Just imagine for a second how it would impact your life if you were able to double your income?
Having 2K, 5K or 10K extra in monthly income…
How great would that feel? What would you be able to do, that you aren’t able to do now?
To most people, just earning 10-15% extra would change their life drastically, but you as a freelancer have a chance to earn much more than just 10-15%.
This is why you can double your freelance income
The average Joe/Jane is hired to do a certain amount of work, like ship 300 e-commerce orders daily.
If they underperform and only ship 280 orders daily, they risk getting fired.
If they are better than their target, let’s say they ship 330 orders daily over a long period of time, they might be able to negotiate a raise, but that raise can’t be more than the percentage they perform better than their target.
The company they work for has calculated an average shipping cost. So when an employee ships 300 orders in a 7 hour effective work day at $15/hour, every shipped order costs the company ((7×15)/300) = 0,35 cent/shipped order just in wages.
So even if an employee is able to ship 330 orders/day that employee will still only receive 0,35 cent/order which is (30 orders x 0,35 cents) = $10,5 extra per day.
In other words, their entire income is based on how many orders they can ship every day.
As a freelancer, you actually have at least three handles you can adjust and not just one as the employee. Your three adjustable handles are:
Audience – Sales efficiency – Average income per client
All freelancers have to take on a marketing role, a sales role and the role of the specialist you are. You need to find an audience to help, then you need to convince them to work with you and then you do the promised work.
Your income is based on how well these three handles work together which is why we can state that: (Audience x Sales efficiency x Average income per client = Your revenue).
As we have been taught in math, if we want to double a number on one side of an equation we need to double it on the other side as well.
The 3 simple ways to double your freelance income
1: (Audience x 2) x Sales efficiency x Average income per client = 2x revenue
2: Audience x (2 x Sales efficiency) x Average income per client = 2x revenue
3: Audience x Sales efficiency x (2 x Average income per client) = 2x revenue
So by adjusting any of the handles in our equation twice as good as before, we will automatically double our revenue.
Your handles can also be referred to as your KPIs and they are basically key indicators that will tell you how well or bad your business is doing. By tracking these three KPIs on a monthly basis, you can quickly determine where there might be a problem if your income is lower one month or identify where the lowest hanging fruits are if you want to increase your revenue.
Before you’ll be able to double your revenue, you need to know where your business is at. That means start tracking these three KPIs from today! It can be done by just writing the numbers down on a piece of paper or by creating a smart Excel sheet.
Here’s how you measure each of the three handles/KPIs.
KPI 1: Audience
Your audience can be measured in how many people that have been exposed to your business in a certain timeframe.
It could be any of the following activities done in a certain timeframe like a month:
- Number of cold calls to businesses.
- Number of business cards you’ve given away at networking events.
- Number of businesses you’ve been emailing.
- Number of visitors on your website.
- Number of people that has seen your facebook ad.
KPI 2: Sales efficiency
Your sales efficiency, also called conversion rate, is measured in how big a percentage of your audience that has converted into clients.
Let’s just say that you’ve called 100 businesses in the last month and 10 of them has been turned into clients. That leaves you with a (clients / prospects x 100) = 10% conversion rate.
KPI 3: Average income per client
The last important KPI you should measure is the average income per client. This is easily calculated by taking your revenue and dividing it by your number of clients.
Example: $3,000 / 6 clients = $500 per client.
A practical example on how to double your income
Let’s say you once a month goes to a marketing event where you get to speak in front of 600 people.
KPI 1 = 600
After every event, you get contacted by an average of 6 people who wants to do business with you.
KPI 2 = (6 / 600 * 100) = 1%
These clients bring in an average of $3,000 in revenue every month.
KPI 3 = (3,000 / 6 clients) = $500 per client.
Add them together in the equation: (600 x 1% x 500 = $3,000)
Let’s now say you want to make $6,000 instead of $3,000 per month
How would you do this?
The four ways you can double your freelance income
With the equation in mind, you actually have 4 basic ways of doubling your freelance income.
1 – Double your audience
Based on the fact that you convert 1% of the audience that listened to you on stage, you could just double the audience. Well, as your not responsible for attracting people to the event it might be hard, but you could go twice every month instead of just once. That will roughly give you an audience of a combined 1,200 people.
(1200 people x 1% x $500 = $6,000)
2 – Double your conversion rate
At the moment you only get 6 calls from an audience of 600. It might be because you don’t focus enough on selling in your presentation on stage. So let’s assume that you change your presentation to include a case-study at the end showing how you boosted a client’s revenue 20% by writing a better sales copy for their website. This intrigues a larger portion of your audience and now 12 people call you instead of 6.
(600 people x 2% x $500 = $6,000)
3 – Double your average income per client
So far you have charged an hourly rate for your work. That has enabled you to earn an average of $500 per client. You decide to try out a value based pricing strategy and by focusing on the value you bring your clients and not the number of hours you work, you’re now able to charge $1,000 per client.
(600 people x 1% x $1000 = $6,000)
4 – A bit of everything
Let’s say that you decide to speak at an event hosting 750 people instead of 600. This audience is more focused which makes it easier to convince them to work with you. You’ve also decided to offer all your clients an additional “fast-delivery” service which you charge extra for so your average income gets a little boost.
(750 people x 1,2% x $666 = $6,000)
We’re not done – Cause we are no ordinary people!
As most freelancers have a tendency to do several things at the same time, we’re faced with an issue cause the previous calculations are only valid for one customer acquisition channel at a time.
So let’s say that you’re only doing two things: You’re speaking and cold calling.
In this case, you’ll ideally need two equations. They will be similar, but you’ll ideally want to track your audience in each case, along with your average income per client and conversion rate for each method like this example:
Cold calling: (50 businesses x 6% x $600 = $1,800)
Speaking: (300 people x 0,1% x $700 = $2,100)
Let’s say that you’re smart and that you want to focus on one marketing channel at a time, making sure you’re maximizing that before moving on to another.
Which of the two marketing methods above would you keep working on?
While there’s a slight difference in your income, it’s still hard to see which marketing strategy will be the best of the ones above. But if you simply took a note of how long time you spend working on each of these, it might prove to be a lot simpler.
Let’s say that for cold calling you spent 3 hours doing research and 10 hours calling. Total time 13 hours and compared with the income you’ve generated ($1800/13 hours) = $138 per hour spent on marketing.
For the speaking gig, you spent 5 hours pitching the founder of the event. Then you spent 4 hours making the presentation, 2 hours rehearsing it and 8 hours on the day traveling back and forth and actually doing the presentation. Total hours spent = 19 hours. In this case, you’ve earned ($2,100/19) = $110 per hour spent on marketing.
By looking at it this way, you would actually have earned more if you had continued to cold call your audience.
So there you have it. Start measuring your three KPIs today and soon you’ll be able to see where exactly you have to improve to double your income. It doesn’t even have to be that damn hard.