Occasionally we invite professionals to wax poetic about issues of importance to the Elance community. Here are some thoughts from Sangeet Paul Choudary, Singapore-based author of the blog Platform Thinking.
Marketplaces are difficult businesses to get off the ground. A marketplace without buyers cannot attract sellers and vice versa. In fact, the infamy of this proverbial chicken and egg problem detracts entrepreneurs from the challenges that a marketplace presents after it has successfully gained adoption and is successfully matching buyers with sellers. After all, marketplaces for products, like Ebay and Etsy seem to have it all working for them once they gain adoption.
Why the eBay of remote services behaves differently
Services marketplaces, however, present a unique challenge. Most services marketplaces cannot facilitate a transaction before the buyer and seller agree on the terms of the service. Also, actual exchange of money often follows the delivery of the service and the delivery of the service requires the buyer and seller to directly interact with each other. Connecting buyers and sellers directly before facilitating the transaction cut weakens a marketplace's ability to capture value. The party that is charged is naturally motivated to abandon the platform and conduct the transaction off-platform.
Marketplaces that fail to capture the transaction often resort to a lead generation, paid placement or subscription-based revenue model. The classifieds model has traditionally worked on paid placement. Dating websites and B2B marketplaces work on a subscription-based model while several financial comparison engines work on a lead generation model. However, lead generation models are attractive only at very high levels of activity and subscription-based revenue models make the chicken and egg problem worse than it already is. If your monetization model involves extracting a cut from the buyer-seller transaction, you need to figure out a way to own the transaction.
Solving the buyer decision-making problem
Services marketplaces like Fiverr, Groupon and Airbnb try to solve this problem by preventing the users from directly connecting before the actual transaction. These marketplaces typically try to provide all the information that a buyer needs to make a transaction decision. Groupon features services from sellers that are largely standardized. While less standardized, Airbnb and Fiverr try to provide enough information for the buyers to make a decision without having to contact the seller.
Additionally, some marketplaces charge the buyer ahead of the transaction and remit money to the service provider after the provision of services, thus providing some insurance to the buyer, encouraging her to transact.
The two-pronged challenge of professional services marketplaces
Unfortunately, the above strategies fail with professional services marketplaces for two reasons.
First, it is much easier to take the transaction off-platform in the case of marketplaces connecting professionals. Freelancer marketplaces like Elance or expert marketplaces like Clarity are particularly prone to off-platform transactions for two reasons:
a) Clients need to know information about service providers before making a transaction decision
b) Once the end users know each other, they can potentially connect directly on LinkedIn or other networks, thus avoiding the platform cut
Second, professional services marketplaces require discussions, exchanges and workflow management during the provision of services before the actual charge can be levied. As a result, charging the buyer ahead of the transaction is all the more complicated.
So how do professional services marketplaces own and retain the transaction?
To own the transaction, professional services marketplaces need to think like SAAS businesses!
This may sound counter-intuitive. After all, a marketplace's goal is to connect the two sides, complete the transaction and get out of the way, isn't it?
Clarity's early success illustrates that a marketplace's role may be a lot more than just connecting buyers to sellers. Clarity connects advice seekers with experts. Traditionally, such marketplaces would connect the two sides, charge a lead generation fee and allow them to transact off-platform. Clarity provides additional call management and invoicing capabilities that serve to capture the transaction on the platform. Since the call management software manages per-minute billing, advice seekers have the option to opt out of a call that isn't proving too useful. For the experts, the integrated payments and invoicing provides additional value. There is enough value for both sides to prevent them from leaving the platform to avoid the cut.
Clarity is one of many examples of platforms which are using workflow management solutions to capture the transaction. Services marketplaces like Elance focus on providing work-tracking and billing solutions that provide value to both sides and capture the transaction on-platform.
When marketplaces behave like SAAS businesses, the following design principles are commonly observed:
1. The SAAS workflow tools should create additional value for both sides, not just for one. This prevents either side from abandoning the platform for the transaction.
3. The interaction management tools should feedback into some form of on-platform reputation. Reputation is an added source of value that ensures stickiness to the platform. Clarity calls are followed by a request for rating the other side. Over time, the rating increases discoverability of an expert on the platform and acts as social proof for further callers.
The added benefit of engagement and stickiness
Workflow and interaction management tools also help make the platform more sticky. The traditional marketplace model has a very transactional use case. There is no need for a user to return often to such a marketplace. Users turn up only when they're looking for something specific. With workflow management tools, the post-matching interactions are also captured on the platform, which encourages users to return often and to actively use the platform.
Secondly, a marketplace is only as good as the liquidity of available suppliers. As a result, there is no real need for a buyer to stick to a particular marketplace, transaction after transaction, especially if two or more competing marketplaces have similar liquidity and choice. Workflow management solutions help create stickiness because the requirement of on boarding on and learning new workflow management tools acts as a greater barrier to switch and can potentially keep users loyal to a particular marketplace.
The SAAS-first marketplace
In recent times, we have been seeing the model flipped. Businesses are now building SAAS workflow solutions first to get entrenched among the demand side and then opening out the marketplace, to get suppliers in. An invoicing service spreads out to become a B2B order management platform. A payroll software provider expands to append a marketplace that can bring in freelancers which are then managed using the same payroll software. This also solves the chicken and egg problem by staging the launch of the marketplace.
In general, if you run a marketplace that requires services to be exchanged remotely, provisioning workflow management solutions to facilitate this exchange is a great way to own the transaction and create greater engagement and stickiness for users.
Occasionally we invite professionals to wax poetic about issues of importance to the Elance community. Here are some thoughts from Tamsin Fox-Davies, a Small Business Marketing Mentor at Constant Contact UK.
If you read my article about how virtual teams and tools can change your business for the better, you’ll already know that outsourcing and using online software like Constant Contact are brilliant ways to grow and increase profits.
However, despite being really easy to use, there are a few common mistakes that can undo the benefits of online tools:
1. Not using what you pay for
How often have you seen someone (maybe you!) sign up for a tool or service, and then fail to actually use it? I see this ALL the time, and it makes no sense. The thing about tools like Constant Contact and FreeAgent, or outsourcing through Elance, is that just signing up does not magically fix your problems or move you forward. You have to actually DO something with them.
Error avoidance tip:
When you sign up for a new virtual tool or service, start using it straight away – even if it’s just on a small test project or task. This will prevent you from getting stuck in limbo, and will get your virtual tools and resources working for you as quickly as possible.
2. Lack of monitoring
Once you’re up and running with your tools or outsourcers, it’s important that you check in to see that all is working as you’d hoped, so that you can make adjustments as necessary. If you just ‘set it and forget it’ all sorts of problems may occur.
Error avoidance tip:
Most virtual tools have in-built reporting, so use it. For example, with Constant Contact each email you send out has its own report, so you can see if your message is being opened, which links get the most clicks, as well as new subscribers/unsubsribes.
3. Flogging a dead horse
If you are monitoring the teams and tools that you’re using, you should know if they’re working for you or not. The job doesn’t stop there though, you need to look at the things that aren’t doing as well for you as you’d hoped, and decide if they need changing or if you should leave them to run as they are for a little longer.
Error avoidance tip:
As our CEO, Gail Goodman, likes to say ‘hope is not a strategy’. So stop hoping that things will improve if you ignore them, and start testing different ideas that could help. Testing isn’t complicated, it just means that you try something new, and then see if it works.
We’re proud to be partnering with Elance and FreeAgent to bring you this highly useful seminar for the second time, due to the excellent feedback from previous attendees.
About Tamsin Fox-Davies
A Small Business Marketing Mentor at Constant Contact UK, her time is spent zooming around the UK delivering the free marketing education that Constant Contact loves to provide to small businesses. She likes cakes and shoes (and shoe cakes).
Occasionally we invite professionals to wax poetic about issues of importance to Elance clients and freelancers. Here are some thoughts from Ashwin Satyanarayana, an online marketing strategist and big fan of Elance.
I confess, it was a shameless trick to make the title irresistible for the lazy freelancers, but the truth is this: Either there is “hard sell” or years of hard work involved before the “easy sell”.
Personal development guru Steve Pavlina says it best, “Challenging work, when intelligently chosen, pays off.” Challenging work is painful. It sucks your soul. Yet, it’s this pain that charts the path to your growth. Pain, by the way, is a ruthless, unbiased, and a horrendously hardnosed teacher.
Yet, there’s a way for freelancers to land more jobs. You are on Elance and that should be enough work for this lifetime and the next. It’s not about whether there are jobs (because there are too many of them out there). It’s about the approach:
The Rule of Pure Hustle.
For freelancers who dig digital work, “hustle” here is of the digital kind.
You’d send proposals, write guest posts, develop your own content for your blog, generate alternate content, and compose social media specific content.
On Elance specifically, the hustle is entirely digital. It’s simple: How many proposals do you send out everyday? Hustling on Elance has a specific workflow: Customize your proposals, fix a set number of proposals you’ll make per day, send in proposals irrespective of what happens to the proposals you make.
It’s not like heaving bags of cement and working in harsh conditions (oil rigs or construction work) and also doesn’t require you to shove your hands between moving gears and free-falling pistons.
You’ve just run out of excuses to not “hustle” at least when it’s digital.
Play by the numbers.
It’s amazing how numbers (in the sense of activity volume) come to your rescue. I am a freelance writer and here is how my averages play out:
Number of proposals or bids sent per day: 20 (and all of them are customized)
Historic average conversion rate: 10%
Number of opportunities that accrue per day: 2
Average ticket size per opportunity: $350
Total bookings made per day: $350 x 2 = $700
If I work 20 days a month, I make: $700 x 20 = $14,000.
Want more? Can you do with less? Go play with the numbers.
Now, the numbers look good here but in real life there are things like the state of your mind, motivation levels, hunger, distractions, people, and current workloads that you have to think of.
Find exactly 20 right opportunities to apply to everyday and in months (or sooner), you’ll have more than you can handle. Elance, at any given point, has thousands of jobs across categories. You’ll never fall short of opportunities to apply to. Of course, ignore those “Peanut Projects” and others who look for “Monkey labor”, if you want to. Assuming you do take all of that into account and still manage to pull it off, I can hear your cash register ringing.
Being creative with the act of “looking out.”
Jen Hubley Luckwaldt of Payscale points out that more than 80% of job openings aren’t advertised. While you let that sink in, browse Peter Cappelli’s explanation of why employers aren’t filling up open jobs, in the Harvard Business Review.
Clearly, there’s impetus to getting creative with “opportunity seeking” for freelancers. The competition is understandably high for every opportunity. So, here are a few ideas to kick-start your opportunity patrolling on Elance:
Cross Sell: On Elance, there are two ways to make more money: getting clients and selling more to the clients that you manage to secure.
To make more money per client, you’ll have to upsell your services. While bidding, the key lies in something so simple that we miss it every time: it’s called “asking for it”.
Let’s assume that the client posts a brief asking for exactly 12 blog posts a month (3 per week). You could send in a custom proposal along with other services you can offer: upload posts and manage comments through their CMS; find and add images to every blog post; do their social media management for them; let them know that you can also do guest blogging campaigns.
The worst that could happen (apart from getting no response to your proposal): Clients will stick to their original requirement and commission you to work on those 12 blog posts a month.
All I did was put up an offer. If accepted, I earn more and the client is happy. If the offer were not accepted, I’d still end up blogging for the client.
Find channel partners: Reach out to others on Elance. Web designers and developers generally don’t take up content development work. Clients, however, ask developers for content work, and vice versa. Virtual assistants could team up with anyone. You get the drift, don’t you?
Be everywhere with your mettle: Creative types should showcase – that’s a given.
Elance already has a functional portfolio section. Instead of putting up files on your portfolio, use graphics (even for word documents and other content). Web Designer and developers could do the same.
What other ways can you think of?
Build a legacy
Here’s one way to sell easy: do work upfront, give to the community, and create a legacy.
Now, it’s against Elance Terms and Conditions to offer free work to clients. It’s not against any Elance policies to provide value to the Elance Community itself, though.
Designers/developers can sit tight and create templates for free on Elance. Did you know that you could head to the Water Cooler, create free templates for other freelancers to use, and let others download these templates?
If you are a content developer, blogger, or writer, you can offer to write guest posts on the Elance Blog, to begin with. You could also create helpful posts and publish them as a new topic on the Water Cooler.
When you rustle enough leaves and make some commercially viable noise, you create a name for yourself.
You, in effect, create a legacy.
When you give away, you earn credibility and trust. Once you are past the tipping point, selling is automatic. You could contribute, write a book, develop a community website, and lead a tribe. In years, you’d develop enough credibility and build a personal brand that can pump your pipeline up.
Brent Weaver of Hotpressweb.com actually built bcgurus.com as a community site that helps him get loads of credibility, trust, and visibility. Daniel Larsson of RightInbox.com chronicles how Brent Weaver manages to do it. Do we have lessons to pick or what?
Which of these tips do you think you can act on?
Ashwin Satyanarayana is an online marketing strategist and is the founder of Fetchprofits -- an end-to-end digital marketing services company. He is a passionate blogger, technology evangelist, and an incorrigible world traveler.
Occasionally we invite professionals to wax poetic about issues of importance to Elance clients in general and startups in particular. Here are some thoughts from Carlo Pandian, a big Elance fan and successful entrepreneur.
Practically every guide to social media marketing guide will assure its readers that quality content is the single most important key to success. That’s great news if you have within your team the talent to implement this sound advice, but if not then the requisite know-how will have to be ensured utilizing independent contractors.
In-house or not in-house.
There are advantages and drawbacks to using remote workers for the web content provision.
While you will find many great freelancers on Elance, you will have to be sure they have the necessary experience and knowledge of your niche industry to produce anything other than generic content.
The talent in that case may require some tracking down, or else you can train in-house resources, which will take time...and money.
Integration with existing systems, security risks, knowledge transfer and management issues are other areas you’ll have to give some thought to. Using accounting software such as the QuickBooks from Intuit will help smooth out some of the cash flow issues when an outsourcing option is implemented.
By hiring skilled online social media experts you’ll be assured of top quality, on-time content and will be able to manage your project more effectively than if you have to rely on in-house talent which may not be up to the challenge.
You’ll also be able to hire expert video, illustrators, copy and infographics providers only when you require them, so you won’t have to pay for a permanent content provider even when there’s no work going on.
In terms of the online market and big competition, smaller niche companies are able to exert effective leverage when they outsource to professional content providers. They’ll also be able to concentrate more on customer satisfaction once production has been transferred out.
Business owners should assess the relative merits of various outsourcing companies before hiring them, as it is crucial to identify the services on offer before engaging. You need them to be able to create original, fresh and often innovative content which is targeted specifically at your market audience.
The proficiency levels of writers and image manipulators can be checked on by giving them sample tests before responsibility for the project is handed over. Before hiring a particular company for the task in hand, carry out some preliminary research and consultations. Take a good look through their portfolio and read some client reviews of previous projects they’ve been involved with.
You may even choose to hire the social media services of more than one specialist provider, depending on the volumes of content you need and whether it will be on a regular basis.
In terms of internet marketing strategies, web content is absolutely critical. Without effective content, businesses have no means of attracting the all-important search engines and generating the necessary web traffic.
About Carlo: Carlo Pandian is a freelance blogger that is interested in social media, start-ups and freelancing. He is a regular contributor at Techli and loves writing about how small businesses can share great web content thanks to services like Elance.
Occasionally we invite professionals to wax poetic about issues of importance to Elance clients in general and startups in particular. Here are some thoughts from Nellie Akalp, a big Elance fan who also happens to be a successful entrepreneur and CEO of CorpNet.com.
As the summer heats up, vacation season kicks into full swing. Employees with office jobs enjoy all those traditional perks like paid vacation days, while time-pressed, cost-conscious startups, small business owners, and contractors are left wondering how to get that much needed time off without jeopardizing their business and clients.
However, small businesses, startups and entrepreneurs have one advantage, and that’s the ability to mix business and pleasure…at least when it comes to expensing parts of your summer travel. Here are some of the basics of what you need to know (but as with any general tax advice, it’s a good idea to discuss your specifics with a tax advisor):
1. The primary purpose needs to be business.
The IRS will let you deduct travel expenses if the primary purpose of the trip is for business. You can include a few days of fun in a business trip, but the majority of days must be for business activities. If not, you won’t be able to make any transportation deductions. So, if you have 3 days of client meetings (or a seminar) and 2 travel days, that counts as 5 business days – meaning you’d most likely be able to tack on 4 days of vacation and still have it count as a business trip.
2. What can you deduct?
In general, you’re able to deduct any transportation costs (plane tickets, taxis, airport parking, etc.) needed to get you to your destination. And as a general rule of thumb for U.S. based companies and startups, you can deduct 100% of lodging, tips, car rentals, and 50% of your food for any of the business days. Refer to IRS Pub 463 for all the details on which expenses can be deducted.
3. Sandwich a weekend between business days.
Normally, you can only deduct your on-the-road expenses only during the business portion of a trip. So, if you attended a conference Monday-Wednesday and then spent Thursday and Friday sightseeing, you would not be able to deduct your expenses for Thursday and Friday. However, if you have a business day on Friday and Monday, you are able to deduct your hotel, meal, and other costs incurred over the weekend too.
4. Document your expenses and keep all lodging receipts!
You don’t have to worry about keeping a pocketful of receipts- the IRS doesn’t require receipts for a travel expense that’s under $75. The one exception is lodging; you’ll need a receipt for any lodging expense, no matter how much. Keep in mind that just because you don’t need a receipt, you still must keep a good record of each expense. Consider putting all expenses on a business credit card, so you have a single paper trail.
5. Make sure you set up your business appointments before you leave.
You can’t just take off on a vacation and hope to be able to talk ‘business’ on the plane or find a new customer lead in the hotel lobby. The IRS requires that you have at least one business appointment already scheduled before you leave (what they call “prior set business purpose”).
As with any tax strategy, the best way to avoid trouble is to be honest about your intentions, deduct only the expenses you’re entitled to, and then keep all supporting documentation to back up those deductions. We all know how hard you’re working, so see if it’s possible to follow the rules while expensing the transportation costs to enjoy a few days of relaxation at the beach.
Occasionally we invite professionals to wax poetic about issues of importance to clients who hire on Elance. Here are some thoughts from David Bakke, a small business owner who writes about money management and productivity on the blog Money Crashers Personal Finance.
In small business ownership, cutting costs is key. While you can certainly benefit by marketing your business through social media free of charge, there are many other ways that you can save - and one major way to save is by enlisting the services of affordable, productive freelancers.
Make a good choice, and your small business will benefit significantly. To help you choose wisely, here are five tips:
Be sure to read each freelancer’s feedback on Elance, and ask for references from people you’re consider hiring. Also be sure to contact references to learn how well the candidate performed on previous projects. Inquire whether all deadlines were met, and how well the candidate performed on specific areas of a similar project that are most important to you.
3. Institute a Stringent Interview Process.
Once you narrow down your search to two or three candidates, you must begin a comprehensive interview process. This is especially important, since you're unable to meet face-to-face with the individual. Phone interviews make a fine starting point, and you can also schedule video interviews via Skype. Prepare a detailed set of open-ended questions, and don't be afraid to ask for more information or for the candidate to expand on his or her answers.
4. Explicitly Define Your Goals.
You'll never hire the right person for the job unless you clearly outline what you expect. This explanation should include a time-frame and any other specific requirements you may have. If a freelancer doesn't clearly understand what is expected, they can't provide satisfactory results.
Now and again we like to invite clients and freelancers to this blog, asking them to discuss their real-life experiences and offer insights they’ve gleaned from a world of online work. Today we’ve slated Ronald van den Hoff, who will explain his views on Society3.0. Ronald is co-founder of CDEF Hodlings, a collection of companies in the hospitality and social media space.
The present economic difficulties in Europe will more than likely persist, and may well be felt for a long time.
Many countries within and outside Europe will have to endure a great deal of strife in the next few years. In my opinion there is nothing being done about these conditions, except a lot of hot air being blown -- which will convert into financial disillusions.
Just think of the enormous rise of the ageing population in Europe and the fragile situation of the welfare state, the pension system and the connected level of spending of our municipalities, the rising costs of our health care and the inevitable depletion of our natural reserves. We are yet to experience the effects of these developments. Hot air, after all, is intangible. And, intangibility translates into financial depreciation.
The old economic, financial & politic systems, not being capable of delivering the answers to these dynamics, are in a zombie-state, meaning we are in ‘transition’, moving from the industrial era to, what I call ‘Society3.0’.
We see more and more people who have clearly chosen how they want to define themselves, their environment and their relationships with other people.
They are the people I call global citizens: People of the new world. These Society3.0 citizens cannot and will not deal with the thinking of the establishment anymore. They want to add value in their work and life in a significantly different way, namely by creating value instead of growth. Most of all, the global citizen wants a sustainable society. The Society30.
Through the fast growing network of inter-human contact (thank you Web1.0, 2.0, 3.0), a permanent connectivity comes into being between the organization, its people and its other stakeholders. This social exchange of information and knowledge leads to collaboration and eventually results in “doing business” with each other in real time-virtual-value networks.
The most important value creation players in the new global Interdependent Economy are no longer large organizations, but increasingly small to medium sized networked enterprises, complemented by an army of independent professionals – the Knowmads (Moravec, 2008). We’re talking about a new generation of people who consider virtual social communication to be normal and find sharing even more common good; they find the use of the Internet common practice. The collapse or even the disappearance of large traditional organizational entities will accelerate this process.
These new value networks need virtual and physical locations to meet and to collaborate. The office as we know it is gone. The traditional school, library, and meeting centre will follow. Besides virtual platforms to do business, like Elance, we need new physical locations in new geographical locations where people can meet, work, exchange information and more.
Now and again we like to invite freelancers and clients to this blog, asking them to discuss their real-life experiences and offer insights they’ve gleaned from online work. Today we’ve slated Toke Kruse, who will explain what he’s looking for when hiring Elancers.
My name is Toke Kruse. As the owner of several businesses, I often use Elance to find freelancers for various types of projects.
Though hundreds of freelancers have sent me proposals in response to jobs I’ve posted on Elance, there are a few key things that least 80% of them could have done differently, and ended up with a far better chance of being awarded one of my projects.
With that in mind, I wanted to give you some advice on how to optimize your proposals – three simple but important actions that will increase your rate of job awards. As the CEO of Billy’s Billing, a provider of accounting software for freelancers and small businesses, these are points I always look for when choosing a freelancer.
#1: Provide a great presentation of yourself, your skills and your success.
You know better than anyone what you’re capable of, and all about the great work you’ve done in the past. Don’t keep it a secret! Present yourself well and honestly, highlighting your strengths and showcasing relevant examples of your work:
Make sure your profile is well written – that means good grammar, perfect spelling and well-constructed sentences and paragraphs. It also means a tone and “flavor” that will appeal to the sort of client you prefer to work with. That might be bright and friendly, or it might be more conservative and businesslike – it’s up to you.
Include a good photo, and highlight your past experience and other qualifications as a proven provider. If you’re new to Elance, say so. There are a lot of clients willing to give newcomers a try.
Your profile should also include examples of your best work (even if it wasn’t done through Elance), and feedback showing how satisfied clients have been with what you’ve provided. No client is likely to hire a provider who doesn’t have any good references and work samples.
Build up a portfolio showing the different types of work you do, and be sure to attach relevant samples when bidding on a job.
As time goes on, be sure to keep your profile up to date, too. Add new samples of great work, new feedback from enthusiastic clients, new qualifications and so on.
#2: Offer the perfect product and a clear pricing policy.
It’s vital to your success that you offer and provide an outstanding product. I know this isn’t shocking news, but still it needs to be said – and kept foremost in your mind on every project you undertake.
The people who are consistently the most successful – in any field – are those who make it a point always to provide more than what the customer or client expects. A better product, a faster delivery, more prompt, courteous and clear communication – there are all sorts of ways you can exceed expectations. And it’s just good business to do it.
Next, it’s important to have a sensible, fair and clearly stated pricing policy. Make sure your customers or clients know, right from the start, exactly what your products and services will cost them. A clear, firm agreement on price before a project begins will save everyone involved headaches and upset later on.
When stating your pricing policy, be sure to mention factors behind your pricing that are important to the client or customer: the superb quality of your work, your speedy and reliable delivery, your flexibility and willingness to work with the client to ensure the product is exactly what’s needed, and so on.
I won’t try to go into all the ins and outs of pricing here. The subject is worth a whole article (or two or three) all by itself. And fortunately there’s plenty of good information and advice available. To put it very briefly, though:
You don’t want to overcharge, so that the customer feels he or she won’t receive fair value for the price, and look for someone who will charge less.
You don’t want to undercharge, either – that’s not being fair to yourself, and can end up driving you out of business.
By the way, as you may already have learned, there are some people posting jobs on Elance who are ONLY interested in getting the lowest price possible. And there are plenty of providers who, for whatever reason, will charge ridiculously low prices. Unfortunately for the clients who hire them, their product quality and service are often ridiculously low, too. So don’t compromise and offer prices way below what your work is worth. There are plenty of clients who appreciate great quality and are willing to pay a fair price for it.
#3: Be certain of what your client needs, wants and expects.
Before making a bid on a project, it can be very helpful to communicate with the prospective client, to clarify what he or she needs. Elance has provided ways for you to do this. (If you’re not sure how, check their “Help” section.)
In sending such a communication, introduce yourself briefly, tell the client that you’re interested in the project, and ask for information or clarifications you need in order to make a fair bid. A good client (one you’re likely to be happy to work for) will appreciate your questions and the professionalism they indicate.
Be sure to be very clear and concise. If your potential client is anything like me, they’ll be receiving a flurry of proposals and bids – and they don’t have time to be reading long Harry Potter stories.
Whether you’re asking questions about a project, or making a direct proposal, it’s very helpful if you include samples of past work that are similar to the project in question. In some cases you might even supply a small sample of what you would do on that specific project. I don’t mean you should do a part of the project for free – no way. But a small sample of how you would approach the task can demonstrate that you really DO understand what’s needed, and that you CAN provide it. (It can also open the door to helpful clarification of the client’s needs. Either way, you both win.)
I hope what I’ve said here will help you to stand out from the crowd, land more projects and increase your earnings as a freelancer. I look forward to seeing you here on Elance!
With tax time coming in the U.S., we thought the time was right to get everyone thinking about how to best prepare your business (or freelance operation) for tariff time. To get the ball rolling, here is a guest blog post from Nellie Akalp of CorpNet.
Have you ever wondered if your business is legit? Is there a way to reduce self-employment taxes? If so, read on to learn more about business structures and freelancing.
By default, you’re a sole proprietorship.
If you’ve never actually chosen a business structure, then your business is a sole proprietorship. As the simplest business structure, the sole prop doesn’t separate your personal and business finances. That means that if your business is sued or can’t pay its debts, you may be required to tap into your personal savings and property.
A lot of small businesses transition to a formal business structure like an LLC or Corporation. These structures will help protect your personal assets from any liabilities of your freelance business. And in some cases, there can be tax benefits as well.
Business structures: an overview
Three common U.S. business structures are: the LLC (Limited Liability Company), S Corporation, and C Corporation. Each structure has pros and cons depending on your specific situation. However, in most cases the C Corporation is overkill for a freelancer. For several reasons (including tax structure), the C Corporation is a good option for bigger companies who plan to go public, seek VC funding, or invest profits back into the company.
The LLC and S Corporation are popular choices for the small business/freelancer. Both give you the option for “pass through” taxation where the company doesn’t pay taxes, but all profits and losses are passed on to your personal tax report. That probably sounds a lot like how it works with a sole proprietorship, but there’s a big difference.
If you’re a sole proprietor and pay your taxes on a Schedule C, you’re subject to paying self-employment tax in addition to income taxes. This can leave you scratching your head wondering what happened to your hard-earned money.
However, Bert Seither, Director of Operations at Corporate Tax Network, explains that many freelancers will set up as an S Corporation or LLC that’s taxed as an S Corp in order to reduce self-employment taxes.
“When you have an S Corp or an LLC that’s taxed like an S Corp you can be paid a good portion of your money from the entity to yourself in distributions (think of distributions as bonuses). The distributions are not subject to any self-employment taxes,” said Seither.
“However, keep in mind that you cannot take all of your money in distributions and are required to pay yourself a ‘fair and reasonable’ salary,” he added.
While taxes are typically at the forefront of everyone’s mind, you need to consider other aspects that can have just as big an impact on your bottom line. If you incorporate as an S Corporation, you’ll need to set up a board of directors, file annual reports, hold shareholder’s meetings, etc.
With an LLC, there’s a lot less paperwork and fewer ongoing administrative formalities to follow than a corporation. For some people, the S Corporation can be too burdensome.
Take some time to learn about the different business structures; talk to a tax advisor about your particular situation. It’s easy to set up and you’ll be protecting your personal assets and giving your business more legitimacy.
While Elance provides you with many handy tools for communicating and collaborating, sometimes teams have specific needs and opt for third-party solutions. One software program that’s gaining a lot of traction is Doodle, an online scheduling tool. Below is a quick guest blog post from Doodle’s CEO, Michael Näf, explaining the product.
Communication is something that’s essential for any project to be a success. As an Elancer, you’ve surely experienced the truth of that statement in a personal way.
With that said, finding a time to have a meeting with one or more people can definitely be a challenge. Just because a time works for you doesn’t mean that it’s going to work for everyone. That may be obvious, but it’s still a frustrating reality to deal with.
We created an online scheduling tool, called Doodle, to help solve the problem of getting people together at a specific time. If you’d like to make scheduling less painful, then I’d encourage you to use Doodle alongside Elance to take your collaboration to the next level.
Benefiting from better communications.
Most of the products that we offer through Doodle are completely free, and we also provide extensive time zone, language, and calendar support. This means that collaboration through an international online platform like Elance will be effortless.
Included below are some of the core features you can leverage:
Group Scheduling - Registration isn't required to use the basic free service, so getting started is quick and easy. To schedule a meeting, you just select some possible dates and times and let the participants specify what works best for them. With a quick look, you'll see everyone's availability and be able to make a final decision that satisfies the entire group.
Premium Doodle - This ad-free professional version of Doodle offers premium functionality and customizable branding options.
MeetMe - With this personal scheduling profile, your Elance contacts can see when you’re busy and available and will then be able to submit meeting requests to get on your calendar.
BookMe - Designed to help service providers streamline their booking process online.
Being more productive on Elance.
While Doodle can be used to make your project communication on Elance more productive, we’ve also found that Elance has helped our business become more productive. Just like with any other company, specific projects randomly come up from time to time, and while our team could handle them on their own, this activity can take time away from other established priorities.
In order to keep our employees focused on their usual tasks and avoid burdening them with additional tasks, we’ve used Elance freelancers to help us with things like user support and market research, and our experiences have been very positive.
In the end, it’s all about getting work done in an efficient way, and I hope you’ll be able to do that with Doodle in the same way that we’ve done that with Elance.
About the Author
Michael Näf is the CEO of Doodle, which is the world’s leading online scheduling service. Doodle is based in Zurich, Switzerland and is used by more than fifteen million people per month.