Dec. 18, 2020

Pros and Cons of Performance-Based Pay

Pros and Cons of Performance-Based Pay

Once you decided what service to offer as a freelancer, there are few types of fee structures you can choose from:

  • Hourly pay
  • Per project
  • Performance-based pay

The most common fee structures are the hourly and project-based ones, while the performance pay one is, how I call it, the courageous way of billing.

In this episode, you will….

  • Learn what is a performance-based pay as a fee structure
  • Know what are the advantaged and disadvantages of being paid per performance
  • Understand when to select to be paid per performance

Insights:

  • Jim Rohn said  "profits are better than wages. Wages will make you a living, profits can make you a fortune. You know it is a bit difficult to get rich on wages, but anybody can get rich on profits."
  • From a client’s perspective, this is the best payment method they can use because they know that their money spent on a specific project will provide them with the needed outcomes. Also, the client stops wasting money on things that are not necessary, such as paying someone per hour and not too sure what to expect in a matter of results.
  • And if you are starting in freelancing right now, do not think of yourself as a late starter because guess what: you really have the opportunity to learn from all the mistakes other freelancers did before you.

Tips:

  • Be transparent- a client appreciates transparency, confidentiality, and great customer service. Be honest, keep them updated, no matter in what direction the project is heading.
  • Ask other freelancers- there are freelancers out there that are more than happy to share from their past mistakes and how they billed is one of them. Interact with others, ask for advice, see what worked out for them, and what was an impediment.

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Until next time,

Doina