I earned $50K more because of COVID last year
Pandemic-induced efficiency is real, and we’re all better off for it.
If you follow my writing you’ll know I’m not afraid to tackle the often-taboo issue of money. I freely discuss what I earn as a freelance designer because I believe it’s not done often enough, and being honest about money can help teach immensely valuable business lessons. There’s also nothing quite as compelling as using specific real-world examples like dollars and cents.
So what lesson did I learn from my 2020 freelancing income report? I made 33% more than the year before, and that’s mostly due to COVID.
The pandemic is a disaster. I don’t want to minimise the hurt some people have faced. But it’s also been a blessing — an acceleration of much-needed changes to the antiquated ways we used to work. Lockdowns made us work much smarter, and here’s my concrete proof of the benefits.
First, some context:
- I’m a 38-year-old, well-educated, middle-class white male living in Auckland, New Zealand.
- I have ample self-discipline and a strong work ethic.
- I’ve been running my freelance design business for almost 20 years.
- I provide the sole income for my household, but have tremendous support from my wife and kids to help me do my job well.
- I’ve developed high expertise in my field of UX/UI design, and a strong local reputation.
It goes without saying that my personal equation starts with some privilege, but I’ve also been working at this for a long, long time. Developing expert skills, processes, and reputation is a prerequisite to earning a good income through freelancing, no matter where you start or what field you’re in.
Now that you know a bit about me, let’s get back to money.
I’m trying to diversify my income streams, but only one is growing
Here’s how my income breaks down for the 2020 calendar year:
- Design work for clients: $202,249.47 (pre-tax) — this is almost $50K higher than last year! I explain why below.
- Training & coaching: $2,150.00
- Writing: $2,575.60
These figures are in NZD. Converted to USD, they total roughly $150K.
My writing income is from Medium.com. I didn’t start writing as a way to earn money — I just wanted to share my experience —the money is a modest byproduct.
Training and coaching is consulting with creative organisations to upskill their digital design processes, or simply mentoring other freelancers to help navigate their careers. It’s an income stream I’d like to increase in the future, as this type of work can generally command higher rates than design, and it’s a welcome change of pace.
The majority of my income came from direct client work. That’s my bread and butter. I love working with clients to solve their tricky design problems. I thrive in the intersection of strategy, usability, and visual design. And I couldn’t do this job without the wonderful variety I get by working with new clients and unique challenges every time I start a new project.
Client work is also the income stream I managed to increase significantly this year. The important thing to note is that this increase isn’t from working more. I kept the same work hours as I always do. I also haven’t increased my rate in the past year (although, if my demand is any gauge, I probably should!). In fact, I took an extra week’s holiday last spring and still managed to earn significantly more.
How? The pandemic made me (and nearly everyone else) more efficient. I’ve harnessed that change to earn more money in less time.
The numbers above are not all profit, of course. I bought a new iMac recently — to replace my 5-year-old model — and a Macbook Air as well, that replaced an ancient notebook from 2013. I bought a new iPhone too — my last one was 6 years old (and it was doing just fine, but I wanted a better camera). I continue to subscribe to expensive software like Adobe CC, my online accounting app, and other necessary ongoing costs of business.
Despite these recent big outlays on technology, I keep my expenses low and never spend frivolously. I hold on to devices for 5+ years rather than upgrading to the latest and greatest each cycle. I work from home, limit travel, and don’t spend money on alcohol or daily coffee.
Remember, profit is income minus expenses. Keeping outgoing costs down is equally important to increasing income. But of course, that can only take you so far. Exponential growth requires more than frugal spending.
The upside to lockdown
I’ve always taken pride in using my time efficiently and credit that as one main factor in my freelance success. Over the past five years, I’ve made a conscious effort to seek out ways to improve business efficiency: by reducing admin time, eliminating distractions, and maximising my focused billable hours each day. I was already trending upward in efficiency, but COVID accelerated those changes.
All of a sudden, in-person meetings (and the travel to and from them) were replaced by shorter video calls. And as people realised (duh!) the efficiency of reducing meetings, some of the video calls where scrapped in favour of emails or Slack messages. What seemed like overnight, my clients learned to communicate smarter, and I’ve reaped the benefits.
Here’s a concrete example. I work roughly 9:30–5:00 every weekday. After checking emails and other admin time, lunch, and small breaks throughout the day, I end up with about six hours of focused, billable time every workday. I don’t work evenings or weekends.
Before the pandemic, those hours would sometimes be interrupted by inefficient or unbillable meet-and-greets with new clients, face-to-face kick-off meetings for new projects, or travelling to and from in-person presentations and feedback. Now, most of that is done virtually or completely asynchronously, which means I’m making better use of all six of those billable hours every single day.
The pandemic also means we’re all travelling less, which further reduces unproductive time.
I haven’t been working longer hours, and I haven’t increased my rate. I’m simply making more money in the same daytime hours because distractions have been minimised.
There’s now more time for actually working. Thank you lockdown.
Other things that increase the efficiency of billable time
Pandemic or not, here are some other factors that help me make more money in less time.
- I work on large, long design projects. This means I have to find new clients less often, which equates to less time on proposals, relationship building, etc. Last year I worked on 11 projects for 8 clients, with an average project size of over $18,000 (lowest $8K, highest $50K+).
- I’ve honed my professional communication skills. I know when and how to update and engage my clients to keep the wheels turning with constant progress updates. This is mostly email and instant messaging and can be done asynchronously. This is key to keeping project momentum going and eliminate delays.
- I schedule very carefully, and that requires accurate estimation of project durations (which I break down into weekly chunks). Most of my time is spent head-down and focused on client work with very little idle gaps between projects. I had a total of two slow weeks in transition between projects for the entire year. The downside of this scheduling efficiency is that I can’t find time to update my own website, or any other personal projects.
- I work on only two big projects at a time. That means fewer things to divide my attention. Come the end of the month I only have a few invoices to send, reducing my admin time too.
- I make use of good online tools to decrease mundane tasks. Xero for accounting, Cushion for scheduling, Trello for task management, Google docs for proposals, InVision for design feedback, Slack or Whatsapp for instant communication. You get the idea. If there’s any task that’s taking you too long, there’s probably an app that will help you do it better. (Or, consider outsourcing it to someone else to free up your time completely).
The downsides of being ultra-efficient
Intense focus and extreme efficiency are fantastic tools to increase profit, but they can come at a cost when you carry their weight alone on your shoulders.
Years ago I went through a rough period of constant daily headaches. From mild fuzziness and difficulty focusing, to full-on migraines and everything in between. My doctors were baffled. The specialists they sent me too found no answers either. I tried every alternative under the sun — acupuncture and Chinese medicine, craniosacral therapy, candida yeast killing diets, colon cleanses, Indian oil treatments. I had my brain scanned for tumours, my blood tested for weaknesses, and my endocrine systems examined for irregularities. For years nothing improved the situation.
Then, with the help of an Ayurdevic “vaidya”, a commitment of more than a year on the right herbal supplements, and some small diet and lifestyle changes, I learned the nature of the imbalance that was causing my suffering.
Part of that imbalance was too much focus and not enough fun. What made me successful in my career was killing my health.
Years later and I now know how to maintain the same intense focus and efficiency without harming my mind-body balance. This was a very important lesson for me because I’m in this for the long-haul. Freelancing is my career, not a stop-gap measure. If it’s not sustainable, it’s a failure.
Failure means burn-out. It leads to contempt instead of joy for your work. It makes even your greatest strengths and passions a chore and a struggle. Maximising focus and efficiently is not to be taken lightly once you’ve experienced the consequences of going too extreme.
The recipe: efficiency balanced with joy
I’m proud to say that last year’s record-setting income was balanced with great pride and joy in my work. Earning more wasn’t about working harder or longer. The word “hustle” is never found in my equation for freelance success. Growing my freelance income was about chasing my passion, not chasing money. Working smarter, not harder. Ignoring my ego, and putting my clients’ success first.
It just happened that the pandemic aided, not hindered, those goals.
Eye-watering sums of money come when you’re doing what delivers maximum value to the world. And that never happens if it’s work you can’t get fully invested in. So while I can point to greater efficiency as the reason for this year’s specific increase in income, the larger lesson is that I’m earning more because I’m attracting work that lands perfectly in my sweet spot of value. Work who’s purpose I can get passionate about and who’s challenges I have the experience to solve.
Anyone who’s built a career around that sweet spot will tell you that money isn’t a goal, it’s a byproduct. Money is simply a measure of whether or not you’re any good at what you do. So the path to earning more money is simple: Constant improvement. Get better at your craft, and equally better at running a business. Become more efficient, and do better work in less time. Find the intersection of your skill and passion and carve out the niche that lets your value shine.
The money will come. You’ll be surprised and baffled at how it grows because it doesn’t feel like you’re working harder. That’s my $206K lesson for 2020. Find a thing you like, get damn good at it, and learn how to build a business around that service. When you master that simple formula, growth is almost automatic — in a booming economy or an uncertain pandemic, it doesn’t much matter. It’s difficult NOT to make more money than the year before, because that would require either reducing your rates (which nobody ever does) or getting worse at what you do (which is damn hard to do).
My $50K increase in income last year can be explained by pandemic-accelerated efficiency. The $150K it’s built on top of is earned from the joy of delivering great value over and over again.
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Hi, I'm Benek Lisefski. Since 2001 I've run my own independent design business. Join me as I unfold 18 years of freelance business knowledge: honest advice and practical tips to help you take your indie career from good to great.
MediumTop writer in Design, Business, Creativity, and Entrepreneurship.