#7 Internet Home Based Business: Freelance & Consulting Services
What is Freelance-Consulting Services?
Freelancers and/or Consultants provide specific services and skills( copy-writing, business development or bookkeeping for example) to individual businesses on a contracted hourly and/or per project basis.
Most Important Skills Needed
Trade-specific knowledge, sales (closing skills) marketing (prospecting, lead generation, website marketing/blogging) and customer service.
General Overview
Freelance and consulting businesses provide professional services such as copy-writing, marketing, business strategy, design, photography, illustration, and programming to clients. Clients who use these freelance services are usually billed at an hourly rate or by the project.
Freelancing and consulting is one of the most popular home-based businesses for some great reasons.
- It is relatively easy to start up a freelance or consulting business. As people usually already have the training and contacts necessary to become self-employed.
- Freelancers & Consultants are always in demand, especially when businesses need to cut back on employment costs.
- Consultant & Freelance work seldom needs to be created in an actual office environment, as usually the services can be completed anytime as long as they are delivered by the client’s deadline.
- The downside to freelancing & consulting, because it’s so common, is a lot of competition-not only locally, but also globally thanks to marketplaces like Elance.com and Guru.com.
To stand out from the crowd, you will likely need to employ unique marketing tactics, for example:
- Blogging is a great way to promote yourself and find clients.
- You will need to have a website in order to be found online.
- To promote your website/blog, you’ll need to learn the basics of search engine optimization, social media marketing, and social networking.
- Smart consultants & freelancers develop a lead generation process through building a mailing list (email-postal) or building RSS subscribers to their blog’s feed.
Getting Started With Freelance/Consulting Services
The most important skills needed to earn significant revenue from freelance and consulting services are:
- Trade-Specific Knowledge ( you will need to have specific trade knowledge as to the job duties you will perform, which might include industry specific knowledge )
- Sales Skills (you will need (or learn) basic sales skills in regards to prospecting, lead generation and closing techniques in order for you to acquire clients)
- Customer Service ( you will need to understand as well as perform basic customer service functions to maintain the customer relationships you are building with your new clients to hold and keep them as customers)
- A Website ( you will need to be able to build & edit your own website)
- Web Marketing ( specifically niche marketing like blogging, article marketing and some copy-writing)
How Do Freelance-Consultants Get Paid?
Choosing how you get paid is as important as determining the services you will be offering & selling. Below are the most popular current methods of compensation that freelancers and consultants use:
Pay Per Hour
Pay per hour is the simplest method for the new freelancer/consultant to manage, employ & communicate to their prospective client. In a nut shell the freelancer/consultant bids a job based upon an hourly rate of pay to complete the assigned work.
In this model the freelancer/consultant is paid a set rate per hour; for example $25 per hour to perform bookkeeping services. In this example if the freelancer/consultant provided ten hours of bookkeeping services for their client in a given week, then the freelancer/consultant would bill their client $250 for the ten hours worked.
Usually in the pay per hour model certain benchmarks or parameters are set up in the beginning of the project to protect both the freelance/consultant as well as the client. Most clients usually will limit the number of hours a freelancer/consultant can bill or work within a given time frame (a day or week).
Bottom Line: Pay per hour billing has the lowest risk of the compensation models for the freelancer/consultant due to the fact that the consultant/freelancer has negotiated up front the rate per hour and usually the minimum of hours worked per work period(week-month). Pay per hour does limit your earnings based upon the rate you charge and the hours worked.
Pay Per Project:
Is another popular method that consultants and freelancers use for bidding and acquiring projects and clients. Generally speaking pay per project means that the consultant or freelancer bids a set price to complete a defined project. In this example a consultant bid $1,500 to create a business plan for a new restaurant start-up. The restaurant agrees to pay the consultant $1,500 to complete a business plan for their new start-up. The consultant agrees to complete the project by a certain date, for the agreed upon $1,500 regardless of the time it takes to complete the project. In this example the consultant cannot bill the client for any more time even if the project takes longer than his projected time commitment.
Pay per project is a good model to acquire projects where the consultant and client have a clear understanding of the scope and agreed upon final outcome for the project. This compensation method also works well when the consultant has some experience in bidding and completing similar projects. Clients like this model since it removes any doubt as to the final cost of the project the are trying to complete.
Bottom Line: Pay per project only works for the consultant if they are good at bidding and have a track record of completing similar projects on time. A easy trap to fall into is when the scope of the project is expanded without any additional compensation from the client. This is called project creep. And can quickly eat up the consultant’s time and profits it not quickly handled. For new consultants a 25% time overrun clause should be used when bidding projects until experience has been gained in regards to project planning.
Retained Services
Retained Services is where the freelancer or consultant is paid a set fee to be available for a specific period of time; for example $500 a month, to be available to preform an agreed upon services. A retained services contract will clearly state and limit the number of hours that the consultant will have to provide free of charge before normal billing rates would start.
The advantages of a retained services agreement for the consultant is that they are paid a set free( $500 per month) for needed business services whether they are asked to provide any services in a given month or not. The advantage for the client is that they have a proven skilled service provider on call to given them a set number of hours of service in any given month when needed.
Bottom Line: Retained services can be a win-win for both parties. It also can lead to a full time position after both parties have had some time to get to know each other in a business environment. But it is not a good compensation model to acquire new clients, since no trust has been built yet in the relationship.
Pay Per Performance:
Pay per performance is where the freelancer or consultant is only paid a fee if they reach or help the business reach a certain specific benchmark or milestone. For example a sales consultant agreed to be paid a fee of $500 a sale for every sale made during any given month over 50 sales a month. So if in March 2013, 57 sales were made, then the sales consultant would be paid $3,500( 7 x $500). But if only 49 sales were made in March 2013 then the sales consultant would be paid O ( nothing).
Pay per performance is a method that can pay very large fees if benchmarks are met, but can quickly have the freelancer or consultant working for little of no money if the benchmarks are not met. This compensation model generally is only used by experienced consultants who have many years of experience within a specific industry and skill set.
Bottom Line:This method should only be used by experienced freelancers or consultants who have experience using it. Inexperienced freelancers and consultants should be wary of accepting this compensation method when starting out with a new client, since usually the client uses this method to try and get the new consultant to agree to benchmarks and milestones that he knows have a very small likelihood of every being met.
Pro’s of Freelance/Consulting Services
- A fast way to start a home based business.
- The Internet allows the freelancer/consultant to market themselves without physically having to be their. Greatly reducing the time, effort and cost of acquiring a new client.
- Providing freelancing/consulting services to a diverse group of clients can provide a greater income than a traditional employed position.
- Freedom to work from home and have a greater flexibility on your schedule, than an employed work environment would provide.
- A Freelance/Consulting service business allows you to hire other sub-contractors to provide specific freelance/consulting services, allowing you to grow your business past the work volume you individually can produce as well as giving you a passive income revenue stream.
Con’s of Freelance/Consulting Services
- Uncertainty of work
- Lack of a steady income stream
- Lack of company benefits like: pension, health insurance, sick leave, vacation
- The freelancer/consultant must regularly market their services to keep a steady income
- Delayed payment on projects(work) sometimes up to 60 days after the work has been completed
- Stress of managing their own schedule
Interested In Where You Can Learn More About Get Started With
A Freelance or Consulting Services Business Of Your Own?
Where can you learn more about starting a freelance or consulting business? Just click on the links below to view our resources for starting a freelance service business or consulting business from home:
Interested In Starting a Freelance Secretarial Service From Home?
Then Leve Duell’s Secretarial Business-In-A-Box is a good place to start. Leve provides the new freelancer with all the tools and start-up knowledge needed to quickly start providing secretarial services to businesses from your home office. Her course even provides you with sample marketing materials that you can quickly customize to jump start your new business.
TO LEARN MORE CLICK HERE.
Interested In Starting a Freelance Copy Writing Service For Online Businesses?
Writing copy for online businesses on the web is on of the fastest growing opportunities for freelancers!
If you have some skill in writing then David Drake”s Six Figure Freelancer is a resource you should check out. David has put together a step-by-step guide showing how he earns significant income as a freelance online copywriter.
David’s system will help anyone who is looking for a guaranteed step by step way to start a profitable freelance writing business on the Internet.
You can get started in as little as 5 minutes . The system is geared towards teaching you the skills required to build a 6 figure income.
TO LEARN MORE CLICK HERE
Interested In Starting Your Own Freelance Bookkeeping Service From Home?
Do you have bookkeeping experience and would like to start your own freelance bookkeeping service from home? Then Sylvia Jaumann’s manual: “Secrets to Starting & Running Your Own Bookkeeping Business” might be a good resource for you.
Sylvia covers everything you need to get up and running fast. From marketing your services to the business forms you will need manage your clients. TO LEARN MORE CLICK HERE
