How to Avoid Getting Screwed When You're a New Freelancer
If you're just diving into the world of freelancing, welcome aboard. It's an exciting time to be a new freelancer, with loads of opportunity out there as companies continue to downsize and outsource many types of services.
The bad news is it's also never been easier to get ripped off.
The Internet is just bursting with scams that ensnare freelancers of all stripes. Too often, new freelancers look up after grinding out a long work week, do the math, and realize they're earning well below the legal minimum wage.
How can you avoid being exploited and start earning real money? Here is a quick tour of the most common ways new freelancers end up getting stiffed:
When you're new, it's easy to get excited when a new prospect calls or reaches out on email. Before you know it you're saying, "Yes, yes, pick me!"
Then you put down the phone and realize you have no clear idea what you just agreed to.
If you think questions show you're green, they don't -- pros ask tons of them. So don't hang up that phone until you've clearly defined the project, deadline, materials required, and pay.
Don't Do Free Samples
This request is the bane of Craigslist ads. If you have even one sample you've already done, even if it's on your own blog, resist the lure of offers like "We have lots of work for you -- please submit three samples on these topics and then we'll let you know if you're hired."
If you don't have a single sample yet, create a few that you can show. Ideally, get a local business to let you do a little work for them pro bono, so that it's a sample from a real client.
But don't submit work to client specifications free or on "spec" in hopes of getting more work.
The vast majority of these offers are flat-out scams. Your article, photo, or design likely will be used without pay or permission, and you will never hear from this "client" again.
Get Full Contact Info
Yes, it’s a casual society we live in today, and it’s nice to be on a first-name basis, but you’re going to want more info than that if you’re doing client work.
These days, a lot of work gets assigned via email. But be wary of anybody who wants to hire you who's signing their email "Joe" with no email, street address, company website address, or phone number.
Yes, it's a casual society we live in today, and it's nice to be on a first-name basis, but you're going to want more info than that if you're doing client work.
How are you going to pursue payment against this mystery man when the check doesn't show up? Make sure you get full contact information -- and do a little research to confirm that it's a real company -- before you sign.
I work with hundreds of new freelance writers, and when they start researching and learning about the rates professionals charge, they are uniformly shocked. If you've started out trolling Craigslist ads or working for platforms such as Fiverr or Elance instead of actively prospecting for your own clients, you may have a skewed view of what constitutes appropriate freelance rates.
I think of these types of clients as part of the freelance underworld. If you've been hanging around here, you may have a tendency to wildly underbid and leave a lot of money on the table.
For instance, one new freelancer recently reported to me she had taken a deep breath and bid $2,900 on a website-content writing project, a price that to her seemed ridiculously high.
She also said she was told by the client that an agency had bid $25,000 and been rejected -- which likely means she could have bid quite a bit more as a solo freelancer and been accepted.
As you can see from that sad example, it's worth taking a little time to investigate going rates for types of work you're doing. Check the Writer's Market, Photographer's Market, Freelance Confidential, or other reference guides. Ask around on writer chat forums, too.
Most importantly, get over any complex you may have that as a new freelancer, you're not entitled to good rates. You still have some skills and your time has value -- and you need to earn enough to pay your bills. Ask for fair wages, and keep raising your rates.
Require an Advance
If I had to identify the number-one cause of freelancer ripoffs, it's right here: You start work before you see any money.
When a prospect is willing to pay your advance, that’s a strong signal that you have a good client and won’t have any trouble getting your final payment.
In the world of business clients, advances are routine -- so ask for one. Fifty percent is pretty standard. If it's a foreign-country client, get more, possibly even the whole fee up front.
When a prospect is willing to pay your advance, that's a strong signal that you have a good client and won't have any trouble getting your final payment. When they send an advance, they're committed to getting the project done. If they balk at it, it's a red flag and you may want to pass.
The exception here is when you're working for publications. You won't get an advance from this type of market. But any other sort of business, nonprofit, or government-agency client ought to pay an advance.
Have a Written Contract
It's easy to just jump up and do a happy dance when someone emails you wanting your freelance services. But think ahead to when it's time to send an invoice.
Without a written contract, that client has no legal obligation to pay you. Ever.
If you don't create a paper trail, you couldn't even sue to get your money. You don't have a legal leg to stand on.
Aside from this scary prospect, there are a lot of details to hammer out in a typical freelance contract. For instance, if you're a writer, do you get a byline? Do you have reprint rights after a set length of time? Do you retain ownership of the work, or is the client buying all rights? What happens if there's a dispute?
The contract is where all these niggling fine points get clarified. If all you can get is a short email that summarizes the terms, have them reply with "I agree" and you will be able to document the basics of your agreement and the date it was made.
I know major corporations that do their contracts this way now, and an email paper trail should be fine. But if you're the worrying type, have an attorney review your contract. Freelancers' organizations are a good resource for sample contracts and referrals to an attorney.
Set Payment Terms
Yes, this is a contract point. But I'm calling it out in a heading of its own because this is another top spot for getting hosed, right here.
Say you get hired to redesign a complex website for a client. You get paid 50 percent up front. When does the rest get paid?
You need to specify two key things to get paid:
- the payment trigger, such as "on delivery of first 10 webpages"
- the payment terms -- how long they have to pay you after that the trigger happens
The final payment is particularly tricky to define, and many new freelancers end up screwed out of that last check as a result.
It's a common problem that clients get your final draft and then sort of disappear. They stop returning your phone calls. They may just be busy -- or they may be trying to dodge their final payment.
That's why you need to create a trigger on your final payment with terms such as, "payable upon finalization or within 30 days of turn-in of final draft, whichever is sooner."
This way, they can't drag out finalization forever, and you know the end point by which you should be paid.
Don't Jump the Gun
This is another over-excitement problem. Say you hear from a blogging client who says they'll send a contract shortly, "But could you just get started on a few of their posts? It's a big rush project, don't you know!"
So you dash off and start researching post topics and writing drafts. Then you hear nothing from the client, and eventually discover the project has fallen through.
Now, you've wasted hours of time on a prospect that didn't turn out to hire you.
This problem is fairly easy to prevent: Don't start working until your signed contract and deposit check arrive. It's not really a client until they sign and they pay, so keep marketing and looking for clients until that moment.
My motto is, "Your deposit gets me started." Make it yours.
Think Before You Drive
Often, local business prospects will ask you to drive over and take an in-person meeting with them. Unless they're very nearby, try to avoid this.
In-person meetings consume a lot of time. You can easily blow a half-day sitting in traffic or taking public transit. A pretty big gig ought to be on the line, or you could use the phone or Skype to chat.
Don't Give Free Consulting
While you're at that meeting or talking on the phone, watch the clock. Some prospects will gab on for hours, asking you lots of questions about how they should do their marketing.
You might be flattered at first…until that long meeting ends and you realize you still don’t have an assignment to do anything.
You might be flattered at first...until that long meeting ends and you realize you still don't have an assignment to do anything. Then they ask you to come in for another meeting.
Many prospects will try to milk you for free consulting this way. They'll keep calling you up for as long as you're willing to volunteer your ideas. Eventually, they often go off into the sunset, still unsure quite what they want to do -- and you've blown several precious billable hours on a flake.
My rule is that 30 minutes at most is a conversation we're having about my freelance project. Beyond there, and it's free consulting.
As the conversation nears 15-20 minutes, if they're still shooting the breeze, it's time to take control. Clear your throat and say, "So just to sum up our conversation, what exactly are you proposing I do for you here? Sounds like you need six short videos for your website...is that correct?"
Steer the conversation out of random-discussion territory and back on target.
If they can't get to the point and no project is in the offing, stand up, let them know the half-hour you'd scheduled for this meeting is up, you have another engagement, and you've got to go.
You'd be thrilled to schedule some additional time to talk marketing strategy with them -- at $100 an hour. That news usually motivates them to get to the point straightaway.
What do you think is the worst pitfall for new freelancers? Leave a comment and tell us about it.
You should always seek independent financial advice and thoroughly read terms and conditions relating to any insurance, tax, legal, or financial issue, service, or product. This article is intended as a guide only.