Suddenly Self-Employed? Seven Ways to Boost Your Income

Fresh on the heels of Independence Day, a fellow freelancer confided in me that he wasn't sure this self-employed thing was all it's cracked up to be. One, a demanding client had been giving him grief. Two, work he'd come to count on from a steady client seemed to be drying up. And three, he couldn't remember the last time he'd gotten a raise, taken a Saturday off or shaved and showered before 6 p.m.

Sound familiar? For green and seasoned freelancers alike, all can be common problems. And while I can't help with your grooming issues, I do have some suggestions for optimizing your workload, increasing your income and boosting your morale.

Follow the Money

Writers, designers and programmers with an artist complex are sure to bristle at this suggestion. But craft is only half the freelance equation. If you care about eating, you have to run a smart business too. And the only way to do that is to balance those sexy-yet-low-paid gigs you do for love and glory with some snoozy but lucrative projects.

Don't Let Any One Client Dominate Your Time

This is simple math, really. If 60 percent of your work comes from one cash-cow client and that client buys the farm, you've just lost 60 percent of your revenue. Sure, you'll have weeks where most of your time is spent serving one client. But as a rule, I recommend not giving up more than 20 to 25 percent of your annual schedule to any one client.

Track Your Project Time

Getting paid $1,000 to write a white paper or $5,000 to design a website might sound terrific. But if that white paper takes you 40 hours to write or that site 200 hours to finish, you're grossly undercharging. (To the uninitiated, $25 an hour might sound like a lot, but by the time you factor in taxes, overhead, health insurance and the like, it's actually a freelance pittance.)

Using a free online tool like myHours, Slim Timer or Toggl to track the time you spend on each project can help you determine which projects aren't just worth the returns.

Stop Reducing Your Rates

Here's the problem with lowering your rates by 10 or 20 percent to attract new business during a recession or dropping your fee to accommodate a struggling client: once the financial storm passes, you're still left making 10 or 20 percent less than you used to. And if you already were hoping to boost your rates by 10 percent this year (because what freelancer couldn't use a cost-of-living or profit margin increase?) you now have that much further to go.

In the history of freelancing, no client has ever said, "You know what? You've been doing such a great job for us and we're feeling more flush this year. Why don't we restore your rate to what it used to be and give you a 10 percent pay hike?" Instead of waiting for clients to give you a raise, demand one yourself, even if it means replacing your lower-paying clients with less stingy ones. Remember, if everyone can afford you, you're not charging enough.

Institute Project Minimums