" How do I find clients?"
That's the question that we all wonder when we're starting our freelancing businesses or even if we've been doing it for a while and need a few extra people on our client roster.
One of the popular options for finding clients is to use platforms like Upwork. This is essentially a platform that pairs freelancers and business owners together. As a business owner, you can post a job that you need help with, and as a Freelancer, you can apply for that job and potentially get a client.
That all sounds amazing, right?
A platform where you can scroll through hundreds and thousands of opportunities. You don't have to pay for a website, post on social media, or make cold calls. So, what's the catch? That's exactly what we're going to be covering in today's blog!
Before you make the decision about whether or not Upwork is the right client acquisition tool for your business, you need to look at three different factors that will play a roll in your ability to grow your freelancing business.
One of the biggest hurdles that people struggle to get over when it comes to Upwork is the fee structure!
Unlike a traditional partnership that you have generated yourself and where you would keep 100% of the funds that are paid to you, Upwork keeps a fairly substantial percent of your earnings once a project is completed.
According to Upwork, when you land a new client on their platform, they're are entitled to 20% of the project value if it is $500 or less. Should the project be more than $500.01, then they get 10%. And finally, should you land a project for more than $10,000, they will only take 5%.
You may be looking at these fees and thinking to yourself "Well that's not bad! I still get to keep at least 80% of what I make, which is better than not having a client at all!"
While you do have a valid point. Having a client and making 80% is a positive thing, but on the other hand, there are other financial factors to take into consideration.
#1 You also have to pay taxes
Why does this matter? Well, we all have to pay taxes. There's no getting around that. This means that when you make $100, for example, on Upwork, they get $20 (20%) and you need to put approximately 25% away for tax purposes. This means that you only get to take home $55 (55%) of what you made on that $100 project.
#2 Don't forget about expenses
Running a business isn't free! While running a freelancing business can be very inexpensive, AND by using a platform like Upwork you're avoiding all the fees that come with hosting a website, an email address, etc, there are still expenses that accumulate.
This could be a monthly subscription to Canva or Adobe, maintenance on your computer or laptop, a faster internet package to have video calls with clients, and the list goes on.
Let's just say, for argument's sake, that your monthly expenses take up 5% of your income. This means that you now only make 50% of what the project is worth.
Now that you've seen the breakdown of what you ACTUALLY take home at the end of a project, wouldn't it be nice to be able to keep that 20%? Maybe.
So why does Upwork do this? Why do they charge such high fees to their freelancer in order to use the platform?
Their pricing structure suggests that they are encouraging you and the client to work together on a continuous basis. Due to the fact that as you continue to generate repeat business with one client and pass certain revenue milestone, making more than $500 with one client for example, the fees goes down, this tells us that they want you to keep working with clients. They want you to get repeat business and continue to put out high-quality work that has clients coming back for more.
If you can land a client and continue to generate more projects from them over time, your fees decrease. Therefore, the one-and-done projects are not overly favoured on the platform!
The takeaway? Bust your butt to "WOW" clients so they continue to work with you and cause those fees to go down over time!
Freelancer to Project Ratio
Let's start by saying that yes, there is competition and it can be fierce. Wether you're on Upwork or not, there is going to be competition.
So, what's the big difference between using a platform like Upwork and going out to find your own opportunities?
Upwork has a cap on the number of opportunities available to you. You can only search and apply for the opportunities that other people are advertising. This means that if there aren't enough opportunities to go around, you may struggle to find those clients for your business.
In fact, according to Upwork, there are 12 million registered freelancers, five millions registered clients, and three million opportunities posted every year.
What does this mean?
It means that there aren't enough jobs posted to cater to the amount of freelancers on the platform. In fact, if you do that math, only 25% of registered freelancers would receive ONE JOB every year!
Now, are all of those 12 million freelancers active all the time, absolutely not. I probably have an account from years ago that's considered part of that 12 million number, but I've never been active.
In any case, there's a lot of competition and not enough roles to go around, which means that it may be difficult to make a full-time living with Upwork as your primary client acquisition tool.
Like I said, you do not have control over the number of opportunities presented to you. You can only apply to however many job are posted in one day, week, or month. If there is a decrease in roles, there's a decrease in the amount of jobs you can apply to.
Versus if you were to focus on your own platform, you could reach out to an endless amount of businesses to network and offer your services.
It's Not Your Platform
The internet is this big "scary" place that everyone wants a little piece of. Whether it be for their social media, their business, etc. Looking at it from a business perspective, I want you to think about the last time you made a purchase online.
Did you Google it first?
Did you look at reviews on Amazon to see what other people thought?
Did you have a look at a website to get a feel for the company before you bought?
Your website is your opportunity to sell to prospects without you actually having to be there to start the conversation or the sales process. On someone's website, prospects can typically find:
A list of services
Information about the company or owner
Testimonials from past customers
Direct contact information
Links to other content they would find useful. This includes nurturing content for anyone who isn't 100% ready to buy right away
But what if you don't have a website? Is it the end of the world? Are you actually missing out on that many opportunities.
According to recent studies, between 70-80% of people research a company before making a purchase with them. This means that out of every 1,000 people, you're missing out on an opportunity to work with 700-800 people because you don't have a searchable hub online - your website.
Now, when someone searches on Google, is your website guaranteed to show up? No. BUT, that doesn't mean that it wouldn't. Even if an extra 30 people per month stumbled onto your website due to amazing SEO optimization and digital marketing strategies, what would that mean for your business?
With Upwork, you are one of millions on one platform. It's also a platform where business post and wait for you to come to them, therefore the search-ability isn't the primary factor here. But with your own website, you are allowing people to find you, interact with you, and potentially buy from you.
Are there costs to have a website? Absolutely!
However, with how common it is to have a website, the costs are very low. You can get a domain and a website for under $30 per month on some hosting platforms!
And if that means that 80% more people will find you, wouldn't it be worth it?
Weigh Your Pros & Cons with Upwork
When it comes down to it, Upwork may be a good option for you. If you're someone who wants to get started and find clients without building a website, posting on social media, or worrying about client acquisition strategies, then this could be a quick and easy option for you.
In 2018, Upwork actually ranked at number 16 for one of the best employers for millennials. So, they're doing something right over there!
Make sure you truly weigh the pros and cons of the platform so you're completely aware of what your client and project situation would look like should you decide to give it a try!
Want to see me breakdown the pros and cons of Upwork on video? Make sure you head over to my YouTube channel and watch as a share all of my thoughts, data, and recommendations!
Finding clients can not only feel overwhelming, but it can also seem downright impossible sometimes. Do you respond to posts on facebook, Upwork, and Indeed. Do you show up on social media and hope that someone reaches our to you?
My client acquisition crash course takes ALL the guessing and stress out of finding your next client! Snag it here for a limited time!