This lesson is called how to structure profitable deals, and it will show you how to set up the terms,
the scope of work and the payments on Upwork projects.
The reason this lesson is important is because you need to know how to structure freelance deals so
you can no one protect yourself.
And number two, so you can put yourself in a position to be the most profitable.
In this lesson, we are going to cover hourly versus fixed price projects.
These are the two different types of projects that Upwork provides.
An hourly project is one where it's an ongoing position and you submit your hours on a weekly basis.
Upwork has two different features for this, which I will cover, and the fixed price projects are projects
that aren't based on hours but are based on the work to be completed.
These are usually split into what is called milestones, which I will also be going into more detail
on.
Next, we will discuss the difference between short term projects and long term projects.
And I'll be going over why you should actually be targeting both of these, even if you're just starting
out.
Then I will go into more detail about how the milestones in the escrow on Upwork work when you're doing
one of those fixed price projects.
Upwork is an intuitive platform, but it's helpful to know how you can structure this and how everything
is set up.
So when you go to do it, you know exactly what to do, and we will then go over how to understand the
scope of work with a potential client.
This will make sure that it's a good project for you, and it will also help qualify them because it
will get you both on the exact same page of what is expected from both party and what needs to be delivered
by you for the price that you are charging.
Next, we will go over how you can start to determine what to charge clients, what to bid on different
projects.
And this goes into a lot of the data that's already available for you on the platform, which will be
diving into.
And then lastly, we will cover how you can provide a final written quote.
This is the last thing that you provide after you go on that first client call.
You do the sales demonstration and you've gotten everything that the client wants on paper.
This is where you can provide multiple different options, and it will serve as that next touch point
towards closing the deal.
Now, let's look at what an hourly job looks like when you were in the proposal process.
So when you're bidding on an hourly job, you're able to put in the hourly rate that you want to bid.
It will also show you what your hourly profile rate is that you set.
But you don't have to stick to that.
So when you're setting your profile rate, you want to make sure that it's around the same rate that
you're bidding for jobs that, for example, you don't want your profile rate to say one 100 and then
you're bidding on a job at twenty dollars an hour.
That's not going to look good for the client.
They're going to wonder why they're you're only bidding twenty dollars and y on your profile.
You're saying that you're worth $100.
So be accurate here with what you were normally going to charge for that hourly rate because the client
can and will see your profile next.
Upwork then shows you that 20 percent service fee that they take out, and then it'll show you how much
you'll receive in your bank.
This is just a little helpful calculation that they provide.
And remember, this is just on that first five hundred, and after you get over that five hundred,
that service fee begins to drop.
If you look on the right, you can see that it says it includes Upwork hourly protection, and it's
important to understand that the hourly protection on Upwork is only available if you use their app
and they have an app that you download on your computer and it records what you're doing, basically.
So I don't actually use that because I don't want my information and my client's info and stuff like
that recorded.
So I actually use the manual function when I'm doing hourly jobs, and the manual function allows you
to go in on a week by week and day by day basis, and you just log in the work that you complete.
In my experience, most clients are more than happy with this, and most don't even know that there
is that desktop recording version.
So if you're working with a client like I teach in this academy, you shouldn't have to worry about
getting that Upwork hourly protection because you'll be working with someone where you both know exactly
what is to be expected and it's going to be a good relationship.
So that is what I suggest.
But if you do want to take advantage of that Upwork hourly protection, I suggest looking further into
the terms at the time and you can learn how you can take advantage of that.
Either way, the part I love about hourly projects is that you have that ability to build them and their
car just gets charged on a weekly basis, so every single week you're getting paid for your services
and you're never in that position where you need to chase down payment or you need to send invoices
and make sure they all get paid.
That might sound like a good problem to have, but I'll tell you from experience, when you're chasing
clients down for money and you have to send weekly invoices with detailed things on them, it can start
to eat away at your time and your productivity.
So even if you're doing an hourly project on the platform, Upwork still helps you with that entire
process.
Next, this is the layout when you are bidding on a fixed price project so you can choose here, it'll
ask you, do you want to be paid by milestone or by project?
So in this example, I have just chosen to buy Project because there wasn't really a milestone breakdown
for this specific job.
For example, if it was a larger project that you could break down into different segments, that's
where you can include those milestones and you can break up your bid into different sections.
Another way that you can segment it is if you'd like to get a down payment, for example, you can also
do that in the form of milestones.
And what happens is Upwork, once the job is approved, will have the client already pay that money
to Upwork, and Upwork keeps it in what is called an Upwork escrow account.
Now, the cool thing about the Upwork fixed price protection is that when you do these type of projects,
you pretty much are guaranteed to get paid if you're doing the work for that milestone.
So this is really good for projects like websites and multiple phase projects because you can make sure
that you're getting paid every step of the way.
And it also helps avoid that scope creep.
And that basically means when the client starts asking you to do things that are outside of what was
already agreed upon.
Taking advantage of the milestones is something I definitely suggest you do, and taking advantage of
fixed price jobs in general is a great way to get your start on Upwork.
Another reason this is good is because if you're working for smaller projects to begin with, it looks
better on your profile to have jobs for even 50, 75 100 bucks as opposed to it does having jobs where
you worked for a very low hourly rate.
So as we will go deeper into this course, I will show you how you can move more towards multi retainers
and charging on a monthly basis.
But when you're first starting out, these are the different ways you can apply to a job.
You can either go the hourly rate or the fixed price rate.
And this is all set up by the client, so you don't get to choose this.
The client chooses whether they want to pay hourly or if they want to pay by project or by milestone.
As you go through with your job applications and sending up proposals, keep this in mind as you look
at each job.
And Upwork is also a great place for many different types of projects, from complex projects to shorter
term projects.
There's pretty much opportunity for everyone out there.
Keep in mind, though, that short term projects might lead to more work and long term relationships.
I've seen this happen a lot, especially with some of my clients that I currently still have.
It started out as a short term position.
And sometimes they'll even write this in the proposal and they'll say this is a short term position.
But if you do well, there is opportunity for long term work.
The more you start to look for that, I guarantee you'll start to see that a lot of the short term projects
also have that ability to turn to a long term position.
And long term projects could be anything from an agency looking for a steady addition to their team
all the way to a business owner looking to hire a long term marketing person.
So keep that in mind because you could still start with a long term contract and you can start out with
a trial period or a phase one.
It's all up to you, and that's why freelancing is such an amazing thing.
It allows you to be in control of what you want to work on and what kind of projects you want to go
after.
When you're working on the milestones and the escrow, this is what it looks like you can enter in each
different milestone and he'll let you add as many as you want.
From there, you can break down the due date and the amount of that specific milestone.
So when you're on these fixed price projects, the first thing is that you and the client both agree
on the terms and the milestones.
Then the client will deposit the money for that first milestone.
And then once that is complete and the client approves the work, that money gets released to you.
And then before you start working on the next part of the project, that's when they put the money in
for the second milestone.
So you're always covered here, it protects you, and it even protects the client because Upwork will
make sure that the work is delivered if the client doesn't accept the project.
So this helps you out so much you get to get paid throughout the project and it looks good on your profile.
And once a milestone is complete, all you do is submit the work, and Upwork handles that whole process
for you of sending it to the client and having them approve everything.
It's only the click of a few buttons.
This is so much easier than having to figure out how a client wants to get billed.
Whether you have to email them, whether you need to send them a physical check, Upwork takes all of
that confusion out of it, and it helps both you and the client.
In this example, here, I broke it down to a project start and a project complete.
So for this, using that same hundred dollar project example, you can ask for 50 percent down and then
you can say a 50 percent completion milestone after the project is complete, it's up to you how you
want to structure this.
And once again, it will show you underneath how much you'll receive after the Upwork fees are taken
out.
Next, understanding the scope of work is a very important part of your freelance journey because as
you're starting to work with clients and you're on these phone calls and you're on these sales demos.
Understanding exactly what the client wants is what will dictate how successful you are going to be.
The truth is and freelancing scope creep is a big problem and scope creep is when you start out doing
one thing and over time a client starts asking for more and more.
And I learned this the hard way.
Some of my initial clients to begin with, I didn't have that clear scope of work down on paper, so
I would use things like digital marketing and social media advertising when I should have used more
specific terms, such as.
Facebook advertising and website design and even going further than that.
And speaking about how frequently I will be doing things and what is included in that project.
Having those clear written deliverables allows you to go back to something that was agreed upon in writing.
And I like to keep this all through Upwork messaging.
So then you can show them an exact message on Upwork of what you guys agreed on initially.
This will help you develop those clear deliverables and stick to them throughout the course of the project.
If the client wants something that's outside of that scope, that's no problem.
That gives you an opportunity now to upsell them and offer an additional service.
When you're on calls with potential clients and you're on sales demonstrations and you're in that qualifying
period, always ask them how they are going to measure success.
It might sound simple, but in reality it's more complicated.
Get specific with this.
If they say they just want more leads, ask them how many more leads is success to them?
Is it one hundred leads per month or is it 200?
Is it a thousand?
And then go deeper.
Ask them how much they're able to afford for each lead is fifty dollars.
A lead good is 10 is five.
It all depends on the business you're speaking to because every product and service being sold has a
different profit margin, so you need to understand how you're going to measure success.
So when you go and start to work on the project, there's no surprises down the line.
You and the client need to know exactly what is going to be delivered on both ends.
So if the client needs to be the one to help deliver content and photos for you to market on their website,
that needs to be in the scope of work, and it needs to say that you were only working with content
that the client provides.
This will help you if, for example, the client comes to you and says that you're not providing any
content for the work and you can go back and show them exactly where you agree that they are the ones
that are going to provide that for you.
It's very helpful because number one, people forget what they say.
Number two, it's very easy to try to get more out of a freelancer once they're already working on a
project.
And number three, usually it's easy for a freelancer to just try to help that client out because they
want to secure that relationship for the long term.
But what I'm telling you is to not get yourself in this position and make sure you understand how success
is going to be measured with that specific client on that specific project.
Then stay dedicated to being big on communication.
Don't hold anything back.
Make sure you ask all the questions you need until they answer everything you need to know in those
two previous points.
So if they're not giving you clear answers on how success is measured or what exactly they need you
to provide, it's not time to give them a quote yet.
If they keep pushing you on price and you still can't get those answers, it's showing you they're not
ready to even move forward yet.
It's another way to understand what the scope of work is and how close you are to landing that client.
Next, let's move into determining what to charge.
Now that you understand the entire scope of work for the project and you understand how success is going
to be measured now, it's time to settle on a couple prices for the different services you are going
to offer.
As I stated earlier, never just give one price for one product or for one service.
You want to give multiple options to the client so they can decide what's the best fit for them.
I like to provide three different options for each potential project, and what I do is I provide it
in an incremental basis, so I'll start with what I can provide for the cheapest amount and then for
the middle most amount and then for the most amount.
That also helps the client understand that based on what they are going to pay, they're going to get
a different amount of value.
This helps you get away from always being tied to hourly positions and helps you get paid for the value
that you're providing.
So when you're determining what to charge a potential client, it's a combination of a few factors you
want to look at what the client's budget is, that they posted the length of the job and the skill level
that they're looking for.
So if it's an hourly position, they'll normally put a range there of what it is that they're looking
for.
And you can start to combine all those different factors and understand what you can get away with charging
for the value you provide.
So for this specific example, they're looking for expert level freelancers, and they're looking to
pay 50 to 100 dollars an hour for that freelancer.
And the project length is less than a month and the hours are to be determined.
What this tells me is you could charge close to that $100 rate if you're able to provide that level
of value for them as you're going through and submitting proposals for projects.
Remember to keep the client's budget in mind if you completely ignore this and you bid something that's
double their budget.
The client is not going to take you seriously, and they're going to throw your proposal in the garbage.
You also want to look at the activity level on the job, see how much competition there is.
See how many proposals are submitted, how many freelancers are being interviewed.
How many invites have been sent.
And then you can get an idea for what the competition level is from there when you have the paid plan.
You can see what the competitors have bid for the project.
So for this specific example, you can see that the high bid is one hundred right at the top of the
client's budget and the low bid is 50 at the bottom.
And the average bid comes in right at 77 25.
So if I was bidding on this project and I knew I was a great fit, I would probably bid somewhere around
80 or 90 dollars.
That allows you to come under that top range, but you're still showing you're worth more than the low
and average range.
This is a great way to price your hourly bids.
Lastly, look at how much the client has spent on Upwork, and most importantly, if it's an hourly
project, what their hourly rate paid is.
So in this example, this job looks like the client is willing to pay those expert level premiums to
have their problem solved.
As you can see, their average hourly rate paid is $80 and 94 cents, and even better, they've paid
for one hundred twenty three hours of freelancers help on the platform.
That's over $9000.
They've spent over nine hires and over 14 jobs posted, with sixty five percent of those hired.
This is all information you can use to understand and determine what price you should be bidding for
each specific job.
In conclusion, what you decide to bid and to charge for your projects is all up to what the market
will pay for it.
It's about the value you provide, the problems you solve and what clients are willing to pay for that.
So keep that in mind as you're building your proposals out and as you're going through this process,
you want to stay in the best range for success possible, so stay within the client's budget.
Make sure you're looking at their entire payment profile and bid a competitive rate for the value that
you provide.
You can also use the sample quote template that is included with this lesson, and it's going to show
you how you can summarize the project, you can outline your approach and the timeline and then provide
multiple options along with the prices for each.
Here's a sneak peek of what that looks like.
Of course, you can expand on this, but this is the template that will help you understand how you
can start to structure your written quote.
This is a document that you send to the potential client after you've had that first sales demo and
that first client call always, always, always remember to present your quote in writing.
People believe what they see.
Always email and Upwork message this over to your client.
Talk is cheap.
Don't pitch this over the phone.
You can speak with them after you've given them this, so you can negotiate and close the deal.
But the reality is in business, when things are written down, it helps validate them and it helps
the client see things in writing.
It also shines the light on the positive because you're going forward, you're putting together a document
and you're providing all of this value of how you're going to approach the project, which shows the
client ultimately that you are dedicated and you are driven.
Even just writing things down will help you close more deals.
And now, you know, how to structure profitable freelance deals.
I'll see you in the next lesson.