Robert Vlach: Freelance Pricing and Financial Mastery

Nigel Rawlins: Welcome Robert to the Wisepreneurs podcast, could you tell us something about yourself and where you are?

Robert Vlach: Hi Nigel, thank you for having me. It's a pleasure to be on your show. Well, I'm currently staying at Gran Canaria, which is a part of the archipelago Canary Islands. It belongs to Spain. It's one of the most southern parts of Europe, so it's a winter getaway for many European freelancers, digital nomads, remote workers.

So it's basically a sort of a melting pot for, for people who like to travel and work in different places. It's not as well known beyond Europe, I believe, but within Europe it's a very popular destination, for example, it's full of Norwegians and Scandinavians these days as well. Not only us, Central Europeans, because I'm originally from the Czech Republic.

We have like two places where we live, the Czech Republic and Spain. And I also travel a lot across Europe. I love Europe as a continent. So, I'm here, I'm working on a new book actually, it's a very calm and pleasant part of my year. Like, I'm doing the knowledge work I love and I'm with my family and I'm meeting friends, other freelancers, here on the beach, spending time with kids.

It's beautiful.

Nigel Rawlins: That sounds absolutely wonderful. So what are the temperatures like there?

Robert Vlach: Well, we are in Las Palmas de Gran Canaria, it's one of the capitals here, and it's actually considered to be a city with one of the most pleasant and stable climates in the world. So basically you have something between 18 degrees Celsius to 33. Today, for example, it was like 24 and going up to, I don't know, 29, during the days.

And, it's all year long. So sometimes you may have like a bit colder weather, a little of rain, but, usually it's like a super calm, sunny weather, like eternal spring I would say.

That's why it's so popular. It's a lot of young people with families like ours. And there are also people who are retired and they're just spending their. years and days here, vacations, but they may also be staying long term.

Nigel Rawlins: So does that sort of lovely weather and environment make it easy for you to do your research and your writing?

Robert Vlach: Yeah, exactly. I, of course I do a client work as well. I'm planning some new events for our communities. So I run basically two big freelance communities. One is the Czech one. It's navolnenoze.cz and then is freelancing. eu, which is Pan European, and we do a lot of meetups, gatherings, and these will come again in spring. So I have some downtime now where I can plan all these events and talk to these partners, but it's all done online basically. So I do both my client work when I'm here as well as this planning work, remotely. It's very easy. There is no time difference basically between Canary Islands and the rest of Europe, you know?

So I have the same time as they have. So it's, it's really easy to connect with them. Not as with you, like you have 7am and I have 8pm here on Canary Islands, right?

Nigel Rawlins: That's one of the issues I have I have to get up a lot at seven, well, I'm up at six normally, but most of my podcast interviews at seven o'clock in the morning. So I've got to have some coffee. I can't go for my morning walk, so I have to do everything afterwards. Well, Robert, one of the things I wanted to talk to you about was you wrote this fabulous book called The Freelance Way, which was probably one of the loveliest books that I've read on, well, business and freelancing, but one of the things you talk about is the differentiation between freelancers, sole proprietors and independent professionals. So I'm totally confused about the right language to use to explain it. So could we talk a little bit about that?

Robert Vlach: Yeah, sure. Absolutely. I wanted to write the book in a way that I would also go into definitions at least a little bit because it's interesting for me as a researcher and as an expert on freelance economy, but to be honest, it's not as interesting to freelancers themselves because they know they are freelancers usually, right?

Once you are set up as an independent professional, and you know that you're on your own on the market. You don't care that much about definitions. I, I had my own ambitions and intentions to dive into it a little bit because it originated actually with our freelance communities. What we do both on the Czech website, navolnenoze.cz and the English one, freelancing. eu, we publish a monthly newsletter where we sort of curate the most interesting content we find about freelancing for freelancers. And we follow hundreds of sources book writers, communities, freelance platforms, research agencies and so on. And one of the problems we are constantly dealing with is that freelancing is pretty loose and informal term, right?

You may sort of define it in any way you like, and you may be right in a way, in a certain way. So there are huge differences in the ways the term is used across the world. My favorite example, would be the difference between the UK and the US because in the US they generally incline towards using really wide definition of a freelancer.

So in most surveys done there they use a very wide, I would say super wide definition of a freelancer, meaning that they consider a freelancer, anyone who has a, let's say any amount of income from a non employment work in the last 12 months, so it may be, one babysitting for a couple of bucks.

It may be that you install a Airbnb app and rent out your room to a guest several times a year. And even then you would be considered an occasional freelancer, right? Even though you would be fully employed somewhere and so on.

On the other side of the Atlantic, there's a very reputable organization in the uk.

It's called ipse, IPSE. They publish annual reports. They follow the industry in their own right in the UK and they have a way more conservative definition. They see freelancers as I would say a bit more qualified subset of the wider self employed population.

So in broader terms, it would be like roughly a half of the self employed population there, but there are also other approaches. So you may say that, uh, for example, you would like to define a freelancer as someone who doesn't have employees, who is acting and behaving like a really independent professional, like presenting themselves as a person, not as a brand on the market.

So there are different ways how to tackle the problem of the definition. But I would say that the main point there is that it's useful to make a distinction between the legal form that you may take as a professional, which in most cases is something like being a self employed in most countries, and the approach which we would describe as independent professional or a freelancer.

So these are two different things because, there are many self employed who actually would not describe themselves as freelancers for a couple of reasons.

Typical examples would be people who are misclassified as self employed while they are treated by the client as basically employees.

So they have a single client, they invoice everything to that client. They have basically no business thinking behind what they do. They are just invoicing to a single entity, and that's it. There are also self employed who have employees, so for example, I have a couple of clients who have the status of the self employed, but they also have a brand.

And they present themselves to the market as a sort of company and they employ other people. So they wouldn't think of themselves as a freelancers or independent professionals, right? So that's a major source of confusion that being a freelancer is not equal to being self employed because some freelancers also don't have the status of being of the self employed. They may have a limited company, although they consider themselves to be freelancers or independent professionals. But, from a legal perspective, they are a limited company. So, my first takeaway here would be not to confuse the legal form with the informal description. And then there's the second debate, what is sensible, like who we should call freelancers and you have also other names or other taxonomies around it. Quite common is, uh, calling, uh, freelancers as independents, full time independents, occasional independents, independents, or part time independents. David Pink also calls them, free agents. Sometimes it has a different term. So each of these terms have a certain upsides and downsides. I generally incline to the broader term freelancer, or if I want to speak about people who are more close to being full time freelancers with the entrepreneurial mindset, I speak of independent professionals.

That's my favorite term, but it's also informal. It's not defined by any law or, uh, you know, like legal or managerial framework like you, it's basically a loose definition. So it's, uh, as I said, like, uh, as you, as, as it's quite obvious, probably it's not as interesting to freelancers, but it's very important to us who try to go into these, uh, data that we have about, uh, the freelance economy and to, for example, uh, come to a conclusion, how many freelancers are there, uh, how many, you know, full time freelancers that are there and so on.

So it's not as relevant to their daily interest of common freelancers. It's only interesting for us who are analysts, writers, speakers, tutors, people who are trying to grasp. The, the freelance economy as a whole, I would say. Does it make sense at least a little bit?

Nigel Rawlins: Yes, I've been totally confused about who I work with. I mostly work with professional women, believe it or not. They're professionals who had a working life. And, they're sometimes 60s, sometimes in their 50s, and yeah, I think I prefer the word independent professionals, because that really does describe them, because that's what they do.

Robert Vlach: Yeah, it's important. It's it because It says that they are paid for what they do, that they are serious about what they do. You know, the word professional means something to all of us. Each of us would be, I believe, able to describe an ideal professional. How they should behave, right? Like it's, it's a shared common cultural knowledge, in the Western culture, at least.

And independent means that this is not a professional that is dependent on somebody, that it's like a free agent, that it's somebody who is out there making their own decisions, you know, being the captains of their work life, I would say. So I like the, I like this connotation. Independent professional describes it perfectly. The people I work with most of the time.

Nigel Rawlins: I think I'm going to go with that, because I think what I've been seeing is Matthew Mottola in America with The Human Cloud, he wrote his book The Human Cloud. He's just saying, look, we need to call them one thing. And I think he's saying, let's go with the freelance word.

Robert Vlach: It will never happen. It's, it's, it's so informal and anybody can define it in any way. So I gave up hope on this like long time before. Like as long as there would be freelancers, independent professionals, like people would come up with the different names and different descriptions. So to me, it's not an obstacle.

I know how the market looks and I can sort of translate these terms in my mind, no matter how the author or the survey calls it, I'm just interested in the real market data. So once I'm able to get access to the data, to how the survey was conducted, how actually the questionnaire was designed like, what was the data sample?

That's okay with me. I don't mind if they call them this way or not way. I, I totally agree with Matt that it's useful if you have the vocabulary, but, I don't think that it will ever happen. It's so informal and it will stay that way.

Nigel Rawlins: I think you hit it on the nail, getting a shared, word. And yes, it is too difficult because of the stats being different. Okay. Well, let's just talk about some of the issues about being an independent professional. Obviously somebody can't just come out of school and say I'm an independent professional.

What are some of the challenges, that they have to consider? Now, I generally work with older professionals, so they're often 50 or 60 years old, so they've got quite a bit of experience behind them and they are an expert in their field. Obviously if they've been working in a full time job and then they decide look I've had enough especially if they get to 50 and think well nobody's treating me properly anymore what are some of the challenges if they decide to come out and work for themselves?

Robert Vlach: Well, after boring everybody with the definitions, let's move on to a bit more subject as well. A bit more boring subject as well. You know, I'm. I'm generally not a fan of generalizations in freelancing. I think that one of the most common problems I see in the public discourse relating to this subject Is that people who give recommendations, they usually have this observation bias that they observe their own industry, the rules of the game and of the freelancing in their own field.

And they sort of extrapolate these rules to freelancing as a, as a whole. And I believe that this is a huge problem in the discourse because, look, there are hundreds of industries, hundreds, literally hundreds, and industries you may work in. And in many of these industries, there are dozens, if not hundreds of professions.

Many of these industries have quite different and distinct way of looking at running the independent business. The same applies to individual professions sometimes. So it's really very hard and in my opinion, quite problematic to transpose know, and where the area of those,

knowledge or know how relevant and highly workable for say a craftsman who is repairing old watch to somebody who's working in a digital marketing. I've met, for example, also freelancers who work in some areas that are not really common or industries that are not really common for freelancers, for example, a friend of mine, he's a freelance geologist. So he's working all around the world. He's looking for fields that may be explored for gas or other resources. And I can guarantee you that his. way of doing business is completely different from any industry I've seen. So I'm very hesitant about making any general statements about what are the typical ways, how to start it.

First of all, in my mind's view, the individual standing in their own field with their own intelligence, that's the central idea. I always see because I'm also working as a consultant, as you are, I never approach any subject or any problem from these broader categories, how freelancers should generally do this or that. I'm always interested firstly and foremostly, who that person is, what is their profession, original profession, what are the industry. And this is the starting point. If I don't understand the industry, first of all, it would be very hard for me to go there and sort of arrogantly or self assuredly, tell the person how they should run their freelance business.

It wouldn't work. So my first goal, actually, if I run into any sort of new profession or a new industry, my first goal is actually to align with the person and to understand what is different about this person, their industry, their profession that sets it apart from everybody else and everybody on a usual finance market. That would be my first idea, from this idea, there is a very important second concept, I would say. It's beautifully covered by Steven Pressfield. He wrote an article once, which was, I believe, for his Writing Wednesday series, which is a sort of continuation of his famous book called War of Art, his article titled, ' The Number One Amateur Mistake', and there is a beautiful story that I love because it conveys, precisely what I want to say here in this answer, that, uh, he had a friend who was sort of working with Bob Dylan and that friend told him a beautiful little story, known among some people, musicians, whatever, where Bob Dylan lives. So musicians who were amateurs, who were ambitious, upcoming musicians, they were coming to his house and they were taping their demo tapes to his gates.

Sort of, here's my music, listen to it, perhaps we can work together, whatever. And the point of the story was that, basically what the security did every day was taking all these tapes and putting them into trash. Because Bob Dylan couldn't risk, listening to any of these tapes, actually picking up some melody or some musical idea, then use it subconsciously in some of his recordings, and then be sued that he used this or that guys, this or that bands, musical, musical team.

And the conclusion made by Steven is, is really ingenious, is that the amateurs, their problem is that they're not really serious about working in the industry. So they are excited. They have this notion that they would give it everything in terms of excitement and energy while ignoring the rules of their very own industry.

And this, I would say, if I would go in a little bit of generalization here would be my first advice, just don't be that eager amateur, just dive deeper into resources about freelancing in your industry, in your profession, which may mean, listening to podcasts, reading books, reading articles, but even better talking to real world professionals, like colleagues who are freelancing in this field for at least 5, 10, 15 or more years.

And get their perspective. They may not be right in everything. Each of one would probably present you with their own highly idiosyncratic opinions and insights, you may also find really interesting contradictions, between several personas, but what is relevant is these people, not just any general freelancers or general influencers telling you how to get to your first million and how to run into six figures within two years. Because most of this, honestly, is not really workable universally. This is always, in my opinion, highly limited and low level insight into how the market works. Markets is extremely complex environment, so my first and foremost recommendation would be treat the market seriously, don't go into oversimplifications, first of all, and I believe the market will also help you, because I believe that because even for the beginning freelancer, the contact, the direct contact with a real free market is like, is a supercharged education.

Each communication, each client, each assignment would be like a sort of like a mini high school. There's so much depth and knowledge to learn from once you actually enter the real thing. Once you actually start doing things, not only dreaming about them. So that would be my first recommendation.

I know it's complex, but let me just summarize it a little bit. Don't get too involved in general ideas about freelancing. You may read or study something general. But then, reading a book or listening to a couple of podcasts or listening to a couple of talks, whatever, but then try to learn the rules of freelancing with your own industry and profession.

That would be my first and foremost recommendation. And the second probably would be slightly similar. I believe that um, there are mainly two parts of freelancing. One is the expertise. That's something we sell and we promise to the client that, I don't know, copywriter, graphic designer, business consultant.

So it's something I publicly declared that I have it and I should have it to a certain extent, right? I also usually attach some extra information to it. So for example, by setting a price. I send the information, how junior or senior I am in the profession. So I'm not only saying I can do something, but I'm also trying to, to communicate what's my level of certainty and, and understanding of the whole field.

So in general, I believe that freelancers have no issues about studying their expertise because we all love our professions. We love our professions. We love what we do generally, but it's very common. We neglect the entrepreneurial side of things. So it's quite common actually.

I hire a lot of freelancers as a consultant for my clients. It's quite common that you hire somebody who has the expertise, but who is totally lame as a business person. So they don't deliver on time. They promise something then it's different, they are too cheap. So there are always overhelmed with work because they have to hustle all the time.

So they have all these neglected parts of what they do and it creates a setup where they are not behaving in the professional way. And the client sort of re evaluates what this or that person role in the project should be in general. I know it's, it's too lengthy, but that's truly how I see it.

Let's take in at first that freelancing is really diverse, and each area works slightly differently. It's really complex market environment. That would be my first message there.

Nigel Rawlins: That's a good one. So you're saying that really they need to specialise in their profession and be very professional. But you also mentioned that sometimes they neglect the entrepreneurial things that they need to know. For example, pricing enough so that you don't get overwhelmed and can't deliver.

Because that's the first thing is, if you get a project, you've got to be able to do it. And if you can't deliver it, you're not going to get paid. So should we talk a little bit about pricing? Cause, I think one of the points you make is the majority of people under price.

Robert Vlach: Well, I think there we can say some general or, or explore some general principles because these relates to market forces, that work in a market environment.

There is a couple of my favorite themes there. So we can explore each of them, if you like, first of all for longterm pricing, it's really hard for most freelancers to find out what's the right price that they should charge. This has many reasons.

First of all if you overcharge your clients, you would soon find out because the deals won't happen, people will not be satisfied with your work. They would complain or they would back out of pre negotiated arrangements on the last minute, whatever. You would have a lot of signals that you charge too high. But if you ask a price that is too low, you wouldn't get many negative or red flag signals, because everybody would be pretty eager to order more.

If they see that you provide a great value for the money, they would give you recommendations, they would praise you. And you wouldn't know if that person would be willing to pay you a double or triple for that amount of work you are doing. You wouldn't know. As a client, I usually don't tell my supplier that they are too cheap.

I'm happily buying at the low price and I'm not even aggressive in this regard. I'm just a regular guy, like when I see something that is good value for money, I buy all of it. I only do it with some long term suppliers where I see they are so low and so cheap that they are nearing to burnout.

Then that's the usual exception that I do as a customer. Then say to the guy, hey, look, I see that you are working 16 hours a day. And look, you are really asking too low price. I would be paying a bit more. And I want you to stay on this. I don't want you to burn out in a half a year or so.

So think about it. Think about your pricing. I'm the first one willing to pay you extra if you decide to ask for it. I do it rarely because I usually work with people who have a sort of better pricing, but in some rare cases, for example, people who are tradesmen, doing some repairs, whatever, it's quite common that they have really good pricing.

So, how would you find out that you should, ask higher price and what that higher price should be? It's like, no one would tell you, the clients won't tell you, the best way, of course, is if you are senior enough and you have a great collaboration with the client that you actually see in client's numbers, how great a value you are creating.

That's the best option because if you are, for example, a strategic consultant in marketing, you create a couple of new campaigns and you see that you basically double the revenues of the company within a year, it's a no brainer, right? Like you obviously see that there is a huge space for your improved pricing.

And you may pretty confidently go into the next round of negotiations for the next phase of the project or whatever way you choose, because you have so many options, right? You may offer a different service, you may raise your rate, you may negotiate a special deal, you may have some sort of success fee, it's really a free market, right?

So once you have the precise information about what is the estimated value you are creating for your clients. That's the greatest information you may get for your improved pricing. But rarely freelancers have this information. This is only information available to more senior strategic consultants, marketers, that sort of professional service work.

If you don't have this option, then you actually have to go the other way around, which is relevant to most beginners. You only find out by raising your price bit by bit and by experimenting and by touching your price and playing with your pricing as often as possible. Well, the claim goes that if you actually don't touch your price for years, which many freelancers do, they just set their price, then they keep it for years until they are forced to change it. In this situation, you won't know what's your real pricing power.

The pricing power meaning that you may raise your price without actually losing your clients to the competition. And the obvious counter argument to this is that, of course I know how much can I charge because I see how many my colleagues are charging.

I talk to these colleagues all the time and they charge this for this kind of professional work, right? So that would be like the general counter argument against it. But my second argument is that in most cases, this is not valid, and it is because, and I can perfectly describe this from the perspective of somebody who is hiring, who is, paying these freelancers.

There are not two equal freelancers on the market. Never. If you actually work with somebody, there are highly idiosyncratic elements to your collaboration. Some people may have basically roughly the same level of expertise. Which is what goes to this previous counter argument, same level of expertise. It should be the same price more or less, right?

But it doesn't have to be that way because some people are highly productive, for example. So they do in the same amount of paid time, double or triple that work. Some have some extra skills, some extra added strategic layer or some extra expertise in a nearby industries or nearby professions that sort of add value to the client.

Some may be extremely likable, we work with, that they have really great charisma that sort of create around the persona, they work on it. It's usually not something completely natural. It's, it's, uh, I would say it's a sort of like a crafted a professional approach that you sort of suppress things that are not that likable in your character or in your dealing with people and you learn better.

And over years and years of fine tuning this approach, you sort of become a person who is much, much more pleasant to deal with. And for this, many clients pay quite a high premium. So, you may actually never know about your colleagues, are they really that pleasant to work with? Are they really that quick as you are?

Do they really have that complete checklist for the work so that they never miss any detail and they always deliver 100%? Of course you can't. So even if you have one data point known, like what's their price and what's their general level of expertise, there are a couple of dozen data points that you are not sure about or you don't know them completely, but they are known to the client and the client just puts it all together when evaluating this or that person and they do a sort of internal or in some cases a more precise calculation, how much they would be willing to pay for this or that person with all their individual characteristics that are present in their relationship over the long term.

So what I actually see in the real time situations is that for some people with roughly the same amount of expertise, but with a much higher reliability, with much higher level of likability, we are willing to pay a lot more. And this is not something we tell in the negotiations. This is only something we know as people who hire, who pay, and we do our internal discussions.

So actually that goes way back to my first original argument that unless you work with your price, with your individual characteristics, in relation to your real life clients, you would never know what's your real pricing power. If you don't touch your price, you may be cutting your possibilities in half or even less.

And you won't even know about it. So the first rule would be to play with your price and be way more active than freelancers usually are. It's difficult. I know because, as freelancers, and that would be my second point, and we can leave it at that, when we are entering the, the freelance. business, we face a lot of uncertainty. We know that it's not sure that we will find these clients. It's not sure that we will find the good ones. It's not sure that we will be booked enough and so on. And I believe that if we are not really well off financially when starting freelancing, having huge reserves and honestly, who has them when going freelance, like very few people do, we sort of subconsciously seek stability.

So once we reach the first stable set up in our freelancing, when we have pretty nice clients for a good price, we like the work of sorts. There are always things that can be improved. Why not? Well, there's always something to work on, but in some cases, we tend to stay on this plateau for years because we see it as a sort of safe and stable configuration that we may rely on of sorts. And we don't want to risk this situation by challenging our clients for going higher on the price or being more ambitious in shaping the deals we are doing with them.

There is I believe a psychological barrier in freelancing that we don't want to disrupt the current client relationships that we see as a basis for our financial and psychological stability. So it's actually very useful to find your own safe ways how to challenge this plateau to the status quo, and find a way how to upsell, how to, how to up your game in your way that you've see as safe. And there is always a way how to do that. I mean I would have to see the precise configuration of everything in there, to say what's the best way, but there are a couple of solid strategies how to do that.

For example, just to, just not to be too broad and generic. If you have 10 clients, and one of them is the worst one for you. I mean, like paying low or problematic in a way. How about trying to upsell this one first? And if you lose him or her, you wouldn't mind, you would have a empty slot for somebody, up there. So that would be an option.

One option cut the the worst branch of your business, or challenge it. Open the negotiation with the client, play the open card, say, look, I think we can do better. So let's talk about our future collaboration, future relationship. I can imagine going up with this game for a different price, doing something slightly different. Are you up to it or not? So let's discuss it. And this way you may sort of find out that for many clients it's not as unpleasant as you may imagine, having these conversations. And I always say, somebody has to root for your side of the deal. The client won't do it. Especially in the long term client relationships that tend to stagnate on a certain price, on a certain plateau. These are especially the relationships that needs to be renegotiated or at least re evaluated regularly. So that would be my general on pricing, but of course we can dive into, subtopics here. It's such a broad. theme.

Nigel Rawlins: I think that's excellent. I had a graphic designer doing some beautiful work for the promotion of the podcast. And because she was charging hourly and she was so efficient, I was getting a bill for 2. 50 American. I said, no,

Robert Vlach: I read that. I read that. It's somebody from a different part of the world, right? Yeah.

Nigel Rawlins: Well, it's just too cheap. So I said, look, if it takes you five minutes, you charge me a minimum of 10 US. And she was so happy. But I've been the same like that. I've got clients who've been with me for 15 years, and I only crept my prices up last year. And no worries for most of them. One pushed back a little bit. But, quite happily continued to pay. But it really depends on the type client.

Robert Vlach: Yeah. Yeah, exactly. And, this is actually something I see very often because a big part of my consulting work is actually in pricing. So quite often we discuss how to raise prices to what level, whether to change the pricing scheme or the method. And actually, quite common trait among freelancers who are actually afraid of raising prices is that they fear the reaction from the clients, many of whom have been expecting it for years.

And then they say look, I'm completely okay with that. I sort of expected it, a couple of years ago, but here you go. No worries. You're happy with your work. Let's go on. This is not really a problem. And also, alternations to the strategy. If you, for example, work, with new clients all the time, because for example, you may be a wedding photographer, right?

You don't have a regular clients probably, or you may be a speaker in a certain area and you usually give talks to many different institutions or many different events. So the different strategy there would be that you don't play with the pricing with the regular clients and raising your price over long term with them but you sort of try to validate higher and higher price.

By validating, I mean that you ask substantially more the next time, if it goes through, you try again. If it goes through, you try some more. And if it goes, I don't know, in 7 cases out of 10 or 5 cases out of 10, you may consider this price to be validated because there is always somebody who wants to have it cheaper or was not informed of your price in advance, whatever, but this work of trial and error, of trying the higher and higher level and then, actually seeing what's the real conversion rate, if it's just 1 in 10 cases, that's a hardly validated price.

That's probably price that is edging on the maximum most clients would be willing to to pay for, for this kind of work. Which may also be okay if you are financially secured. So if you are really well off financially, having strong reserve, you may be waiting for that 1 in 10 or 1 in 20 clients actually, right?

So it also depends to other areas of freelance business and in general and I think this is hardly, if ever said about freelance pricing, actually, the amount of your financial reserves completely changes the game, because you don't have any reserves, you are basically afraid that you won't be able to cover your bills. That creates very weak negotiating position. And if you are up and against, any at least little bit experienced negotiator, you can be sure that it will be obvious to them, from little things they can read people pretty well usually. So you won't be able to, first of all, turn down bad work because you would be happy for any work at all. If you need to pay your mortgage or your bills, whatever. So you would be forced to take clients that you know are not good clients.

But you know that it's obvious that they don't treat you fairly, that they don't behave professionally, but since you don't have no other option, you take them, right? But also, you have this weak negotiating position, and this will also poison your business dealing with solid people, with people who are generally good, but they see that business they see that they don't have to overpay you are so willing to give a discount dealing with solid people, with people who are generally good so actually, I believe that if we talk about pricing, we should mention how super important is for freelancers to have as large financial reserve as possible because this is our first level of protection against bad deals. If I have a strong enough reserve and I see anything odd in a new starting relationship, I may back off that client or that deal.

I have a bad feeling about it. I may discuss it with, I don't know, my partner, my spouse, with myself in my notes, but I will make the decision, like many freelancers actually claim that they use their intuitive assessment of the client to decide whether to turn down the work or do it. So quite often we have some life experience, some work experience, and we see these red flags, right? Like it's, it's quite often, it's quite obvious, not every time, and that is why I'm also a strong supporter of more systematic approach to do a background check, especially if it's something like long term or more serious work, some large amount of money or responsibility, whatever, you may do extra work there.

It's recommended, definitely, but most freelancers, they don't do it. They just use their experience in the field, their social skills to recognize people that are not good clients from their opinion. And they recommend them to go somewhere else. They are polite and everything.

They may be super friendly, but they know that they don't want to work with this person. It goes the other way around as well. If you are actually dealing with clients or with prospects as a freelancer, you are hardly if ever told the real reasons why you didn't get the work. It's not common in daily human interactions to tell somebody the hard truth, why they were not picked, selected, whatever. They would invent some polite lie, whatever, or they just ghost you.

It's also quite common. So financial reserve, very important things in regards to pricing. If you have a larger one, especially if you have a financial reserve for years, that would create a setup where you can get really ambitious in your pricing because then you sort of reevaluate who you are, what's your net worth. What's the value of your time? You don't have to do this, if it's badly paid, or if they treat you unfairly and you sort of have a much stronger position.

If a client comes to you, it's a new client and say like, look, I would really like to get a discount. And you say, well, I have work lined up for the next half an year, and I really don't do discounts, sorry. You don't have to say forcefully, but it would be so obvious, that you are in a position that you are not even willing to negotiate about it. So that's what I mean that it would sort of seep in into your daily behavior in your business dealings, that you wouldn't know a thing about real negotiations, professional negotiations. It would still strengthen your negotiating position immensely, even without learning a single book about the subject. So, I believe that for common freelancers, this is super, super important. Not all of us are, you know, efficient negotiators, but all of us can save and build a sort of solid reserve. And that would give us a really strong position on the market.

Nigel Rawlins: That's totally realistic. Well, one of the other things, I guess, is because I work with older professionals, is there a use by date for older professionals who are independent and working? Are they too old?

Robert Vlach: This is a joke, right?

Nigel Rawlins: Yes.

Robert Vlach: I have already mentioned Steven Pressfield. Stephen Pressfield has been working with a literary agent, his name was Sterling Lord and he was working as a literary agent until he was 99. So he sold rights to Jack Kerouac's, On the Road in 1940s and he was still working in 2000s. So actually, I don't think that there is any artificial boundary freelancers or independent professionals shouldn't cross, and I wouldn't even say that Sterling Lord is a unique exception.

Even in our community, for example, in the Czech Republic, we support quarter million freelancers. Some of them are our members, so they are presented our directories. Many of them I meet on events. And I quite often talk to people who are like, 80 plus, almost 90. They do some knowledge work, for example, translation. They are specialized in a certain area of, I don't know, like technical German, for example, we had a member who was a technical translator from German to to Czech and last time I spoke to him, he was just translating some dictionary about boats. These people, of course, they usually don't have that same amount of energy as they had when they were in their forties or thirties or twenties, but they have different things.

They have reputation as Sterling Lord surely had, they had experience, they had, the clientele that is working with them long term and there is like mutual trust. There are famous quotes by Warren Buffett and Charlie Munger about sticking to people you can actually trust and how beneficiary it is for any business.

It may be a freelance business or a large corporate business they deal in. But if you actually know somebody for 50 years, as a totally reliable, top professional person, is it likely that they would change in the next five years, their characteristics? Of course, they may get sick, they may get mentally Influenced by a disease, some sort of illness, but that's a different thing, right?

That's a different case, but it's not likely that if you work with somebody for 20 or 30 years and you know that person as a reliable, diligent professional that that person would suddenly you know, lose all their business and professional relationships or their abilities. Not likely.

And, with all the Western societies, we actually see this health span being extended by better treatment, healthier diets, more stronger focus on exercise. The public gets way more educated on these things. You may have read Lifespan by David Sinclair. That's a seminal book on the subject. There is also a new one by Peter Attia, Outlive. So there are outstanding best selling books on how to preserve your health, long term. There's also a fantastic book by Max Lugavere about brain health, long term brain health, called Genius Foods. It's not only about foods, trust me. It's a fantastic book about preserving your brain health for a lifetime, basically.

And so there is a growing public education on these subjects. And, what I see by being immersed in the freelance industry and the freelance economy is that freelancers are actually the most interested part of the population in healthy lifestyles. Because we see the direct relationship between our health and ability to go on with our work , go on with earning money, go on with doing something meaningful. So, we usually don't have a strong support if we got ill. Most governments don't pay freelancers having the flu and staying a couple of days at home. This is not really common. So we know that being in top shape doesn't not only mean improved ability to earn longterm, but it also means small things, that your performance, your daily performance get better.

So, you may have lesser brain fog, you may have stronger focus, improved memory, and so on. So, the health is not only about staying healthy, it's also about moving yourself along the gradient of actually feeling better, having optimal performance and so on. So in general responding to your question, I believe that freelancing is actually a singular career path to doing the work you love for long term, well beyond the regular retirement age.

I know so many examples of people who are doing this. They do it, of course, at their own pace because many of them, they have some grandchildren, whatever. So they also want to enjoy life. You don't want to be working up to your 100 and then die, right? So, you sort of change priorities as as you grow older, but you know work gives meaning.

And, there are also writers and researchers in Japan, stressing the importance of work for retirement. Actually like going retired and doing nothing is not the healthiest way you can go into retirement. Because most lose the social relationships in the work environment. In some cases, they may lose the meaning of employing their skills for the benefit of the society, of the markets or the local community, whatever, depends on the business you've been doing. Even if I look into our own family, like my spouse, she has a granddad. He's over 80, uh, not in a super strong health, but he's an independent consultant in a heavy industry and he's still working.

He's having a call every day. He's going to factories, he's going to negotiations, and he may be in any shape, but he's still preserving this part of his life as a meaningful thing that he wants to go on no matter what is his current condition. That is something I see all the time. Freelancers are pretty tough in preserving the ability to work because they see such a huge meaning in it.

And by the way, I love your focus, that you focus on these people, you know, supporting them, like if they are 50 plus, 50 is the new 40, right? So that's what I mean, the health span is really moving forward incredibly. So I love what you do. I think it's very important because this is not about supporting people to work some 10 plus extra years. It may be, 30 or 40 extra years of work. And that's why I find it so important what you do.

These people they're facing ageism on a regular job market, right? Like when they are hired or not hired by companies, but this is not relevant to the freelance economy and freelance markets because the people may work for all the clients as well, of course and there is also a high probability that these similar age cohorts will share the same values.

They will understand each other very well, and actually there is a research, I think it was done by MBO or McKinsey. I'm not, I'm not sure at the moment. It's in my talk, European freelancers and where to find them. That if you actually look at full time independents, in America, in terms of age cohorts, the older you get, the more you earn,

So you don't stop, you know, at a certain age and then you go down because you are not as valued by the market. Actually with freelancers, if you get older, you generally earn more. There are data to support it. So I see basically no reason why people shouldn't work longer as freelancers. They have perfect conditions for it, for that in, in free societies, of course. I don't know anything about China, countries like that.

Let me ask you a question, does it correlate with your experience

Nigel Rawlins: It's actually interesting because the, 60 year olds are working with each other. The clients I'm working with at the moment are 60 plus and they've worked with other freelancers or self employed people who are that age as well. So I never thought about that.

That they're more comfortable with that age rather than working with somebody younger. And unless of course we need that technical expert, but we, we bring them in. That's what I do. So for example, one of my clients at the moment is doing a range of things. I can't necessarily do it, but I can find somebody and bring them in as long as they charge me enough because I won't let overseas freelancers that I use under charge because I think it's unfair.

I don't want to be charged $10 US. I want to be charged a bit more than that because it's fair to them. I want them to have a good life. So I can actually find some really well priced people and bring them into the team to work on a particular project. And that helps my clients. That longevity thing is really important.

We are living longer. I know that's one thing that's been critical for me, I'm about to turn 68. I just took up Krav Maga the other day. So, fitness, that, that knocks me around a bit, but I've been a runner since I was about 23 and I noticed you're wearing an Oura ring, is it?

Robert Vlach: Yeah, sure.

Nigel Rawlins: So you're keeping an eye on your sleep and everything?

Robert Vlach: So yeah, I keep these records, but I'm not as strict about it. I just like to experiment with that a lot. But in general I'm more influenced by these books about lifestyle changes. Genius Foods is a great book that really changed my way of thinking a lot.

And I'm also, influenced by other books in this field, but in general, I read a lot of popular science. But I just wanted to point out some interesting insight, perhaps. I quite often see that freelancers work for clients who are in the similar age cohort, probably given that you are more likely to understand these people in a way. I also have a couple of clients who are more or less the same age, they have really young kids as we have, four year old and nine year old. So we have a certain kind of problems and challenges you have to deal with as entrepreneur. Having to take care of a young family.

So they may be also turning to me for sort of guidance, not about parenting, but about how to navigate their business in this part of their life. And, I believe this is also given to, uh, high specificity of I the freelance work. That we as freelancers, and this is also not often realized, especially by beginners who are more influenced by corporate approach to business or a company approach to business, that we as freelancers actually have a very limited capacity for work.

So at the beginning, everybody is thinking, well, where will I get these clients? But then actually, once you are at least a little bit established, you sort of start, you know, thinking, well, how will I turn down this work that is, you know, going my way?

I will have to sort of pick who to work for because I have this limited capacity. Not everybody wants to expand and hire other people and has a team or like a small company. So, we have a very limited work capacity that we can work. We may, of course enlarge our production capacity by being more productive or have checklist or being more specialized or using experience and extra insight we gain across the way so that we can tackle the problems a bit faster, perhaps, or better.

But in general, in the end, if we are established and if we are well off as freelancers, we sort of pick our clients, And that leads to a situation where you suddenly find yourself working with people that you really like, that you picked by carefully tweaking your negotiations, your pricing, everything as you present yourself. There are so many marketing issues around freelancing.

I would just name one extra thing perhaps I just remembered. it's a quote from, Jan Tittman, I quoted him in my book, who said like very interesting thing, he's a photographer and a graphic designer and he said, look, if I put my picture on my website, the clients I work with are more sympathetic to me. There is something in the people who approach you once they see you, because every picture, every photo portrait is a sort of self, stylized, image of yourself. That's how you want others to see you, right? And that means that you create a sort of perception that influences who will actually approach you.

So if you go full suit on your picture, likely you will be approached by people who are okay with this sort of dress code, right? Like this is just a silly example, but you know what I mean, right? So there are so many, there are a thousand small things.

How we communicate, how we present ourselves, how we, how we actually go around our business that sort of distills our final clientele, the people we work with.

So, it's no wonder that I work mostly with my age cohorts and you probably work with yours, because we are limited in our capacity and it's quite likely that we will pick the clients that are most relevant to us. So I, I don't know, it's just an episodic example. I would like to see a research, looking into that.

I don't know of any survey that would actually look into this particular detail of freelancing, but I would be definitely, excited to, uh, to see such a research. Because it reflects my experience working as a freelancer and working with freelancers.

The affinity with our clients is not a random thing.

It's not a random guy or random woman going into your shop, it's a sort of process that is a funnel that leads through several levels to somebody you really want to work with. If it's set up in the right way.

Nigel Rawlins: This is about, I think, being human in many ways. Well, at this point, we've probably taken up a lot of your time and it's late there at night, but you're going out to have a glass of wine, which sounds wonderful.

Robert Vlach: A Valentine's Day, I go with Lenka on a beach trip, yeah.

Nigel Rawlins: Oh, that sounds lovely. We had it yesterday and I forgot completely about it, but that's probably what happens when you get a bit older. So how would you like people to find you or connect with you, Robert?

Robert Vlach: Well, as I said, we are having this project Freelancing. eu, where we are starting to organize pan European meetups. So, year there will be a meet up in Barcelona, Madrid, London, probably some other places as well. Probably Brussels, I still need to confirm the dates, but people can actually come from other parts of the world to, join us.

It would be a nice opportunity to discuss freelancing from different perspectives. So freelancing. eu, there's a newsletter. People can sign up and get our monthly report. I usually also write a monthly essay in issue, so I try to cover some aspects of freelancing. It's just like subscribe bonus, but I like writing and it keeps me connected to the theme, like thinking about what I'm going to write next.

And of course there's the website freelanceway.eu where people can find my book. It's available worldwide. It was published by HarperCollins. So that's probably the most comprehensive summary of my work and my views on the freelance market. As we speak here in an interview, I always have this feeling that I'm omitting things because it's so complex and I may always mention only this or that thing and so I would refer people to the book, not because I want to sell it to them, but because I know that I missed so many important things in this interview.

Conversation is beautiful way of putting things because you may put emotions in everything. But intellectually, I know that I'm better in my writing, especially since I'm not a native English speaker. So, English is not my nature. It's like, I, I need to then think of ways how to express myself.

So, the HarperCollins edition of The Freelance Way would probably be the best way to stay in touch with me because I think that once people read it, it's, and see how complex the subject actually is, I think we will stay connected over long term. That's my experience with the readers.

Nigel Rawlins: I thought it was an excellent book. I've worked for many years, and I, I found things in there that I thought were excellent. And I think you put things very, very clearly. So, yes, I would suggest to anyone considering this, that they get that book, on the Kindle or buy the hardback, and have a good read. And they can also probably find you on LinkedIn.

Robert Vlach: Yeah, of course. I'm very open to communicate with the readers and actually writing the book was very significant for me in going into the international environment. So giving talks, being connected to people like you, I'm, I'm very fond of this conversation. Actually. I think that, the best way we learn as freelancers is that when we communicate and discuss the various aspects of our business in free flowing conversations like this one, as you have seen, I'm definitely not a great fan of too broad and too generalized, mental models of freelancers.

I'm more into these individual stories and perhaps some best practices that I describe in my book. But it's always with the caveats, with the exceptions. There's so many exceptions to each of these rules, that I find it really hard and challenging to write about a subject that that's probably what made me tick that I found the subject to be extremely hard to cover because it's not a, you know, simple, straightforward, do this, do that. And in 10 years, you're like a dollar millionaire or whatever. It doesn't work that way. And that's also what I like about these discussions. That if they are honest and open and are looking for the truth, we always find out that the truth is really complex. It's not trivial.

That's what I love about being entrepreneur. That there is nobody, nobody in the world who actually understands the market as a whole. Not a single individual. Like each of us have a completely unique perspective on our perspective markets. And it's also our, upside, right? It's, it's something, we have something unique in our perspective, unique experience, unique insight into nearby markets, and this is what I found in being an entrepreneur, so exciting that it's so challenging that it's not as driven by universal nature laws like science, for example, it's very hard to reach definitive conclusions. It's a game with so many unknowns and so many variables that even if you would have the best artificial intelligence probably, or the best computer, you would never compute it completely, right?

Because there would be other actors, you know, behaving in unexpected ways. So that's what I like about the free market. That it's part of the free society and free actors like you and me, you know, talking to each other in a friendly and collaborative ways. That's what I love about freelancing, that it's so full, the field is so full of people who are willing to share, who are completely open about sharing what they've learned.

It's not as competitive as the corporate or company environment, because as I said, we may have only a limited capacity and we need each other to do some bigger things. So I think that's why as freelancers we share some common values. And the second is that we have this large affinity to, I would say, like personal independence and freedom. And that would also makes us, you know, more likely to understand each other in a, in a very deep ways.

Nigel Rawlins: Thank you. Thank you for joining me in this conversation. It's been wonderful.

Robert Vlach: Awesome. It has been a pleasure, absolute pleasure, and let's stay in touch. I think you are a great host, so keep it coming, keep it growing, and I'll be looking forward to our future conversations.