How To: Price Your Awesome Freelance Services
The age old question of what to charge clients has every freelancer tearing out their hair at one point or another. Too high and you're not competitive, too low and you look desperate. There's a happy medium but how do you figure it out?
Remember that the most important thing about pricing your services is that you're happy with your rate. There's nothing worse than feeling resentful during a job because you undercharged.
So too, don't compare yourself to anyone else. Very, very few successful freelancers make good, sustainable incomes without working super hard for it. And they all started somewhere and it's okay to charge on the lower scale while you're still feeling your way.
For my very first web design client I charged $250. Australian dollars! Even the client asked me to charge him more! But I was fine with that price because I was still feeling my way through the business of freelancing and I was grateful for the experience. 18 months later and I now charge a lot more than that because I'm much more confident of my business skills. And 95% of my web design services are personal referrals because my clients have confidence in me too.
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Pricing your freelance services also depends on what you do, what you offer, which kind of clients you're targeting, and what the market's like.
Let's look at that a little more closely. Say for example that you're a writer - what services do you provide? Can you write marketing copy and press releases and social media profiles? Can you package up a little SEO in there? Who are your clients? Not-for-profits, other freelancers or corporate legal firms? What is your target market like? Do you work in a town where there's hardly another writer around, or are the local noticeboards full of low priced copywriting services?
Figure out how the above impacts your business and services and you'll be in a stronger position to figure out the moolah.
Okay, so, let's get into exactly HOW to price your services. There are 2 main methods:
1. A girl (or boy)'s gotta eat
The crux of your freelance work is to put food on the table and have a semi decent lifestyle so let's not forget that. It is after all, the Great Freelancing Dream. Believe me, I've worked in full time jobs that paid so little I ate 2 minute noodles for the week before payday. I don't ever want to feel that dependent on a (bad) paycheck again.
The first means of calculating your hourly rate is based on some simple calculations.
How much money do you want to make this year? Pick a number - and make sure it's 5 figures with 3 zeros on the end! Now figure out how many hours you can work a week, and a year, (subtracting holidays, weekends, sick days etc). Minus at least 30% for non-billable hours like marketing, admin, blogging and other freelancing essentials.
Then divide your 'salary' by your number of billable hours which = your hourly rate.
Super easy! Let's move onto the second method which is a bit more detailed...
2. Write 'em down
Get a piece of paper and list the services you're offering. Every single one. Put as much detail in as you can; nobody else is going to see it.
For example:
1 Business Client 'About' webpage, researched (500 words)
1 Business Client webpage, edited (500 words)
1 Business Client press release (300 words)
1 Business Client blog post, edited (800 words)
If you are offering packages, then group your services in bundles.
Start your clock
Put an approximation of how long it takes you to do each service. Think about research time, drafting and spell checks. If you are doing bigger projects or packages, consider back and forth emails, contracts, invoicing, and editing time.
Clients naturally want everything as soon as possible, preferably yesterday. But try to be realistic about how you work, and know that you'll get faster with practice.
If you're already working on similar projects, use a timer to document your hours. I use Toggl, a free time tracking app (and it has a desktop version).
Crunch the numbers
Write down the amount you'd like to be paid for each job. Okay, not a million bucks - ha ha - but a realistic figure that would satisfactorily cover your time and effort. Bear in mind that whatever you're offering is something that the client isn't able to do themselves.
Now, put yourself in your client's shoes - would you pay someone this price for services rendered? Answer yes? Then you've found your price. Answer no? Then return to the drawing board.
By project or hour?
If you find that the per hour rate isn't working for you, consider a project rate. It's definitely better for packages, ongoing work or longer time frames.
For my web design clients, I charge per project with an additional post-project hourly rate. It's simply more flexible and I think that clients prefer a set, know-what-you're-getting fee rather than a series of prices that can be a bit confusing and counter-intuitive. So, I offer standard website and content packages with the option to tweak things based on the client's needs.
A project rate is simply a calculation of all of your services within the package, plus editing and admin costs.
Other things to consider when calculating your pricing plan are: who the client is - big company, small NGO, your neighbour; whether there's an opportunity for repeat business; the turnaround time - can you add an 'express' cost; your experience and/or speciality; are they nice or a nightmare.
By the way, if it's the latter, or you suspect it might be, drop the job like a hot potato! We've all worked with nightmare clients - the non-payers, the never-satisfieds, the arguers, the nitpickers. It's not worth your time, especially when you're starting out. The stress and frustration will set you back in more ways than one.
So that's it! You're on your way to pricing your awesome freelance skills and making a decent, reliable income!
About the author: Lilani Goonesena is an Australian freelance writer, Squarespace web designer and blogger currently based in Vientiane, Laos. She loves helping freelancers and small businesses with web design and content, blogging and through her awesome weekly newsletter on digital marketing, social media, blogging, web design and "all that online stuff". She also writes food and travel articles for businesses and magazines, and blogs at the delectable Eat Drink Laos, just for fun.