Hi, readers welcome back to our blog. This lesson is about How to Structure profitable deals in 2022. It will also show you how to set up the terms, the scope of work and in the payment on Upwork projects. The reason this lesson is important because you need to know how to structure freelance deals. So, you can one number:
- Protect yourself
- So, you can put yourself in a position to be the most profitable.
In this article we are going to cover hourly vs 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 we will cover.
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. We will also cover about Long term projects and short-term projects and I’ll be going over why you should actually be targeting both of these, even if you’re just starting.
Then I will go into more detail about how the milestones in the escrow on Upwork work when you’re doing one on those fixed price projects.
Upwork in 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 then 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 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 date that’s already available for you on the platform, which will be diving into.
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 proper. This is where you can provide multiple different options, it will serve as that next touch point towards closing the deal.
Hourly Projects
Now, let’s look at what an hourly job looks like when you were in the proposal process. So, when you are 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 $100 and then you’re bidding on a job at twenty dollars an hour. That’s now going to look good for client. They’re going to wonder why you’re only bidding twenty dollars and why on your profile you’re are saying 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 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. 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 can see at right of the image above, you can see 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 article you shouldn’t 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 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. Wither way, the part I love about hourly projects is that you have that ability to build them and their card gets charge on a weekly basis.
So, every 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 the detailed things on them, it can start to eat away your time and your productivity.
Even if you’re doing an hourly project on the platform, Upwork still helps you with that entire process.
Fixed Price Projects
This is the layout when you are bidding on a fixed price project. So, you can choose here, it’ll ask you, so you want to be paid by milestones 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 segmented is that is if you’d like to get a down payment, for example you can also do that in the form of milestones.
What happens is, once the job is approved, will have the client already pay that money to Upwork and Upwork keeps it in what called and 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. 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 very low hourly rate.
Please remember this is the what you can decide, your client have to decide, if they want to pay by project or by milestone. As you do through with job applications and sending up proposals, keep this in mind as you look at each job.
Short Term vs. Long Term Projects
Upwork is also a great place for many different types of projects, from complete 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.
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 an 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 into a long-term position. 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.
keep that in mind because you could still start with a long-term contract and you can start out with a trail 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.
Milestones & Escrow
When you working on the milestones and escrow, this is what is look like in the above picture. You can enter in each different milestone and he’ll let you add as many as you want. From there, you can breakdown the dude date and the amount of that specific milestone. So, when you on the fixed price projects, the first thing is that you and the client both agree on the terms and the milestones.
Then the client will be deposing the money for that first milestone. And then once that is complete and the client approves the work, that money get 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 projects you, and it seven protects the client because Upwork will make sure the work is delivered if the client doesn’t accept the project.
This helps you our so much you get to get paid throughout the project and it look good on your profile. Once a milestone is complete, all you do is submit the work, and Upwork handles that whole process for you of sending it to 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.
Once again, it will show you underneath how much you’ll receive after the Upwork fees are taken out.
Conclusion
These are the two ways you can use to make profitable deals with Upwork. There are many other freelance platforms on the Internet. But, Upwork is best because of its popularity and its a straightforward platform.
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