How to Plan Your Freelancing Design Income
on December 2, 2012
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One of the most difficult problems that you will face as a freelance designer is knowing how much money you need to earn each month as a designer.
If you don’t get a handle on your income early on, you may find that you can’t continue as a freelancer. We certainly don’t want that to happen.
In this post, we’ll examine some of the factors that you must take into consideration when planning your monthly earnings. If you enjoyed this post, you may also like 20 Pricing Principles for Freelancers.
The Amount You Must Earn
If you are going to stay afloat as a freelance designer, you absolutely must earn enough money each month to cover your basic expenses. Both your personal living expenses and business expenses must be covered.
To determine the bottom line for how much you need to earn, list out these expenses. Here’s a partial list of monthly expenses to consider:
- Rent or mortgage
- Car or Transportation
- Internet connection
- Webhosting fee
- Business phone
- Fees for use of stock images
Of course, your own personal and business expense lists will probably include even more expenses that you need to cover. Take your time compiling this list so that you don’t forget anything.
Once you have added all of your costs up, you will have an idea of the absolute minimum amount of money you need to earn in a month. But, if you earn just this minimum amount you will just barely be scraping by.
The Amount You Want to Earn
No one really wants to just scrape by in the long-term, so you’ll need to set an income goal that’s somewhat higher than the minimum amount above. A higher income goal will allow you to earn a profit each month.
How much additional income should you try to earn?
When setting a goal for an additional target income amount, consider your long-range goals. Here are some questions to ask yourself:
- Do I have a savings account?
- Do I plan to get additional education for a family member or myself?
- Am I saving for a trip or vacation?
- Will I be making any major purchases in the next year or two?
Once you have considered your long-range goals you should have an idea of how much you would ideally like to earn each month. You can now set your freelance design rates accordingly.
Common Freelancer Mistakes
Ideally, your monthly income from web design work will always fall between how much you need to earn and how much you want to earn. However, there are some common freelancer mistakes that can keep you from meeting your goal. Here are a few:
- Planning to get 40 hours of paid work every week. Most new freelance web designers are lucky to get 10 hours of paying work in a week. Even experienced web designers sometimes don’t get 40 hours of paying work in a week.
- Not setting aside any savings. Most freelancing design work goes in cycles. You’ll need a savings account to help you meet your expenses during the slow periods when you don’t meet your minimum income goal.
- Not using a contract. Drawing up a contract may seem like extra work, but having one can help you collect what is owed to you if there is a problem later on. Get legal help if you need it.
- Not allowing for project scope creep. Most design projects actually take more time than freelancers realize. So plan for scope creep. Include a little extra time in your estimates.
Other Factors That Can Throw You Off
Make sure that your work is worth what you charge (i.e. deliver high quality work). The quality of your work will help to set you apart from other freelance designers. Never deliver substandard design work.
Don’t undercharge clients if your expenses happen to be very low at the current time. Too many freelancers get trapped by starting out with low rates and then have trouble raising them later on.
Also, the amount of work that you get is directly related to the amount of time you spend promoting your business. Don’t forget to market your design services even when you are busy.
How do you manage your monthly freelance design income? What tips would you add?