Freelancers: Just Say No to Fixed-Price Projects

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In honor of the recently-departed Nancy Reagan, I’d like to spotlight the one phrase that the former First Lady and Alzheimer’s activist is perhaps best known for:

“Just say no.”

Reagan was talking about recreational drugs, but I’d like to employ this phrase for an entirely different subject: fixed-price projects for freelancers.

You should just say no to fixed-price projects. Here’s why:

The Problem with Fixed-Price

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If you’re just starting out as a freelancer, you’re probably eager to find work. Whether you’re a writer, a programmer, a graphic designer, or a voice-over artist, the fact that your work can perform remotely means that there is a lot of competition when it comes to securing work with potential clients.

As such, when you’re first starting out, if you get a job you’ll probably be too excited by the fact that someone hired you over all their other options to worry too much about how exactly you’ll be compensated.

But you need to respect yourself and your work and demand a fair payment method, or you will be taken advantage of.

Fixed-price is not fair. As a freelance writer myself, allow me to recount a time in my early career that I was burned by a fixed-price arrangement:

It seemed like a good deal.  An auto parts supply company had 10 product descriptions they needed to be written up, and they offered me $30 per 300 – 500 word description. Not a bad price at all… so I completed the descriptions and sent them over, expecting the $300 I was owed to reach my PayPal account, and then my bank account, in a few days.

But that’s not how it happened. The client wanted me to make some edits before they’d release the funds. That’s not quite out of the ordinary – sometimes it takes some push and pull before a client and I come to a complete understanding of the style and tone they’re looking for.

So I edited the descriptions as the client requested, and send the work back over. But the client still wasn’t satisfied. They wanted more edits, and the changes they wanted were getting more and more abstract and difficult to implement.

Now we’re getting to the point where I’m losing a lot of value of my assignment. At first, I was set to make $300 for about 10 hours of work. After two sets of edits, it turned out to be more like 20 hours of work.

Taking a major pay cut in this way would have been bad enough. But then, when I finally sent over the product descriptions with the second round of edits worked in, I didn’t get a response. I waited a day and sent a follow-up message – still no response.

Over the next couple weeks, I sent several more requests for payment. As you might expect at this point in the story, all these requests were ignored. For 20 hours of work, I was paid exactly $0.

Hopefully, learning about my blunder will help you prevent mistakes of your own in the future.

You now know that fixed-price projects are a no-go. But what can you do about it?

Use a Third Party to Guarantee Hourly Pay

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If you’re just making a casual agreement with a client, then you still run the risk of them stiffing you on the check, whether it’s fixed-rate or hourly or any other method of compensation you’ve agreed upon.

That’s why it’s necessary to have a more substantial agreement in place. You could hire a lawyer to help you out here and draft a contract that’s actually legally binding… but hiring a lawyer would be quite expensive, taking a big bite out of your freelancer earnings.

Instead of making casual agreements that can be easily broken or investing in a lawyer to write up a contract for you, you can join an online freelancer marketplace that guarantees hourly pay. This is both more secure and more affordable than those other two options.

There are many different online freelancer marketplaces you can use to find work – personally, I prefer Upwork. That because, unlike sites such as Freelancer and others, you don’t have to pay any fees just to apply to jobs.

The best aspect of Upwork is that if you choose hourly work (fixed-price projects are also available – avoid those), your payment is guaranteed, and it’s guaranteed to be paid on time, once a week, every week.

Here’s how it works: to set up an hourly contract, a client has to provide Upwork with their payment information. Once the contract is agreed upon, the freelancer is able to record their own hours. No need to ask the client for a payment, since their payment information is already with Upwork – all you have to do is log your hours as you go, and on Sunday evening, all your hours for the week are automatically tallied up. The money you earned by Sunday is released after a 10-day waiting period.

Using Upwork as a third party is an excellent system because you know exactly when you’re getting paid instead of waiting on clients to release funds. Also, when a client asks you to edit work, you can actually log those hours and get paid for editing, rather than essentially working for free (which is, of course, the case for fixed-price project edits).

You should know that there are some drawbacks to using Upwork, though. Namely, they charge a fee of 10% of your earnings to use their service.

But that 10% cut is worth not getting ripped off. It’s time to stop accepting fixed-rate work and start working hourly.

CEO and Founder @ Coding Ninjas

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