Working out a pricing strategy can be tough as a freelancer, especially if you’re just starting out. It doesn’t always come easily to experienced freelancers either! This post explores how to price yourself as a freelancer if you’re negotiating with clients or want to set a framework for future projects.
Having that framework in place at the start is crucial. When you first start out it’s really easy to put yourself out there and take on whatever kind of work you can get. However, that can be hard to backtrack on, so it’s better to set some pricing guidelines and boundaries from the outset.
Putting a value on your own work and services is a challenge. For your own peace of mind, and for client consistency, try and research going rates for different projects and services. This will help you figure out your own pricing strategy so you can get started in a clear and professional way.
How to price yourself as a freelancer
It’s not an exact science, but it’s key to figure out a framework that’ll work for your clients but mostly works for you. You should consider how much time a project will take you as well as establish some flat rates for hiring you to solve a particular problem for a client.
Remember, you’re being paid to share your knowledge, skills and expertise. That’s something only you can measure, but rest assured that your particular set of skills is incredibly valuable! While there are different pricing strategies for different types of freelance work, there are some broad approaches to freelancer pricing that you should explore.
Setting hourly rates
A simple starting strategy is to set yourself hourly rates. You could take minimum wage as a baseline, and then add on a reasonable amount for the time and effort you expect to put into the work you’re planning to do. Figure this out at a set hourly rate and don’t be afraid to research what kind of hourly rates are commonplace in your industry. Understanding your hourly rates can be helpful when you’re asked to work on something unconventional, or that requires a bit more flexibility, for example.
However, keep your eye on your efficiency and how much effort you’re actually putting into an hour’s worth of work. Establish a rate you’re happy with and stick to it, but don’t be afraid to adjust things if you feel that you’re lowballing yourself over time.
Pricing on a per-project basis
This pricing strategy is essentially setting a fixed price for specific projects or tasks. This can work well for certain gigs, where you may feel confident charging a flat fee for a particular service. The drawback of this strategy comes when things start to grow beyond the initially agreed requirements. You’ll need to grasp and pin down exactly what’s expected of you for that set amount of money, so you don’t undercharge or overcharge the client.
If do you set per-project prices, be sure to add a clause or condition on your contracts that sets terms for things like additional hours, amendments or revisions. That way, if the project’s scope grows and you find that you’re expected to do more work than you originally signed on for, you’re covered from a payment perspective for your time.
Pricing on a retainer basis
With this model, you’ll set a recurring fee for your services, as they’re provided on an ongoing basis. This is a great model in terms of generating a stable flow of income, however, you’ll need to establish a strong reputation for your work first. Clients are often happy to pay on a retainer basis provided that the ongoing services provided are of the best quality and that the freelancer they’re working with is reliable and trustworthy.
Value-based pricing
Value-based pricing is working out the value you provide to the client and pricing accordingly. Instead of calculating the time it’ll take you to complete a job, value-based pricing allows you to charge the client what you think your work and your service is worth. This is a bold strategy for freelancers but it can also pay highly if you can bring to the table the value your client is looking for.
You should do your research into this particular method of pricing and work out if it’s right for you, or a particular client. With this approach, you’ll need to convey to your client why your services are of a particular value, so bear that in mind.
Working out the right pricing strategy
At the end of the day, your freelance business is your business. You cana do lots of research but it is ultimately up to you how you decide how to price yourself as a freelancer. While it’s good to have a baseline set of rates and services, account for flexibility. Every client and project will be different so that sometimes means creating a bespoke pricing strategy too.
When trying to work out how to price yourself as a freelancer, you need to remember that you’re operating as a business. Look at current rates in your particular freelance market and don’t lowball yourself just to get some work under your belt.
Consider your strengths, your skills and your expertise. The aim is to design a scenario where you’re fairly paid and the client is happy that they’re getting good value for their money. It isn’t easy, but once you get started, it becomes a lot less stressful than trying to pick rates out of thin air!
Common freelance pricing mistakes
Try to avoid some of these errors when you’re figuring out how to price yourself as a freelancer. You need to balance value and expectation quite carefully, so it’s easy to fall foul of some pitfalls.
- Not Staying Consistent
- Try to avoid plucking prices out at random for different clients. It’s easily done, especially when under pressure to give a client an answer. Remember, consistency improves your credibility as a freelancer.
- Buckling Under Client Pressure
- Don’t feel you have to ask your clients how much they think your service is worth. Set yourself a baseline and don’t deviate from it. Be ready to say no to things that border on exploitation!
- Avoiding The Money Talk
- Discussing costs can feel awkward, but most people appreciate this and are glad of an honest and upfront chat. Have that conversation at the start and set your stall early. That way, the client knows where you stand on your prices and can decide if they want to go ahead or not.
- Lowballing Yourself
- This is every freelancer’s most common pitfall. Selling yourself short due to impostor syndrome, or purely because your confidence isn’t quite there yet. It is hard but you must value your work and remind yourself that you deserve fair compensation for your efforts.
- Forgetting Expenses
- When you’re self-employed you bear the brunt of costs that employees don’t. Try to think about your own costs and include them in the rates for your services.
- Focusing On Price Over Value
- This is similar to lowballing, but setting prices purely to compete or undercut others isn’t a great long-term strategy. Think about the value that you bring to the project and convey that to your client above the fact that you’re ‘cheaper’ than others.
- Underestimating Your Time
- Price your work by the hour at the absolute minimum. Projects can quickly spiral out of control, so try and keep this in mind when setting out a budget and scope for your client.
How to price yourself as a freelancer
Hopefully, this post has given you some ideas about setting a strategy for setting out rates as a freelancer. Make sure you do some research into your speciality and find out what current rates are for the services you offer. Consider what you’re comfortable with charging, and really think about the value you will add to the project.
Ultimately, it’s down to you to work out what’s best for your business. Just remember to value yourself and your skills appropriately and don’t sell yourself short! If you’ve found this post helpful, please give it a share or a pin on Pinterest. For more tips and advice about working as a freelancer, check out this post on building your freelance portfolio too.
