I am convinced that Elance can provide a very good revenue stream to a freelancer. I am also convinced that it takes a particular approach and the right expectations for that to happen. In this post, I’m going to share with you 5 keys to succeeding as an Elance provider.
Now, I realize that many of you may have a negative view of Elance. So let me explain why I’m so big on this online resource – and why it can be a great vehicle for generating good-paying freelance projects relatively fast.
I have been an Elance provider since the fall of 2004. At that time I was marketing director for a software company in Houston, and I was getting tired of the corporate grind. I researched Elance, figured out what my cost would be for 6 months and what revenue I would need to bring in order to break even. The proposition seemed reasonable, so I signed up and started bidding.
Within six weeks, I had booked $20,000 in projects!
It was a no-brainer: I quit the job, and as of January 1, 2005, I was the owner of 4R Marketing, a copywriting and marketing consultancy. Revenues passed the six-figure mark before the company was two years old, due in large part to my participation on Elance.
I have now earned more than $100,000 on Elance, and though today I have other more prominent revenue channels, I am still earning around $1,000 per month from Elance project awards.
Here are five characteristics of a winning Elance provider, based on what I’ve learned over the last five years:
#1: Realistic Expectations
Elance has a questionable reputation among some freelancers because of the “low ball” projects that are posted there. Yes, I admit, the majority of projects on the board are ones I wouldn’t bid on with a ten-foot pole. But there are gems in there that make it all worthwhile. And success is in the numbers: It takes about 20 bids to earn one award, and many new Elance providers don’t realize that the ratio is so low. I’m running a 6% win rate myself right now, but I have no problem with that!
#2: Commitment
Elance has to be treated like any other business-building initiative. It takes time and consistency. If a provider balks at receiving bid declines, or gets annoyed by the number of projects that go unawarded (and about half of those 20 in the ratio above never do get awarded), he or she is likely to take a “stop and go” approach to working on Elance that won’t get them very far. Purchase the right level of membership, commit to at least a six-month trial period, and work the board consistently every week.
#3: Appropriate Pricing
I advocated a three-dimensional approach to pricing of any kind, based on 1) your need, 2) your value, and 3) your market. On Elance, this translates to 1) how much you want to make, 2) what level of experience you can demonstrate to buyers, and 3) what you can reasonably charge in the very-low-overhead Elance environment.
As an illustration, my standard hourly rate on Elance is 60% my non-Elance rate. This may seem low, but I make more profit from Elance jobs because my overhead (including marketing and sales costs) is almost nonexistent. Plus, I find that most Elance clients don’t need a lot of handholding, and there’s no way I’d be able to charge my non-Elance rate on the board because the competition would wipe the floor with me.
#4: Good Business Sense
This is simply about understanding business basics like marketing and selling, providing good customer service, and managing projects effectively. To this I add understanding the Elance “quid pro quo,” by which I mean that Elance serves as a virtual sales representative – generating a load of job leads for a base fee (i.e., monthly subscription fee) plus commission (i.e., the 8.75% cut they charge on revenues).
#5: Comfort in a Virtual Environment
Not everyone – whether buyer or seller – is comfortable doing business virtually. Some people just can’t get past the “sight unseen” aspect of Elance projects, which makes it unlikely that Elance will be of benefit to them.
If you have been thinking about Elance as a possible addition to your business building efforts – or as a way to get your freelance business started relatively quickly – and the characteristics I list here fit your approach, I say go for it! If you approach this resource with the right mindset and strategy, you will be well on the way to earning good revenues as an Elance provider!
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Trish Lambert is a freelance writer, marketing consultant and business coach who offers a course designed to help freelancers get traction on Elance. For more information about the course, check out http://successinsweatpants.net/winning-with-elance/
