One of the more difficult aspects of freelancing is figuring out your pricing. If you’re just starting, it can be tricky to identify and establish a pricing strategy for your services. 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. It’s tempting to throw yourself out there and take any kind of work you can get. However, in the long run, that’s much harder to resolve than if you set some pricing guidelines and boundaries right from the get-go.
Knowing how much to charge for your specific service is like asking how long a piece of string is. However, you can and should implement a strategy to price your work in a way that will make your freelance career worth it. Freelancers can easily be exploited in the gig economy. So, knowing your worth is extremely important.
How to price yourself as a freelancer
So, working out a pricing strategy isn’t completely straightforward. Nonetheless, you need 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. Hourly rates are useful for projects that perhaps don’t have a clear start and end date, or for shorter-term projects that might require a bit of extra flexibility.
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. You’ll also really need to understand and be able to communicate the value of the work you do. That way, your client will feel reassured and clear on what to expect from you at the end of the project.
Working out the right pricing strategy
At the end of the day, your freelance business is your business. It’s down to you to figure out what feels right when it comes to how to price yourself as a freelancer. There’s no one-size-fits-all method when it comes to setting rates for your services. It’s fine to combine different methods and change your approach from time to time as well! 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 an easy thing to do, especially if you feel under pressure. However, it can confuse clients and make you seem less credible as a freelance professional. Work out a solid pricing strategy that reflects your expertise, the scale of the project and the current rates across your market.
- 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
- It’s uncomfortable talking about money. Everyone knows that. Still, you have to do it regardless, so being upfront and honest about it in the first place is the best way. 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. Things like equipment, subscriptions, software, marketing, fees and insurance, for example. Factor those costs into your pricing strategy to ensure you’re covered and not left out of pocket.
- 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. You’ll end up burning yourself out and doing more work at a lower quality. Focus on the value you bring and be confident in pricing that accordingly.
- Underestimating Your Time
- Price your work by the hour at the absolute minimum. You’ll find out that time isn’t infinite, although it can quickly begin to feel that way on freelance projects. Consider how much work you can realistically take on and ensure you’re going to be paid appropriately for the time you’ll spend on it.
How to price yourself as a freelancer
Hopefully, this post has given you some ideas about setting a strategy for your pricing. It’s important to dig into your particular freelance skill or niche and explore what the market rates are for that. A good place to start looking might be a freelancer marketplace like Fiverr, where you can get an idea of what others charge for their services.
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. You might enjoy this post on building your freelance portfolio too.
