60-Seconds #156 : Freelancing Pitfalls

by Fred Showker

Fred Showker's 60 Second Window Sometime after a lively discussion on one of the design lists I received email from a listee asking me to share some experience about freelancing. In the discussion I had told about my days as a freelancer contrasted with managing this graphic arts production company where I often hired freelancers -- having clearly seen and experienced both sides of the fence.

A freelancer is essentially a one-person company. While you are enjoying the pleasures of being your own boss without the rigors of company life, you're also exposed to all the pitfalls the world of business is going to dish out. So, you have to be a good business manager and a good creative at the same time. Knowing in advance what negative situations to watch out for and how to avoid them is of major importance to your survival.

Following are a few of the major areas of concern:

1. Never Quote or Bid

When the client says "can you give me a quote on this project?" or, "how much is all this going to cost?" a flashing red light should light up in your head. Help all clients understand that your working agreements with them be in the form of estimates, not quotes.

Explain to them that an estimate is an approximation of final charges, not a bid nor a firm price. Explain in a nice way that since there's never been a creative project that didn't change change during progresses, both you and the client will avoid surprises by working from estimates.

The best way to handle the "estimating" process is to offer your best 'guess' and a spread:

Quoting  begins Mr. Client, I feel confident I can bring this in under $500, however, with unexpected changes, or add-ons, it could run as high as $750. So it might be wise to budget $750. Quoting  ends

You've let your client be hopeful, but you've also given them the worst-case scenario. Now when the project comes in under the $750 mark, the client is thrilled he saved money. He'll call again. (In this example, you were perfectly comfortable billing $350! Right?)

Bidding is worse than quoting. Bidding is a spitting contest where only one person wins. Everyone else gets spit on. So ask yourself if you're feeling lucky. My stock reply is:

Quoting  begins Sorry, our schedule doesn't permit us to be involved in bidding projects. Quoting  ends

Sometimes if I'm really hungry, or this looks like a swell 'foot in the door' opportunity, I'll say exactly the above, then add:

Quoting  begins Get your best price then call me. I'll let you know if I can beat it. Quoting  ends

I generally lose most of those projects. But I'm glad because the client is only price-pitting one freelancer against another. I don't like those games.

2. Never Speculate

Speculative work almost always turns into a nightmare where you're giving away the store. Never offer sample concepts, sketches or layouts in hopes of landing a client. Big-time, well-established ad agencies will do speculative work for the huge money accounts. They've got deep pockets and can absorb the losses if the client doesn't pan out -- you can't. If you speculate, and word gets around, the first thing you know you'll be the popular local idea man, but won't get any work. Worse yet, they might just take your "free" creative work to the sign painter or newspaper and avoid creative fees.

Contests? Unless you really want your art on the cover of the local charity auction flyer, don't even think about a contest. The client will open the field for artists to "submit" art, design or logos and then "one" will be selected. Again there's only one winner. What if it's not you? Besides, it's some people's clever way of obtaining a good 'reserve' of creative ideas so they're set for many years.

If it's charity, and you want the job badly, just give it to them. Make a big deal about it.

3. Don't extend credit

If you give credit, you may as well go into the banking business. Just say "no" to potential clients who want services now for big rewards later. It's been my experience that "later" they disappear. Even the guys who want cheap work now, promising big dollars later when they're huge and successful -- just say no.

Like my Uncle Johnny used to say:

Quoting  begins "if they can't afford to go, then don't go." Quoting  ends

If you really want the account, offer to refer them to a bank if they can't afford the cash. (Sometimes this shames them into agreeing to pay full fare! You win.)

Make your terms very clear, up front, before any work is done. Whether it's 30/30/40%, or 50/50% or what ever, engrave it in stone.

4. Fair trade, not trade-out

Sooner or later someone will say: "Let's trade it out..." or "Let me pay in product" or some such. The only time I even consider such offers is if I really want the service or product, and its value far surpasses the fees for my services. But it's dangerous ground, and unless everything is clearly spelled out, someone is bound to get hurt -- and we'd rather it not be you. Now if it's a new Porsche in exchange for a three fold brochure, well, we'll consider it.

The pitfall is later when you're finished the project, and are ready to send the bill, you'll have sellers remorse. Cash is what you want. If you do go through with a barter, negotiate a price you can live with, then make it a trade checks arrangement. Let them write you a check for your services, and you'll write them a check in the same amount for the bartered product. That way you have a paper trail.

5. No piggyback rides

You'll meet clients who want to get going on a project, say a brochure. Then tries to slip in a logo as a piggyback add-on. You do the work, he loves the brochure but decides to wait on the logo. You've designed twice and get paid once. It's a classic pitfall.

Clients need to understand those are two separate jobs, and will require payment for both. Even if they use one but not the other. (This happened to me several times, and in all the instances, the logo showed up on their ad materials, done by the vendor, much later.)

I call this "one presentation, one job." Make it understood that the meter is running any time you are tendering creative ideas. Beware of the unscrupulous individuals who pick your brains for hours, then are never heard from again.

One highly successful software company did that to me years ago. We had an afternoon of "friendly" conversation and brain storming which was not a job. I realized later when they launched that I had given them their entire launch pad, all produced in house, with the fellow taking all the credit for the "creative" work.

Another time, I spent hours and hours working on a corporate identity program -- dozens of concepts and layouts -- which were not purchased and implemented. I billed them a "minor" amount hoping later to pick up where we left off. Nearly ten years later I saw one of their 18-wheeler rigs trucking down the highway with my design painted 40-feet wide on the trailer. Ruined my entire day.

6. Sign it off

Always insist on a client's signature on the final proof. Always, no exceptions. I have client approval sheets that are attached to the proof. Help them understand that nothing happens until the job is signed off on. If the job stops, and there are changes, the changes are done and the client signs off on it again.

This sounds a lot like a pain in the wazabi but you would be surprised at how many clients don't remember this or that change, or will develop a different idea of what they're getting between the time they sign off and the time the final project is delivered. You must be able to cover your tracks and point out the day he signed off -- or show the actual proof with signature if the memory needs refreshing.

7. Create like a pro, bill like a pro

If there's ever a time to watch your six, it's at billing time. Your billing must be presented including everything you can to avoid any potential problems getting paid. Your invoice must always be unquestionably clear, professional and sent promptly. If it's a huge job over a period of time, bill in segments: "work performed to date."

If you are billing into a clients' accounts payable systems, they must be signed off on so they don't raise questions later. The last thing you need is your bill holed up in some accountant's drawer after the employee who ordered the work is gone.

Make sure your payment terms are clearly stated in plain view. This not only demonstrates your professionalism but presents the client's responsibility no uncertain terms.

For years and years I have had my invoices printed, and then let my accounting software fill them in. On the back side was printed the full set of accepted industry practices and standards. I used a gray PMS color so they wouldn't be too rude, but they were there just the same. They were also printed on the backs of my estimate sheets as well.

Remember: Time Flies

There are many, many other tips and tricks, but I think if you observe these you'll be okay in the business department. The best advice is to hire a professional -- an attorney, and/or an accountant, at least in the beginning to get you set up properly. Time and money spent here will pay for itself many times over at the bottom line.

Time goes by so quickly it's easy to let some of these disciplines get sidetracked. But you need to be diligent and take care of them immediately as the need arises. Don't rely on memory. Write things down. Don't let yourself get swept away in the creative process and neglect the aspect of freelancing that actually gets the bills paid -- the business side.

Log into the business department of the Design Bookshelf Business Bibliography where I've gathered the most important business books for designers and creatives. There's all the help you need!

GO Designers talk about Freelancing
GO Essential tips for Freelancers
GO IOU: What To Do When the Chips are Down
GO PART 1: How to frugally market your business
GO PART 2: How to boost your freelancing job opportunities

fred_c_125 Good day, everybody . . . and thanks for reading

Fred Showker

      Editor/Publisher : DTG Magazine
      +FredShowker on Google+ or most social medias @Showker
      Published online since 1988

EDITOR'S NOTE : This article was first published in 1997, and then updated in 2001 as 60-Second Window #156. This edition has been updated only slightly -- and moved over into the new CMS system.

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