Today’s post and topic is a bit of a “tough love” piece for all you freelancers and small business owners.

Recently I launched Women Who Freelance, a support group for women working in their profession on their own terms (and those who are still tethered to 9 to 5, but dream of embracing and pursuing their passions). I launched this community because I know there’s a need for support for women who may not think of themselves as full-on entrepreneurs, but are neither remote “employees” of any one company.

I have discussions from time to time with women who freelance or do remote work as independent contractors and I often hear the same thing, “I love it, I’d love to do more of it but …” And the but is followed by something that is holding them back. This something may be:

  • Uncertainty of where to being or how to get started.
  • An inability to determine how to find and cultivate new clients
  • A fear of letting go of their “day” job. OR
  • A worry of having to compete in a marketplace where many potential clients seem to opt – not for the most qualified or the best quality work, but rather for the lowest hanging fruit, the cheapest provider on the block, no matter what the ability or quality of work.

All of these concerns are valid, and all of them can present major hurdles to a dedicated freelance professional or consultant.

Today I’d like to focus on the last of these concerns (competition in a tough virtual marketplace) and relate it to a few key points: investment, value, appreciation and self-worth (both for the freelancer and for the business owner).

If you are a small business owner, this post may speak to both sides of your business – one as the “hiring” individual and the other as the potential “hiree” seeking work and assignments.


To succeed in the business world, whether in real life or online, you must be willing to invest in yourself, your brand and your business (including any support staff you might hire). As a freelance provider, this may mean on-going training, it may mean hiring a virtual assistant, it may mean saving toward paying someone to improve your website. As an online business owner, this may mean investing in quality support staff, paying the fees to maintain a strong brand online (LeadPages, a dedicated CRM system, a sound email marketing platform, etc), or enrolling in an online business course designed to take your brand to the next level.

Let me take a moment to state the obvious. These things all cost money.  Often times, they will cost more than you expect or have budgeted for.  By the way, did you know that you should be spending approximately 30% to 40% of your annual revenue on sales and marketing? For reference, that means that if you bring in $100,000 in revenue this year, you should have spent 30k to 40k on your sales and marketing budget (ad dollars and staff support).  Don’t laugh! I know that sounds exorbitant. But that’s the hallmark of true business growth, investing in the future of your brand. I’ve worked with more than a few business owners who put sales and marketing (true sales and marketing) on the back burner – and wound up closing their doors, for good.  Business tip of the day: 

Don’t spend all of your time and money on your product or service, otherwise you may find you’re selling to an empty room…

My assumption is that you are in it for the long haul and you want to succeed. If that’s the case, I’m 100% positive that you need to invest more in your marketing. 100%.


The best leaders know, intuitively, that value has real meaning in their world. And they know that value does not equate with cheap. A certain global corporation notwithstanding, value means getting quality products and services at a fair market price (cheap labor and low ball pricing are not value, they are simply desperation tactics). My philosophy in running my own brand is that I hold myself accountable to real world standards. If I owned a brick and mortar store and I couldn’t afford to pay someone minimum wage, then guess what? I would have to do that work myself. Right? Unless I’m a non-profit, there’s no such thing as dirt cheap labor in real world business. The same should hold true online. Every business owner that strives to provide value to his/her customers must also “value” the work and workers behind what they are doing. If you’re offering below market prices, and in turn, paying below market salary rates, that’s not good business. You’re establishing a precedent that you can not sustain, and you’ll be creating a work culture that may not inspire loyalty among those you hire and depend upon.

To put this in perspective, and give you a frame of reference of what you should be paying the average “freelancer” – let’s look at converting a marketplace salary of $80,000 per year.  I’m working with $80,000 per year because it turns out that is about the average salary around the country for many of the typical online freelance jobs that you might hire someone for – web designer, graphic designer, systems analyst, social media manager, and even virtual assistant (if we equate that position with the normal administrative assistant role, where the assistant is experienced and not fresh out of college).

So how does an $80,000 a year office job convert into a remote or virtual work salary?

Keep in mind that in an office job, that salary comes along with a certain level of benefits, which calculate ON TOP of that salary.  So for our $80k a year job, we’ll guesstimate that Worker John would receive an additional $30k in annual benefits.  So his true compensation in a year would be $110k.  This matters because in an office, Worker John receives medical/dental benefits, some form of a retirement plan, paid sick and vacation days and holiday pay (and most likely, some form of a bonus).

Taking that $110k a year compensation and breaking it down into an hourly wage, and we find that Worker John should charge a rate of $53 per hour to maintain his office salary if working as a freelancer.


That’s a bit high (is what many of you may be thinking).  You’d be wrong.  Worker John has to purchase his own equipment, supplies, insurance and such – most freelance gigs do not come with such benefits.  Worker John also has to account for his own taxes, social security and retirement funds.  At the end of the day, Worker John will not pocket $53 per hour, not even close.

That’s the long and the short of it.

Freelancing?  Afraid to charge what you’re worth?  One key reminder: you can charge less, but it will not be sustainable for you, not unless you have a trust fund accessible and ready to go at a moment’s notice – or unless you can pack it all in and move to some place cheap (really cheap) like Thailand (plenty do this successfully and love it, for my family that’s not currently an option).

If you freelance regularly and find that you are putting in quality work and not seeing much reward (as in, your compensation is much lower than what the going rate should be – see my notes above), try discussing this with your clients if possible.  If you explain the need for a rate increase and they value you and your work, you should find success in most cases.  I’ve talked to some freelancers who had great success in raising their rates by 20, 30 or even 100%.  At the end of the day, however, you may have to replace some clients with others.  Try not to take that personally and don’t make it personal (easier said than done, I know), but business is business – you’re entitled to seek out a fair market wage for your region and occupation, just do it gently and kindly – that might mean helping a low wage client find a replacement candidate to take over your work.

And if you’re a business owner confront with an increase in wages (virtual workers need raises too), again, it’s not personal.  It’s business.  When you hire a freelancer you should be hiring a business professional.

Hiring?  Scoffing at the thought of paying for western world workers?  Ok, I say, you can low ball and see how that works for you (the best workers will move on eventually).  Or you can hire cheap foreign labor, if you find that ethical, but you may find that you’ll spend so much time training, backtracking and reviewing each line of work, that it may actually cost you more in the long run (your time is money as well, doncha know!).

I’m not knocking global hiring practices, far from it, but I am saying that in the grand scheme of things (as with all things) you get what you pay for, and your online brand will reflect your commitment to valuing all that goes into building that brand.  Consumers and buyers are quite savvy these days.  Value yourself and others will follow suit.

Invest in a culture of quality (in and out) and quality customers will follow!


If you are a freelancer and wondering what you should actually charge, try the Freelance Rate Calculator for a start.

If you are a small online business owner and wondering what you should actually pay, try (plug in the job title and the US region) and you’ll get a breakdown of salary ranges, benefits and normal compensation levels for any given job (you can even check salary levels based on experience level).

Chime in! What are you thoughts on today’s challenging marketplace?