It has always been important for freelancers and small businesses to monitor there own business processes but this becomes increasingly critical during the tough times many of us are facing in the current economic downturn.

One of the more crucial business processes that should qualify for some scrutiny is the way in which new clients are found and new business is secured.

Winning new business

As potential clients look to tighten their own belts they will often reduce their budgets across the board - and certain projects, such as web based work, are easily seen as surplus to requirements and become the first lambs to the budgeting slaughter.

So what can a freelancer do to improve their chances of winning new business during tougher economical times?

Certainly a good looking portfolio is a must, as well as the willingness to be flexible about the type of work you are prepared to do (and how much you are willing to charge for it).

But what about winning new business? How can a freelancer improve their chance of meeting new clients and securing new work? One answer is to use freelance auction websites.

Freelance auction websites

The basic concept behind a freelancing auction website is that individuals or companies requiring freelance work done can post a project description on the website and then freelancers can enter their proposals along with a covering letter and project fee.

It is important to note that the cheapest bid will not always be the “winning” bid. Instead the prospective employer can choose one (or more) of the candidates who have placed a bid to undertake the work.

Not only do these auction-style websites serve as a highly accessible platform to bring employers and freelancers together, but since many have their own payment systems in place they offer a degree of protection to both the freelancer and the employer.

Freelancing websites in the UK

There are two auction websites that cater for freelance work in the UK that particularly stand out; freelancer.co.uk and peopleperhour.com.

Freelancer.co.uk offers a very simple interface with very few limitations to the freelancer. You can register a basic account for free which will give you access to all the major components of the website. You can create your own on-line portfolio, upload a CV and even have access to the live chat feature of the site.

Projects out to tender are very easy to browse and equally easy to bid on. They have their own Escrow payment system available, although you are not forced to use this to bill clients you may win through the website. Payments settled outside of this system will not qualify for client feedback; although from my experience a lack of feedback has never been a deal-breaker.

Certain projects will be restricted to bids from freelancers with a “PRO” account, and basic project are limited to 20 bids from freelancers with a free account so it is worth checking every day. Alternatively you can upgrade to a PRO account for £40/year.

Peopleperhour.com is a more complicated website to navigate but there are far more jobs available to bid on. There are also more freelancers, so the bidding process is more competitive. Basic accounts are free or you can upgrade to a “Gold” or “Platinum” level for £7.95/month or £14.95/month respectively.

Bids are restricted in a number of ways.  Depending on your account status you are limited to a certain number of bids per month and a certain number of categories in which you can bid. The amount of commissions that they will charge also changes according to the type of account you hold.

The other main restriction comes when setting your fee for a particular project. A basic account must place a minimum bid of £150, and you are also required to ask for a deposit of at least 20%. You will be able to state any alternative payment terms in your bid description however.

Which freelancing auction site is best?

This really depends upon your own position. If you are looking to use a freelance auction site as your main channel to win new business then I would recommend peopleperhour.com due to the potentially huge audience of clients you can appeal to, but if you are after a simple system that might provide a bit of extra work then freelancer.co.uk is a better option in my opinion.

There are alternatives out there, and new freelancing websites are springing up all the time – so keep looking!