This last week has been a really interesting one for me.

I’ve had some freelancers reach out to me saying how they were able to charge $57/hr for their 3rd job (ever)…

And then I’ve had experienced freelancers reach out to me asking if there’s any way I could help them make over $20/hr.

Now I wish I could say this blows my mind, as you’d think it’d be impossible for new freelancers to make this much and impossible for experienced freelancers (that had a full portfolio and over 4 years of work history) to make less than $50/hr…

But I’ve also been around the game long enough to know that skill or experience aren’t what creates this difference, it’s understanding the…

Two sides of freelancing

As I’ve learned over the years, there’s really two sides to freelancing.

The first side is what I refer to as the “skill side”, which is the side that most freelancers enjoy.

This is where they actually get to practice their craft — like writing, designing, coding, etc…

But whatever it is, it’s usually something they enjoy and the reason why they started freelancing.

Now don’t get me wrong, skill is obviously important and if you can’t do the work, then you’re not going to last long…

But what most freelancers don’t realize is that skill can only carry you so far, which is also why you need to understand the business side of freelancing.

This is the part of freelancing that I was fortunate enough to learn right away, and it’s also the main reason why I was able to charge $45/hr for my first writing job while other writers are struggling to charge over $20/hr.

Again, don’t take that the wrong way as I’m not saying you should charge $45/hr just to charge $45/hr, I think you need to be able to get results before charging those rates…

But at the same time, don’t let anybody say you need XX amount of experience or XX years of education before getting there either — because that’s also wrong.

Sounds good, how do you learn the business side of things?

Well, the good news is that you don’t need your MBA or really any formal business knowledge.

There’s no need for a freelancer to understand profit margins, gross revenue, reverse supply diversification or anything like that…

But there are a few crucial components that freelancers need to be aware of, and that’s exactly what I wanted to show you today.

Business mistake #1 — Not understanding their target market

In the beginning stages, every freelancer always sets up a vague business and takes anything they can get.

The main logic behind this is that they’re new and need any opportunity that comes their way, which I’ve been through this myself and completely understand the thought process…

But here’s the thing, not having an ideal target market will kill your freelance business.

Why?

Because you’ll lack direction and try to market to everybody, and as the old saying goes…

You market to everybody, you market to nobody.

So how do you do this?

Well, it all starts with…

Business mistake #2 — Not having a niche

If you’re not familiar with niches, it’s choosing a certain target market that you’re going to work with exclusively….

And that’s very important as it allows you to not only become an expert in one field, but it also allows you to eliminate 99% of the competition.

How?

Because what most people don’t realize is that clients will always hire specialists over generalists.

To give you an example of this, let’s say you’re a gym owner that’s looking for a Facebook Ads specialist.

You post a job on Upwork.com and within a few hours, you have (at least) 20 people apply to your role.

You then open up the list of applicants to see who’s applied to your job, and in that list of 20 people there’s a good chance 19 of them are “Facebook Ad Specialists”…

Which is cool and would do the job, but then you see that one person who’s a “Facebook Marketer that specializes in the Health and Fitness Industry”…

And since you’re a busy entrepreneur that doesn’t have time to do 20 interviews, you’re probably going to choose relevance and pick the person who specializes in your niche.

In other words, most people think choosing a niche limits their opportunities as they can only go after a certain target market…

Which is true, but here’s the counterintuitive part — even though it’s less opportunity, you’ll get more jobs.

Why?

Because instead of competing against 100 other freelancers who are also “generalists”, you’re going to only be competing against other freelancers who specialize in your field, and since most freelancers don’t notice this…

Then well, you essentially have little to know competition and that makes things pretty easy.

That’s really the gist of niches, but to give you an example of how niches helped my career right away — I decided to position myself as a Copywriter for Tax Firms.

I did this because I have a good amount of knowledge in Tax (Master’s degree, IRS Enrolled Agent)…

Which allowed me to cover this category with ease, but at the same time — it was also helpful as very few (if any) writers positioned themselves as Copywriters for Tax Firms.

In short, even though I couldn’t apply to a lot of jobs out there…

Every time I applied to a writing job for Tax firms, I ALWAYS received a response…

Which usually ended up in me landing the job (only time I didn’t was when we couldn’t agree on rate).

Business mistake #3 — Not showing the client what you can do for them

I hate a lot of millennial stereotypes, but I also realize why some people would believe them…

And this is especially true in the area of accountability.

It seems like everybody wants to blame their misfortune on stupid freelancing sites, stupid clients, stupid genes, etc…

But in all honesty, it’s their fault for not understanding how to show the client what they can do for them.

The way I look at this is commodity vs valuable asset.

Commodities are something that merely serves a need, and here’s a valuable insight for you — people don’t pay a lot of money to fulfill a “need”.

To give you an example of this, typical commodities that come to my mind are eggs, milk, water, etc….

All things you need, but you really don’t care (much) about brand, so you’re probably going to go with the cheapest (or most reasonable) product.

On the other hand, there’s valuable assets…

And these are exponentially better than any other product in their field, which makes people want them and in turn — pay more for it.

Typical items in this category are things like Macbooks, Lululemon, Yeti coolers, etc…

All things that could be easily replaced by a much cheaper option, but they’re not.

Why?

Because these companies know how to market their products and show people why they should pay extra to enjoy the luxuries of their brand…

And that’s exactly what you have to do as a freelancer in order to get people to pay you more.

The good news?

It’s not that hard.

Everybody operates under herd mentality and does the same thing, so a few small tweaks easily sets you apart from the rest…

And the easiest way is just telling them why you’re able to help more than anybody else.

To give you an example of this, I was able to make myself look like a valuable asset by telling clients that my copywriting was effective because I understood the underlying psychology of purchasing behavior.

Now this is true and you should never lie to get an upper hand, but here’s the funny part…

Most other (quality) copywriters also have this knowledge, but they don’t mention it…

Which makes them look like just another copywriter (a.k.a. — a commodity).

Business mistake #4 — Not raising their rates

6 weeks ago I had somebody email me, complaining about the rates they were receiving on Upwork.

Apparently they had over 10+ years of experience and were always able to charge at least $150 for a blog post, but after getting on the “content mill” of Upwork…

They couldn’t get one person to pay them more than $50.

I could tell they were struggling with this, so I offered to look at their profile…

And after looking at it for 2 seconds, I couldn’t help but laugh.

Why?

Because they had their hourly rate set at $20/hr, and since everybody uses this as a baseline for calculating fixed prices (i.e. they’ll divide your bid by hourly rate to see how long you think it’ll take)…

Then it’s pretty obvious why they weren’t seeing the results they wanted (because nobody pays for 7 hours of work on a 1,000 word blog).

Last but not least, I know what you’re thinking…

“Yeah, I’ll do that when I’m established but right now I need to get clients first”…

And I’m here to tell you that’s the worst approach you can take.

Why?

Because cheap rates only attracts cheap clients, and even though there are a few diamonds in the rough — most cheap clients suck to work with.

This usually results in long hours for little pay (while dealing with dbags)…

And I don’t care how little experience you have, nobody deserves to go through that.

The on top of that, a shortcut we subconciously use is that high rates = high quality…

So charging low rates essentially tells clients you don’t have confidence in your work, which is always going to scare the good ones away.

Long story short…

I know this isn’t what you want to hear, but if you’re struggling to make decent money as a freelancer — it’s because you’re doing something wrong.

Trust me, there’s high-paying clients out there that’d love to work with you and they can be found anywhere (even Upwork)…

But unless you realize you have to make some changes first, then you’ll always be stuck in freelancer’s hell.

P.S. If you want to learn a little more about this, I created a free course for you — found here