When many people think about freelancing, they imagine business owners hiring cheap labor across the world. The assumption is that they are competing with third world countries based on price. Who can do it cheaper? That’s why they avoid freelancing like the plague.
While this price sensitive market exists, it’s only one part… and it’s NOT the part you want to work in!
If you are competing on price you are destined to fail.
I have a friend named Gary that loves music. He is phenomenal at singing and playing the guitar. One of Gary’s friends opened a new music store in the Dallas area. “I’m going to shut down Guitar Center!” he said with confidence. “How do you plan to do that?” Gary asked. “Lower prices!” was his friend’s master plan.
Here’s the problem with that…
When your prices are lower, you profit less. When you profit less, you can’t have a good store or location. You can’t provide the selection or service that others do. You can’t advertise and get people to your store.
Your only hope at selling for less than is getting your products at cheaper prices than anyone else. There is zero chance Gary’s friend is going to get better prices on equipment than Guitar Center.
So that means he has got to cut every other cost to survive. The only way he could stay open is by paying himself less than anyone in the industry. Not a smart plan. I’m sure he went out of business when he realized he could make more by working as an associate at Guitar Center. I guess if you can’t beat them, join them.
If you think people only care about the price of the products they buy, you are 100% wrong. If that was true then restaurants wouldn’t exist. People could only go to the grocery store. Why would they pay more somewhere else? Fine dining restaurants, like the Brazilian steakhouse I love to take my wife to, wouldn’t stand a chance.
If price was all that mattered, you wouldn’t have many choices in life. Everyone would live in tiny apartments and drive the cheapest used cars they could find. No one would buy anything other than the bare minimum required to keep them alive and functional.
But that’s definitely not the case. Even people on welfare somehow find a way to get an iPhone.
Successful business owners know the price of quality better than anyone. And they are willing to pay for it!
Think about it this way…
As a business owner, which freelancer would you hire to run your online advertising?
Freelancer A: Has run ads for a few different companies that are very different from yours. He doesn’t want to show you any of his current clients results. His English isn’t great and doesn’t understand much of what you are saying to him. He only charges $5 per hour.
Freelancer B: He currently runs ads for a couple of businesses just like yours. He helped one of them go from $10,000 per month to $200,000 per month in under a year. He charges $5,000 per month.
Any business owner in their right mind would go with Freelancer B. The cost is irrelevant. What matters is what you will get for that cost, which is called a return on investment. With Freelancer B, you may pay $5,000 per month but make $50,000 or more. You make back 10x what you spend!
Freelancer A would likely flush a lot of your money down the toilet. He will send your ads to the wrong kind of people with a bad message. You will spend a ton of your own time telling him how to do his job. Even though he costs almost nothing, he will likely cause you to lose $5,000 per month or more! With zero return!
That’s why quality matters!
Any business owner who has decent success has learned this fact of life. They learn to invest their money into something that is going to give them returns. They will not simply try to save a buck in hiring someone who could help them make more money.
I can spot a penny pinching business owner from a mile away. I will never work with them. Working for these people is the fastest way to get burned out and hate your life. Avoid them at all costs.
When you continue to work in one area you will become very good at getting results for your clients. And when you are good at what you do, it’s very easy to avoid penny pinching business owners. At that point, the sky is the limit for your pay as a freelancer.