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If you run a service-based business and you’re trying to move into the digital product space, you know how hard it can be to balance your client work with everything else you want to do.
That’s why on this episode of the Rebel Boss Ladies Podcast we’re talking about day rates and how to get started with day rates. This can be a great strategy to still make money through client work, but save yourself some time that you can use to build other aspects of your business!
This is a little bit different than our usual topics – we are not talking about a product launch strategy. However, for those of you still working for clients, day rates are a super cool way to make money that will hopefully pave the way for you to establish your digital product business.
Joining us today is Sarah Masci, who has become a leader in the online industry for high quality, yet simple digital design.
After years of running a traditional design business, Sarah perfected a highly efficient formula for infusing high-level conversion strategy and customized style into a one-day design project. Out of this discovery, her signature Day Rate Mastery Framework was born.
Sarah now teaches her exact day rate framework to other designers and done-for-you service providers. And guess what? Today she's teaching it to you! Let’s dive in.
How Sarah Got Started With Day Rates and how YOU Can Get Started With Day Rates, too
Sarah has been working in the online industry for over 16 years now, doing a variety of things. She said that she started working online after her son was born and she wanted to get out of her corporate job and work from home.
Around 2010, Sarah started working in the branding and design space and she’s basically been doing that ever since. For years, she worked for clients doing design projects, retainer projects and longer-term work.
About three years ago, she decided that she had had enough of client work. It was taking up too much of her time, she was frustrated with all of the back and forth, and she was spending all of her energy on her clients’ needs instead of focusing on her own business and projects.
Now, Sarah has switched over exclusively to a day rate business model. She says since she switched to day rates, her life and business completely changed. They’ve given her the freedom to make an income from clients while also spending time focused on her own work without feeling burned out and overwhelmed with everything on her plate.
Now, she teaches other creative service providers – including designers, copywriters, marketers and more – how to do exactly what she did.
What Is a Day Rate, and How do Day Rates Work for Service-Based Businesses?
For a service-based business, a day rate essentially compresses all of the work that you would normally do for a client that’s spread out over weeks, months, or in some cases years, into just one day.
The client pays a premium price for that day, because they're getting a lot of benefits for the day. They’re paying for the convenience of a fast turnaround, getting your undivided attention, and getting their results quickly.
Premium Pricing for a Day Rate Model
A common misconception about day rates is that it’s just your hourly rate times however many hours a full day is. So if you’re charging $50 an hour and working an 8 hour day, that would mean your day rate is about $400, right?
Wrong. You’re not just charging your regular hourly rate as a day rate. Instead, what you want to do is add more, because the client is getting a lot more value from the convenience and the premium priority service that comes with a day rate. Just like you can pay extra for TSA PreCheck or the Disney FastPass, you pay a premium for VIP service.
Sarah’s first day rate was $750, and now her day rate is $3000. She slowly built up this amount over time, and she said it took her a while to mentally wrap her head around that kind of pricing.
She recommends staring at a rate that feels comfortable for you, but then incrementally increasing that price. This will help you stay consistently booked out and always have a pipeline of clients.
It does take some mental work to become comfortable with charging a higher rate for your services. If it takes a while for you to work up to a higher rate, that’s okay! But Sarah says to remind yourself that even though it feels scary, you’re probably undercharging. If you’re providing a high value service, your customers will still keep coming, even if you’re charging more than you think you should.
The Benefits of Having Day Rates
Sarah says there are a lot of benefits of having day rates.
Even though it may feel better to have more clients, more isn’t always better. Too many clients can lead to scope creep, burn out, and overwhelm. If you feel like you aren’t able to turn off or take a break, then you might be doing too much.
With the day model, Sarah books out in advance what days she wants to work that month and then she can plan around those days.
Whether you want to work two days a week or one day a week, you get to decide how much you want to make. And then you can just decide how many days you’re going to let clients schedule.
When she first started, Sarah was booking about two clients a week, so eight per month. Eventually, as she raised her prices, she lowered the amount of days that she worked per month.
With her $3000 rate, she generally works about four days a month. That’s $12,000 per month of client income, and then she’s able to spend the rest of her time working on her digital products and supporting her students.
At the end of the day, you are absolutely done with that project and you can take off a week if you want to. You don’t have to worry about anybody needing you while you’re gone because there’s none of that ongoing work!
The Best Types of Entrepreneurs and Businesses For Day Rates
Sarah says day rates often work well for done-for-you service providers and creative service providers. The students in her day rate program are designers, copywriters, social media managers, podcast managers, VAs, OBMs, and anybody who's doing setup, implementation or execution work for their clients.
As long as you can compress your work into a block of time a day, then day rates are probably going to work for you.
It can even work for any kind of strategy work or coaches – while it may look different for each of these types of businesses, you can make day rates work for you in a lot of different ways.
Day Rate Models for Digital Product Sellers
If you’re a service provider that wants to sell digital products, learning how to get started with day rates might be the perfect model for you.
Sarah says that the day rate model is the only reason that she was able to actually launch digital courses with the amount of success she’s had so far.
Before starting on day rates, Sarah never had time to develop the product she had always wanted to (a DIY branding course). She used to run five-day branding challenges with her clients just because she loved working with them, but she didn’t have any time in her day to actually create anything to launch.
“Once I started doing day rates, now my schedule had so much white space in it that I was able to plan, create, launch, do all of those things for several digital products. I launched a membership which I turned into a course, and then went on to launch my day rate programs that I have now.”
With day rates, Sarah had so much more time to plan and dream and create. A lot of people were asking her about how she had so much free time while she was still working with clients, and that’s what inspired her to create and launch a digital product, a course about her profitable day rate business model.
How to Transition to a Day Rate Model for Your Business
If you're thinking of getting started with day rates, Sarah says there are a few things you need to consider.
The first is, will this work for your business model? Can you block out six or eight hours of time during the week during normal waking business hours?
Day rates often depend on the feedback and collaboration you’ll need with your clients, so this can be hard if you work at night after your kids go to bed or early in the morning, or if you only have a few hours a day to work.
The times you’ll work may also depend on your business. If you're a designer, you might need to share designs and concepts and get feedback in order to go back and forth collaboratively throughout the day.
However, if you're someone who's setting up a funnel, for example, and what needs to get done is very straightforward, then you could work nights and early mornings and during nap time. As long as you have enough hours within a 24 hour block of time to get your work done, you should be fine.
Sarah says the first thing you should do is test out your service to see how long it takes you. Try out several different day rate offers – you don't have to know right away what exactly you're going to offer.
For example, the first day rate she offered was a punch list, where she completed a bunch of tasks for a client. The next day rate she offered was a brand identity design day. Now, one of her most popular day rates is a simple three to five page website design with very basic branding.
To figure out what worked best for her business, she needed to be flexible, test out various things to see what worked, and see what felt good. She recommends that anyone who wants to switch to day rates try something similar – look for a project you can complete in a compressed amount of time that feels good for both you and your clients.
Setting Up Your Day Rate Business
Once you’re ready to jump in with day rates, Sarah says that it’s okay to start slow. You don’t need to change your whole website or rebrand to start doing day rates.
She encourages taking imperfect action and doing it messy just to keep moving forward. Sarah says she didn’t even really launch her day rate business, instead, after testing it out with a few clients, she decided to just put up a post on Facebook with a few details and received an overwhelming response.
“It was messy. It wasn't on my website at all. It was like a PayPal link to pay for it. And then once they did that, then I vividly remember the first client – she paid for it and then I was like, oh, I guess I need to create something to get going with this.”
You know I love lazy launches here at Rebel Boss and this is no exception. Sarah created a simple Google doc that served as her onboarding questionnaire, and that was all she needed to get started.
Day Rate Results, Not Promised Deliverables
One thing Sarah likes to emphasize with day rates is that you don’t want to promise a set of deliverables to your clients.
There are definitely some variables that are out of your control when it comes to day rates, like if you're doing creative work and the completion of it depends on the client's approval. If you get to the end of the day and the client is still not happy or changes their mind about something, and you’ve promised a deliverable, that means you’re still going to have to come back and work on it past your day.
You can't promise a set of deliverables because before you know it, your work could drag out into multiple days.
Sarah always put that disclaimer out there: you're booking me for a day, not a set of deliverables. She’ll go through your list and get done as much as she can, but if she runs out of time, they’ll have to book her for another day.
Day Rates Aren’t for Everyone, but They Can Change Your Business
Sarah says that if you’re considering switching to a day rate model, just be open to experimentation and be ready for whatever happens.
Know that they’re fun, but they’re exhausting as well. They can lead to a rush of adrenaline, but they’ll also tire you out! You spend the full day high on momentum and then crash.
This is why Sarah doesn’t recommend booking out two day rates in a row, because you’ll need the second day to recover from your intensive first day.
“Once you get them scheduled out there, it's very rewarding, very profitable. The more you do it, it’s kind of like the snowball effect, the more people hear about you and the more you just keep getting booked.
“It's just a great model. If you want to launch a course and you need more freedom in your life and you want to stop working seven days a week, this is an excellent model.”
Learn More From Sarah
If you want to get started with day rates, take Sarah’s free masterclass, the Life Changing Magic of Day Rates.