This post is part two in a series. If you’re learning how to earn six figures, start here.
If you’re not overly attached to your current job and would be willing to switch it for something better, this route is for you.
Some of the things that prevent us from pursuing new and better jobs really don’t matter as much as you think.
I don’t have the skills to do anything else.
That’s kind of irrelevant. You can learn anything with enough time. You might not be naturally gifted, but a gift simply doesn’t compare to dedication.
Just because you don’t have the skills now doesn’t mean you won’t have them in six months or a year. You don’t have them because you’re not trying to have them yet.
I’m not qualified.
You could pick what you want to do, and then get qualified, but that can be expensive. Going back to school may not fit with your schedule or your lifestyle, either.
Instead, I’d suggest you focus on entering a field where you are often judged on your skills rather than your qualifications.
Many types of freelancing fit this bill, while also commanding high hourly rates. I’ll explore this point further in point #3.
From here on, this article will mainly outline the possibility of becoming a six figure freelancer. If this idea doesn’t appeal to you (please read the article first, maybe I can change your mind) I’ll present another route to earning six figures in my third and final post in the series.
I don’t know what to aim for.
At Freelance Switch, we conducted a survey of 3,000 freelancers to find out what their average hourly rates were. Here are the results:
Keep in mind that this is an average, meaning 50% of freelancers are charging more than that. Does that mean 50% of freelancers are earning six figures?
Probably not, as they’re unable to fill 40 hours a week with billable work. Still, if you can optimize your work-week to minimize non-billable work (such as invoicing and liaising with clients), and maximize billable hours, six figures through freelancing is probably your most viable option.
I suggest this field because it balances a high rate of pay with an emphasis on what you can do rather than what you’re qualified to do.
Most freelance jobs will look to your portfolio rather than your academic history when determining whether you’re the right person for the job.
Your suitability for a freelance career rests on skills that you can teach yourself relatively cheaply (in comparison to taking a high-end course or getting a degree).
Why is this the case? Most clients don’t have a deep understanding of the industry they’re looking to hire in, so they wouldn’t actually know what kinds of qualifications are out there.
You’ll find the story is different when jobs are posted by other freelancers or a firm: they’re a bit more likely to ask for qualifications, so keep this in mind.
But–here’s why you shouldn’t charge by the hour
Freelancers have to pay for more stuff than everyone else. With greater expenses, you need to earn more to compensate.
However, you may have a hard time telling a client that they’re paying you $75 an hour to design a logo, or $100 an hour for your copywriting work.
Understand that I talk about hourly rates because these are an average–not the number you put on your website.
If you work 40 hours a week and earn $2,000 a week, you’re on track for a six figure income (gross). That does not mean you should tell clients that your rate is $50 an hour.
Let’s say you charge $300 for a logo design that takes you three hours to create. You’re making $100 an hour, but if you don’t tell your client, they’ll never know.
They’re not a logo designer themselves, so they’re unlikely to have any idea how long the process takes. $300 for a good logo sounds pretty reasonable. Paying someone $100 an hour probably doesn’t!
Another example: you charge a client $1999 for a web design that takes twenty hours. Once again, you’re earning $100 an hour.
In an industry where web designs can cost up to $6000, your client will feel like they’re getting a bargain. How many hours you work is irrelevant.
They’re paying for your work, not your time, and you should be rewarded for being efficient. If you finish a job early, you earn more per hour.
To summarize: being paid by the hour will limit you. You will earn more per hour if you charge for finished projects alone.
I would suggest this is probably the only way you can earn six figures net rather than gross–unless you’re a consultant, of course!
If you enjoy writing, here are some options with good average hourly earnings:
Freelance writing for print or online.
Note that the rate per article for this type of work varies very steeply. Successful freelance writers will tell you that a 500 word piece is worth no less than $50.
Online content is also a booming industry, with many website owners and bloggers outsourcing content creation. You can expect to command higher rates when you’re writing about something you’re knowledgeable about.
From producing the text for webpages to writing sales letters, pamphlets and emails, copywriters help people sell things through words.
You can teach yourself this skill by buying some copywriting books and reading examples of good copy. Practice (and proofreading) makes perfect.
If you’re artistic, here are some options with good average hourly earnings:
Freelance graphic design.
This can include logo design, magazine design, and so on. You’ll want to develop decent skills with Adobe Photoshop at the very least, though having the ability to create designs by hand will also benefit you.
Design can be quite theoretical, so you’ll need to read up on your chosen field voraciously.
Freelance web design.
Did you know that you can design websites without knowing one line of code?
Photoshop source files can be converted into working code quite cheaply and quickly. If you know what looks good but don’t want to immerse yourself in code, this could be an option for you.
Once again, Photoshop is an essential skill, as is an understanding of web design principles, typography and usability. Books and online resources can help here.
If you have good equipment and a bit of skill, why not make money from your passion?
If you can wield a pen, pencil or paint-brush with expertise, there’s a market for your services. Digital scanners and fast international postage means you can also work for clients anywhere in the world.
If you’re a problem solver, here are some options with high hourly rates:
Whether you’re coding websites, applications or software, freelance coders commanded the highest rates according to our survey. This is another skill you can teach yourself with the help of books and tutorials.
Search-engine optimization is a booming industry and every business wants a piece of it. Competition is fierce, so how can you differentiate?
Learning how to be a freelancer
Once you have the skills, you need to learn how to turn them into a business. As editor of Freelance Switch, I’ve read many resources hoping to teach you how to start your freelancing career with a bang, but nothing compares to the book ‘How to be a Rockstar Freelancer‘, which is truly the most comprehensive resource available (and cheap, too).
Another thing that makes this career-path the perfect choice is that it’s not an all or nothing venture. You can work anywhere from 1 to 100 hours a week (though the latter is strongly discouraged!).
Test the waters by adding 5 or 10 hours of freelancing a week on top of your day job, then phase out the latter once you’ve established a firm grounding for your six figure freelancing career.
Learning how to be a six figure freelancer
As stated earlier in the series, just because a freelancer is earning between $50 and $100 an hour for their services does not guarantee they are earning six figures a year.
A freelancer could be charging those rates but only completing a few jobs a week, the rest of the time taken up with finding work, client liaison, invoicing and so on.
I’ve noticed that the key differentiator between high-earning freelancers and the average freelancer is the ability to minimize non-billable activities and maximize billable work.
The foundational activities they practice are:
1. Creating a situation where clients chase them, not the other way round.
Receiving job offers in your inbox on auto-pilot is a really nice situation to be in. By placing a ‘Hire Me‘ page on my blogs, I’ve been able to achieve this.
Other freelancers achieve the same effect by building a wide network of clients and working mainly on referrals. Other freelancers do it by concentrating on clients who provide a stream of regular work.
Others do it by building a strong personal brand and name recognition through an online presence. I’m sure when many of you think logo designer, you think David Airey, for example.
2. By batching.
Six figure freelancers batch tasks like invoicing and other mandatory business process.
3. By outsourcing.
Six figure freelancers rarely do it without help. A freelancer is required to wear many hats and it’s impossible to be talented and efficient at all of them.
For that reason, savvy freelancers are increasingly outsourcing the things that used to bog them down.
4. By making client liaison efficient.
Let’s say you offer one service to most of your clients. You’ll often find yourself having to explain the details of that service to new clients.
The savvy freelancer makes use of templates and will try to answer possible questions before they’re asked.
Emails aren’t time consuming to write — it’s the space in-between emails that can make them inefficient. If you can learn to keep back-and-forth emails to a minimum, you’ll save plenty of time.
5. By incrementally raising their rates proportionate to their increasing experience.
If you’re earning $75 an hour you can obviously afford to do less billable hours and still hit six figures a year. Most freelancers who raise their rates slowly and steadily over time are surprised at the positive results.
6. Charging for completed projects rather than by the hour.
I’ve already talked about this, but it’s worth restating here.
Freelancers who differentiate earn more. Here’s why: if there are a thousand other freelancers offering the same service as you, with similar skills and similar portfolios, then as far as the client is concerned, the only real difference is price, and freelancers are forced to compete on that basis.
If your client isn’t aware of your competition (or it doesn’t exist), they can’t make price-comparisons. If nobody creates web designs quite like you do, a client is less likely to be sucked in by a lower price elsewhere, because they know they’re not getting the same product in return.
Many freelancers differentiate by specializing, i.e.
- SEO Copywriting targeting young people
- Pet photography
- Usability consulting
- Freelance writing on specialist topics
- Coding in an obscure language
On the last point, a friend of mine knows a guy who earns over 200k by working three months a year. He crams plenty of overtime into those three months, but he’s able to earn so much in such a short time because he works in a very obscure and difficult programming language.
There’s very little competition for him, so he can charge almost whatever he likes. He spends the other nine months of the year traveling and vagabonding. Not a bad way to live!
If you can’t differentiate based on skills, differentiate by specializing, or by creating a recognizable personal brand.
If your personal brand is strong enough, you can specialize simply by being you. People want your specific approach because it’s yours. Other people can’t compete at being you.
Part three, the final part in the series, will be coming soon. In it, I’ll discuss how you can earn six figures by supplementing your current work, or by replacing it with a non-freelance alternative.