Know Your Worth As A Freelancer, With Anna Cordea-Rado
📝Anna Codrea-Rado is a journalist, a podcaster and author, whose first book ‘You’re The Business; how to build a successful career when you strike out alone’ is the essential practical guide for freelancers and those running a business of one. After being made redundant in 2017, Anna took the leap and began freelancing while documenting the highs, lows and harsh realities of self-employment in her newsletter.
🙌 Taking the leap from full-time employment into the world of self-employment can open up new opportunities, earning potential, and flexibility in your career, but there are also practical and emotional challenges that come with being your own boss.
💥So, in today’s episode of The Wallet:
1️⃣ We discuss how to build healthy routines when you work for yourself and how to avoid burnout when you’re setting your own schedule.
2️⃣ Anna talks about setting your prices based on your value rather than your time, and the journey she’s been on over the last 4 years to price herself on the value she brings as opposed to the time a project might take.
3️⃣ We look at how to budget and organise your finances when you’re self-employed. Anna also shares tips on saving for the future when you have a fluctuating income.
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You can listen (55 min) and subscribe here:
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1. UNDERSTAND YOUR VALUE
“I thought freelancing would be all of the great bits about my job — the writing and doing the actual work, minus the boss and the office politics and the commute — but that is not what freelancing is. You are the entire business. You’re everything — it’s more like taking the company I used to work with, and rolling it into one person, and you are that person.”
Have you dreamt of leaving the traditional workforce and being your own boss, but don’t know where to start?
Are you struggling to figure out how much your knowledge and skills are worth?
Is the prospect of managing finances as a self-employed person utterly terrifying?
Journalist Anna Cordea-Rado thought about all of the above questions and more, as she worked her full-time office job but began to feel that something was amiss. Her final push to take the plunge came on a Friday in 2017, when her employer made her made redundant. That weekend, she made the decision to go freelance and has carved out a successful career as a self-employed journalist, podcaster and author ever since. She’s now put her accumulated freelance wisdom on paper and published her very first book, ‘You’re The Business; how to build a successful career when you strike out alone’ — the essential guide for freelancers (or those hoping to make the transition) everywhere. The earliest written evidence for the term 'freelance' comes from Sir Walter Scott's novel Ivanhoe, in which a lord refers to his paid army of 'free lances'. In the 1800’s, the term referred to a medieval mercenary who would fight for whichever nation or person paid them the most. So, in a sense, Anna feels that the word ‘freeancer’ describes her and what she does well — as it’s all about understanding and fighting for your value.
Anna, like most freelancers, has faced her share of misconceptions from colleagues and friends about her decision to go into freelancing. She remembers one particular remark made by a male colleague who told her that there was no way she could make anywhere near as much money freelancing as she would in a traditional work environment. ‘He had this very fixed idea of what success looks like in journalism, and also what the earning potentials are. But I challenged him on this — I said, no, there’s a ceiling to what you can earn, whereas there is absolutely no ceiling to what I can earn,’ Anna remembers.
From building multiple income streams to thinking creatively, Anna truly believes that there is enough room on the top for everyone and enough money in the world for everyone to earn what they want and deserve. The challenge lies in finding the right clients and not falling into what Alex Holder has coined as ‘the freelance trap’ — which is the idea that every minute that freelancers don’t spend working, costs something. The danger of seeing all your time as money is that you can end up overworking and burning out, which is why Anna is adamant not to price her work on a day rate. She advises you take into account the number of years it’s taken you to build your skillset — so just because you can get the job done in 30 minutes, doesn’t mean you should only be charging for those 30 minutes. You need to be clear about the value you can bring to your client and charge based on your skills and knowledge because that, after all, is what they’re hiring you for.
The other thing that Anna advises is to not start from the scarcity mindset of thinking, ‘this is the bare minimum I need to earn as a freelancer to get by.’ Instead, you need to realise that money is abundant, that your value is more than just the time you put into a project, and that everything has a context. Value isn’t objective, Anna says, and it largely depends on the seller. ‘To a large extent, I don’t really have set prices or a set day rate, because everything has a context, and so I try to price things based on what value I think I can bring.’
2. stay organised with your finances
Anna organises her finances in three broad areas that she separates into business, personal, and joint accounts. She’s a big fan of online banking, and tech tools in general, to help her keep track of her income and outgoings. The first thing that Anna does when she’s paid is she puts the percentage for tax away (a great tip for anyone starting out in freelancing — you really want to avoid a shocker of an HMRC bill at the end of the tax year!). She then pays a regular amount into her joint account that she shares with her partner, which takes care of their household costs and general expenditures. She also tries to pay a regular amount into her personal account, which covers costs like clothing. Once she’s covered these costs, she feeds into her savings and pensions on a percentage basis, because, as with most freelancers, her income fluctuates month to month.
It’s crucial to build up a business emergency savings account that can help cover emergency costs eg., paying for a new laptop, or for covering your costs for when your income dips. Anna, for example, had to use her emergency savings for when she took time off work to write her book.
Anna advises that freelancers, where possible, look into building up revenue streams that aren’t dependent on you just doing more work. For example, if you notice that you’re not making enough money one month, Anna advises you look at your various income streams and make informed decisions based on where most of your money comes from, and prioritise that income stream until you feel comfortable doing something else.
3. You are your business, so take care of yourself
Without proper rest, your work begins to wane and your productivity falls. To avoid burn out, Anna has learnt to prioritise herself by starting the day doing things that matter to her and her well-being most, such as exercising, writing in her journal and walking the dog. ‘You’re the business means that if you’re not doing well, your business isn’t doing well. If you’re not feeling great, and you’re tired, and you’re stressed, you just can’t work,’ Anna says. Setting up boundaries with the help of automation is another tool that Anna recommends that freelancers employ, such as setting ‘out of office’ emails. Embrace the digital tools and always remember the importance of stepping back and sometimes just saying no.
RESOURCES:
You can follow and connect with Anna at:
Twitter: @annacod
Newsletter: lance.media
Podcast: Is This Working?
Book: You’re The Business
Website: annacodrearado.com
Other resources: