The 5 Traps to Avoid – Increasing Trend for People Going Freelance

How to have a sustainable business model

With the economy showing little in the way of recovery, every day there seems to be more and more people looking towards self-employment, in particular in the freelance or contracting markets.

This is having a strange impact on the supply and demand in the profession. People are often despirate for work, so set low rates – custonmers like the thought of saving so hire at the lowest cost… but what is the real cost?

When contracting or freelancing, it is not about generating an income – its about running a business. This means creating reserves for when there is no work. Driving day rate lower and lower does no-one any favours in the longer run. Customers want a reliable supplier (if you charge too little you wont be there in 12 months time), customers get used to low rates and poor quality (or hidden costs) and this damages the sustainability of the industry. Worse, some sites claiming to support the freelance and contracting market accept adverts for roles that are clearly un-sustainable – driving the profession into the ground.

Rates should be based on value and business aspirations not just cost. This works well for all parties in the medium to long term.

In the past we have written a number of articles on freelancing and setting sustainable rates and business approaches – links are included below.

If you are considering setting up on your own make sure that you dont fall into one of these 5 traps:

1. Starting a price war – you will lose
2. Undervaluing what it is you can do for your clients
3. Selling on price rather than value
4. Believing that the client really cannot afford to may that little bit more – just look aroud the carpark! (or on notice boards announcing their latest contract win)
5. Giving discounts – you will never raise the price for that client again – always add value – not reduce costs

http://rapidbi.com/management/going-freelance-in-training-or-hr-how-much-to-charge/

http://rapidbi.com/management/going-freelance-in-training-hr-or-as-a-coach/

http://rapidbi.com/management/tips-going-freelance-training-consultancy/

http://rapidbi.com/management/going-freelance-independent-trainer/

http://rapidbi.com/management/going-freelance-in-difficult-times-consulting-and-training/

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RapidBI is an organizational effectiveness consultancy based in the UK but working internationally.
© RapidBI & Mike Morrison 2011 - this article/ page is free to copy and use on the condition that an active link back and reference is made to this site and page. Thank you for your understanding and co-operation.

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Related posts that may be of interest to you:

1. Tips for those thinking about going freelance in training or consultancy
2. Going Freelance in difficult times – consulting and training
3. Going Freelance – So you want to go independent?
4. Going freelance in training or HR – how much to charge
5. Going freelance in training, HR or as a coach
6. Attracting clients in a freelance market space – lessons from MLM

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