Before you read this post, we’d just like to let you know that you should grab a coffee and make yourself comfortable. It’s a long one – but one we feel is worth the time to read. Enjoy – and please share your thoughts in the comment section.
What do your clients cost you?
That’s a very good question. It’s a question I think every freelancer should revisit each three months or so. It’s not an easy question to answer, either, because it sounds silly. Clients are supposed to increase our revenues, not increase our costs.
But they do. In fact, everything we do in life has a cost. Determining what those costs are before taking action on anything is just plain smart.
Every accountant knows this. Every entrepreneur knows this, too. Before we sell one piece of content or one design or one consultation, we have to know the costs involved in the creation of our product or service.
Then we need to determine a price to generate profits.
The problem is that most freelancers get this part wrong. They miscalculate the costs badly – and then they end up in trouble.
Nothing in Life is Free
Sad but true. There’s a cost to everything we do. We make choices every instant of our lives.
If we want a hot coffee in the morning, the cost is a cold walk to the kitchen in the dark. A night at the movies costs organization time, wear and tear on the car, and the price of the ticket. A day playing hooky costs the double-time effort of catching up the next day.
Even those benefits we feel cost nothing at all do have an expense. To earn a friendship, we must invest time. To receive a smile, we have to do something nice. For someone to bring us a gift, we have to build up the desire to give without receiving.
We lose something with every gain.
People often ask me how I can do business without taking calls from clients. “Don’t you lose customers that way?” They’re surprised when I tend to agree that yes, I might in fact lose out on great jobs. But the loss is worth the gain – every single time.
I sat down and thought of the impact being a web-only worker might have on our business. I figured out what I needed to be happy in my job and do the best work I can, providing the ultimate service to the clients we have.
I examined the effect of the costs on my life and weighed them against the benefits. Was it even? Were there more benefits? Was the cost too high?
How Cost Affects Your Life
Each new client costs time and money. We invest in creating portfolios, spend time marketing and work on convincing clients to buy. Then we land a customer.
From thereon, it’s all good, right? We’ve spent, and now we can receive the compensation and monetary rewards, the good referral and the compliments on our work.
Unfortunately, that school of thought isn’t accurate.
How much time do we put in the production of the content or the creation of the design? Do we have to invest energy in phone calls? Are there emails to respond to and feedback to receive?
Direct costs, certainly, all part of the cost of goods sold. But wait – there’s more.
How much time for yourself do you lose with each new client? Will your stress level rise? Are you going to have to stay up late a few nights and lose some sleep? Can you maintain the pace and continue to invest energy?
Or will you get through the week tired and burned out? Will you need a few days off to recover? Is the next project that comes along going to be one too many?
Even more, what other indirect costs are involved with the client? Will your family have to miss a weekend because you’re working? Will your child have to play by himself for a while you work? Are you going to have to make excuses for that promised afternoon outside playing ball?
People forget to think of these questions, and the answers matter a great deal. Nothing counts more in your life than your personal welfare.
If you’re burned out, stressed, crunching to meet a deadline, it’s no good. If your children turn away after asking you to watch Johnny and the Sprites, muttering that, “I’ll be there in a minute,” is a lie, the cost is too high. If your partner sheds even one sigh that he or she misses you and wished you two could just have a little more time together, you’re paying too much.
The money you’ll make at week’s end? Tell me. Is it really worth it?
Don’t Ditch All Your Clients
By now, you’re probably sitting there thinking, “Oh my god… What have I done?” Relax. It’s okay. Life’s not over and you don’t need to fire all your clients.
But you do need to make better choices that have a lower cost and more benefits. You need to start operating your business with more critical thought, knowing the expense of each client that comes in.
Choose who you work with. Examine the rewards. Determine the costs. Weigh the differences between the two, and know when to let go of a job that makes you pay instead of bringing you rewards.
It’s your turn. What cost do you face in your work, and how is that expense affecting you? Do you feel that the price is just part of business? Are you resentful of it and wish things were different?
Share how you feel – and let’s see if we can’t all make changes that create a fulfilling, beneficial situation that brings rewards without costing us our lives.