasons. If you’re being hired because the client is in need of your niche skill (and not just time constrained), client education will be part of your value proposition. It’s your opportunity to shine while explaining the scope and effort involved to successfully complete the gig. Being knowledgeable and well-versed within your niche determines, justifies and supports the rates you are asking for.
It’s important to clarify that if time and employee-power are a finite resource as the reason freelancers are hired, the client is likely to be very knowledgeable. This will impact how you deliver your value proposition (your pitch). Coming across as cocky or arrogant to a knowledgeable client will almost always not work out and is a hard place to come back from. It’s a small throwback to the importance of self-evaluation and understanding your competency level well.
Conducting market research as a freelancer
I frequently became nervous around this during business studies, because I fundamentally didn’t understand it. Conducting market research felt so expansive and overwhelming, seemingly requiring experts to help you accomplish the magnificent task…
Thankfully, this isn’t the case. To create a successful market research analysis, you first need to define the objective: what are the questions you are trying to answer? Define the scope and it quickly becomes very manageable with a clear goal. After that, it’s no differently executed than any other type of research (thank you Google).
Developing your own freelance pricing strategy
It’s how you decide what to charge your clients for what you do. For you, the case may or may not be that you’re nervous when it comes to asking for what you think is fair for the work that you do, and that’s ok — especially if you’re new to the space.
You should be using a variety of factors, including the ones listed in the article, to figure out how to set your prices. To go more in depth and best learn how to do it, I recommend reading this detailed up-to-date article dedicated to calculating freelance rates.
Mastering negotiation and communication skills to increase your freelancer earnings
If you’ve skimmed through much of this article, I’d implore you to slow down as we reach this point. Ask any CEO or big-time player in business or otherwise, and they are likely to say that communication is the single most important skill to have. Warren Buffet says his most prized certificate (and the only one he keeps on display) is the one he earned from the Dale Carnegie public speaking course, and credits his success to it to this day.
Negotiation is a facet of communication: discussing, debating and ultimately influencing people to accept your ideas for your benefit. The most successful form of negotiation, though, seeks to find a mutually beneficial outcome for all parties involved without giving in on your own principles and needs.
🧠 I recommend reading the book Getting to YES: Negotiating Agreement Without Giving In. A book used by the Harvard Law School program on negotiation.
In my opinion, negotiation tends to have a negative ring to it, especially in business and law. Pop culture likes to show a very frictional experience (a good story needs conflict), with two parties failing to come to terms, always polar opposites to each other with little hope to land on an agreement.
It doesn’t need to be like this at all. Reading the right books and taking the right courses will give you a better understanding of people’s motivations and how to direct negotiations in a very positive and beneficial way.
A client that feels happy, heard, and perhaps educated at the end of negotiations will be far more likely to pay exactly what you are asking for.
Utilizing ethical negotiation tactics as a freelancer
Ethical negotiation is deeply rooted in the practice of engaging in discussions based on honesty, integrity, and profound respect for all parties involved — regardless of any potential difference in opinion or worldview. Embracing ethical principles during negotiations not only fosters the establishment of trust but also serves as a cornerstone for nurturing enduring connections and achieving equity.
Like I said, you can’t skip this. Negotiation and communication are critical to everything you do. Learn to communicate and negotiate effectively to quickly add to your success. Every freelancer hoping to maximize their earning potential should take note of these widely recognized principles of ethical negotiation:
- Honesty and transparency
- Integrity
- Respect
- Fairness
- Equity (keep things in balance, no-one is more important than the other)
- Empathy
- Inclusivity
- Confidentiality
- Long-term relationships (don’t burn bridges)
- Mutual consent
In conclusion
Your takeaways here should be to understand yourself as best you can — personally and professionally. It’s exponentially more difficult to get paid what you’re worth if you don’t have a firm grasp of your own skills and limitations. There’s no better investment you can make than in yourself, investing in yourself is the fastest way to 10x your personal and professional growth, and I recommend that you start with enhancing communication skills.
Regardless of where you believe the level of your communication ability to be now, it will only benefit you to continue improving, learning and cementing its practices within your proverbial toolbag.
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About Alexander
Alexander is a former US Army logistics management coordinator and attended the Estonian Entrepreneurship University of Applied Sciences from 2019 to 2022, studying entrepreneurial behavior, creativity, and business innovation. Since 2015, he has worked for Estonian finance technology and banking companies in customer support and data governance roles. His previous writing experience includes contributing articles within the cryptocurrency space, academia, and personal creative ventures. In his free time, Alexander enjoys connecting with friends and family, slayin' noobs in Destiny, and reading (if he sits down long enough).