There’s an uncomfortable little truth to freelancing that I think some of us are just starting to accept. It’s a truth that’s so fundamental to business, that eventually, even employed people are going to have to start paying closer attention to it.
It’s pretty straightforward and might be a tad confusing at the same time, but basically, it’s this…
The way you’re compensated as a freelancer isn’t about “quality”, or talent, or how hard you work…it’s about the value you provide.
While that one sentence isn’t much to digest, the reality of value can be a lot to take in.
What Value Isn’t (and Is)
I think a lot of us think about value from the wrong end (the personal end), at least in terms of freelancing.
When I say “value” in the world of BlackFreelance, I mean it in terms of business value.
Value isn’t what you think of your own work. It’s not the respect you have for yourself, or what other people say about what you produce. It’s not even about how much effort you put into something, or what your work and art adds to the world. Those are things I don’t believe can or should be measured in money…a trait business value almost always has.
Value in the freelance world (and increasingly in the employed world) is all about how you can move sales, revenue, donations, and efficiency. You might be thinking that doesn’t apply to you because you’re a creative or you write on social issues, or work for a non-profit…but I promise you…if you’re being paid (sometimes even if you’re not) money is moving the decisions around you.
Really understanding that can be hard, and that’s probably the fault of employment.
Employers can really mess up your perceptions of business value because if we’re being honest, it’s a really inefficient, unpredictable model — sometimes they hire and keep you on because they anticipate needing more work soon, sometimes it’s because your resume makes their bid for a project look good, or because you’re “comfortable Black”, sometimes you get an extension because you don’t challenge their “work family”, and sometimes you’re just good at what you do, but across a career? It’s probably a mix of all those things plus some.
Years of that dynamic can have you forgetting or completely missing where you provide value, and as employment evolves, none of us can afford that.
Value and Confidence
As a freelancer, understanding value is everything.
It’s how you boost your income, how you get “word of mouth” to work for you and even a big part of how you build confidence.
In a lot of online business circles, you’ll hear people talk about confidence as if it’s something that mostly comes from actions (i.e. self-promotion and building a personal brand.) At a certain level that’s true, but for some of us, I also believe that kind of approach can be a minefield for anyone who isn’t processed as “normal”.
The world will respond differently than you expect and in turn, your confidence could easily end up on shaky ground through no fault of your own. I believe that for us, especially those of us who freelance, self-promotion and marketing without a strong understanding of the tangible business value you provide your clients can be self-defeating in the long run.
Thankfully though, once a small seed of really getting value is planted, it blooms quickly.
Those freelancers who consistently raise their rates and aren’t stuck fighting for low-dollar clients on bidding sites? They understand value and are willing to charge for what they provide. Their freelance lives are easier because they’ve simply decided to stop serving overly-demanding, bottom-of-the-barrel clients and moved on to develop their skills and business understanding to connect with great clients who appreciate what they do. (Remember, low rates attract low-quality clients.)
How to Determine Value
First off, don’t stress if you don’t feel like you understand value right this second. It takes time.
It’s something I’m going to be covering here on the blog for a few months (and digging deeper into on a practical level in the Academy), but for now, just remember that the easiest way is to follow the money.
As you’re moving forward in your freelance business and developing that Value Focus, I want you to keep paying attention to just two things…
- How much money is flowing in a niche
- How close you are to the actual point of sale, donation, or business spending
Figuring out just how much potential there is in your niche isn’t a complete mystery. A LOT of effort goes into tracking the size of different industries and sectors, and if you pay attention to some of the reports and info out there, you’ll know pretty quickly whether your niche has the potential to do things like earn you a full-time income, make you a 6-figure freelancer, or not.
For example…Black hair is estimated to be a trillion dollar industry. That doesn’t mean that jumping into that niche will make you an overnight millionaire or that it isn’t home to low-earning corners, but it’s a good sign that there’s earning opportunity for you out there somewhere. (The quickest way to get a read on the size of a market? Just look up the niche name…here are some ideas…and “market size”.)
The second point, being close to the actual sale, is important on a couple levels.
For freelancers, the easier it is for us to prove that our work directly increases business or saves money, the easier it is to charge more. (This is why you hear the 7-figure writers popping up more in the direct response corner of writing vs., journalism or traditional print media.)
If you practice answering the “how does this business make money?” question on a regular basis, you’ll have 90% of the work done in understanding this aspect of value.
I said it once already, but it never hurts to say it again. Understanding value is a process. It’s something you make a part of your life as a freelance business owner and that largely comes naturally from a habit of marketing and reading news in your niche. If you’ve got any questions on value or even freelancing in general, drop them in the comments! (…and don’t forget to sign up for the newsletter if you want to be notified of more posts on value.)