Missouri Small Business and Technology Development Centers Blog

In our last post, we discussed how to set rates for freelance work, specifically if you are planning to charge by the hour.

But what if you want to charge by the project? Here are some things to consider if you’re not sure which is best for you.

Charging by the hour may be a good way to go with steady clients who bring you a regular and predictable work flow. It can be an easy way to predict revenue and time needed to complete each project. But, if you are particularly efficient with your work, and it takes less time for you to complete each project, you may be better off charging a set fee for each one.

A per project price is good for things you can produce quickly. But it’s not the best way to go with a new client or a new project. It often takes time to establish a way to work with each new customer, and until you have a sense of how efficiently you can satisfy each client’s demands, you should protect yourself with an hourly rate. “Project creep” can rear its head, causing you to add more hours of work to a project without being able to recoup the cost.

Experienced freelancers have learned to clearly define the scope of their services ahead of time to avoid misunderstandings. For instance, if you are a freelance writer given an assignment for an in-depth article, consider how much research you are willing to do, how long it will take to produce a first draft and how long it will take to incorporate the client’s edits and changes. Consider how many edits and revisions you are willing to do up front. Make it clear to your client that if the piece involves more revisions than originally itemized in the scope of work that you will add an additional charge for that service.

Clear expectations upfront can help you avoid awkward negotiations later. By putting some parameters around the project, the client can agree to a clear scope of work at a fixed price.

Freelancing offers innumerable benefits, not the least of which is flexibility in your work schedule, the excitement and challenge of new projects and the opportunity to do a variety of work. However you decide to charge for your services, don’t underestimate your value. Just because you may not keep “regular” hours doesn’t mean they are not valuable hours!

It’s a question that our SBTDC counselors hear a lot.

How much should I charge for my freelance services?

The growth in self-employment (nearly 21 percent over the past 10 years) is the result of many phenomena. Many highly qualified professionals have either been down-sized or have opted to take early retirement. Skilled college graduates in some industries are having difficulty finding jobs. And many families are seeking additional income to support their living expenses and other activities.

The result? Freelancing is growing as an alternative. But what to charge to remain competitive but still make the work worth the time? If you get it right, you’ll be busier than you can imagine. If you get it wrong, you’ll compromise the value of your service and be disappointed with your cash flow.

Here are some factors to consider:

• What is the going market rate for the service you want to provide?
• What experience do you have?
• Do you have a solid track record of meeting deadlines?
• What do you need to charge to sustain the freelance business?

One common equation for establishing freelance rates is the following: (more…)

Rhonda Abrams’ final three factors propelling entrepreneurship complete the picture of the economic, societal and financial drivers behind the growth in business start-ups. As a reminder, the first four in her list were:

1. Less job stability
2. Lifestyle driving career choices
3. Technology infrastructure
4. Technology opportunities

Which brings us now to a new and growing awareness of the importance of new business and small business for economic possibility on a local, regional, state, national and international level. More countries are embracing entrepreneurship as a viable economic strategy, opening the global stage to more players in all time zones and in all industries. They are lessening regulation and red tape, providing tax benefits and supporting technical assistance. The common goal is to break down the barriers to enterprise start-up and growth. (more…)

Another great session at the annual conference of Small Business Development Centers featured small business guru Rhonda Abrams. Her sessions are always insightful, timely and PACKED!

One of Rhonda’s recent columns discusses seven factors that are propelling the start of small businesses. As usual, Rhonda takes what most of us know intuitively and puts it in an easy-to-understand explanation for the increasing interest in entrepreneurship.

Here are the first two phenomena from Rhonda’s list:

The first reason Rhonda cites is less job stability. Our parents’ generation and even many of their children signed up to work for one company or organization for decades. Whether it was an auto plant, an insurance company, a university or a government agency, many workers expected to spend their entire career in one place. Not so anymore. Many formerly large organizations are running on a minimum number of employees. Some have closed their doors forever. Now, the trend is to hire part-time workers or contract duties out to freelancers and small businesses. And the young people entering the workforce now are very comfortable with the idea of having multiple careers in their lifetime to reflect their changing interests and a rapidly changing marketplace. All of this creates less stability but also more opportunity for small business. (more…)

What makes a successful entrepreneur? There are many opinions on that, but here’s a list of characteristics that can’t be taught, no matter how many courses you take:

Patience: Although it seems counter-intuitive, entrepreneurs must learn to be patient. Sales, recognition and customer loyalty all take time. After the initial opening of a business, there is typically a lot of traffic, because customers are naturally drawn to something new. Then things tend to level off, and the change in business can be disconcerting to many owners and managers. Having the patience to let your company find its place in the market requires patience.

Social personality: You will rarely — if ever — find an entrepreneur who is an introvert. Successful business owners know how to create conversation and create buzz about their business. With the advent of social media, getting the word out is easier for the shy business owner, but if you are not comfortable walking into a room full of strangers and confidently entering the discussions, entrepreneurship may not be for you. If you can’t promote yourself, who will? (more…)

The Edward Lowe Foundation, one of the premier entrepreneurship support organizations in the U.S., has done a lot of research into the characteristics and needs of what it calls the “second-stage company,” those firms that are past the start-up stage but not yet fully mature.

The big news about these companies is they are the job creators. In fact, over the past several years, while corporations have downsized and actually lost jobs, these existing companies, usually typified by sales in the $1-$25 million range with fewer than 100 employees, are adding jobs in large numbers, sustaining our economy and communities.

These firms have high potential for steady, dramatic growth. Their owners have the intent to grow. Because of their unique challenges, they seek assistance that is as fast-paced as their growth. They seek information in a just-in-time format that will help them solve complex, often concurrent, problems. They are not attracted to traditional modes of learning because they simply do not have the time.

The Missouri Small Business & Technology Development Centers are crafting a special set of services to address the most pressing needs of second-stage companies. We’d love to hear from you regarding what you need to help your business succeed. Feel free to email your ideas to paulsellm@missouri.edu.

If you are a business owner, and your accountant tells you that for every dollar you’ve put into your company, you’ve made $7, you would probably think that was a fair return on your investment.

I thought it appropriate on this Independence Day weekend to pause and consider the rate of return on one of the best investments in U.S. history — the Servicemen’s Readjustment Act of 1944, or as we have come to know it, the GI Bill. Economists have determined that for every 1944 dollar invested in the education, home ownership and business creation of returning World War II veterans, our country received approximately $7 in return through enhanced economic productivity, consumer spending and tax revenues. Not bad.

The idea for the GI Bill came from the American Legion, the World War II era’s most powerful veterans’ organization. Its goal: compensate the servicemen of World War II for their lost time and lost opportunities. The legislation offered the nearly 16 million returning servicemen an array of government-subsidized loans, unemployment benefits, educational support and technical training. It put in motion the most far-reaching transformation of a culture and a country in recorded history. And it altered the expectations of not only the members of the Greatest Generation, but those of their children and grandchildren. Senator Bob Dole, himself a recipient of the GI Bill, calls it, “The biggest piece of legislation the country ever passed.” (more…)

Like most of you, I’m buried in information from a variety of sources — magazines, journals, newsletters, Twitter, Facebook, emails and various nuggets of information that others copy for me and leave on my desk. I try to take a few minutes each day to at least skim all of that information and put the best ones in a folder for more careful reading later. It’s time to share.

Here’s a recap of some of the best quick reads on entrepreneurship:

Many entrepreneurs call themselves “unemployable.” That, they say, is why they work for themselves instead of someone else. And most acknowledge they have “control issues,” adding they simply “want more.” This is basically what research has shown over the years, but it’s interesting to see it self-reported by the entrepreneurs themselves.

Most entrepreneurs wish they had jumped in sooner. I think this must be something akin to people waiting to have a family. We hear them say, “We’re waiting until we can afford it,” and the response from the older, wiser, sage parents is, “Don’t wait. You never will.” Seems many entrepreneurs feel the same way. Now in business, they view the two or three years they waited for the time to be “just right” as time lost to their dreams. So, don’t wait until you know everything. You never will.
(more…)

How many times have you complained about a product or service, and then dismissed your unhappiness with a shrug and a comment: “If they had asked me about this, I could have told them”but, well, they didn’t ask me.”

Well, they’re starting to.

Consumer-driven innovation – or simply asking us what we as customers want – has gained more traction in recent years. Seems rather obvious, doesn’t it? But for many decades, consumer goods and services were designed around what company executives and business owners thought we wanted.

Now, not only are they asking us more about what we want, in many cases they are asking us to design products ourselves, often taking the old-fashioned focus group into the new technological age using online communities and social networking. (more…)

When I stopped for gas the other day, I visited with a self-employed home remodeler who watched as the digital numbers on his pump ticked by. It took more than $68 to fill his truck.

As he replaced the nozzle, he told me, “This is killing me. I don’t want to pass the cost on to my customers, but soon I won’t have any other choice if I want to stay in business.” Even by trying to consolidate and plan his trips more efficiently, he’s still spending more than $700 a month on fuel. That’s a huge share of his bottom line.

For the first time since he’s been in business, he’s turning down jobs outside Boone County, because the fuel costs cut too deeply into his profits. (more…)