10 Tips on Setting Your Prices as a Freelancer
When you make the giant and scary leap into the world of freelancing, it can be tricky to know what you should be setting your prices as a freelancer, on both an hourly and a daily rate. There is no rule book to follow, and unlike working for a company, you have to set prices yourself!
Like everyone setting prices as freelancers, you will likely be apprehensive about charging too much and pricing yourself out of the market. But it is essential that you don’t undersell your abilities either.
When setting prices as a freelancer, remember that you have valuable skills to offer, so you need to make sure you put your prices at the right level before you even start chatting to potential clients.
Here are my top tips when it comes to setting your prices as a freelancer.
Do Some Research
The first step you need to take when setting your prices as a freelancer is to make sure you do some in-depth research to look at what other freelancers in your field are charging for similar jobs.
If you have friends that are more experienced in freelance, enquire what prices that charge. Compare the information you gather when setting your prices and then balance that with your skills and experience. You shouldn’t undercut the market and underprice your services, but you do need to be competitive.
Know Your Place
It would be best to keep in mind that agencies tend to charge anywhere between £600 - £1000 per day. That is due to the cost implications they incorporate, such as overheads and staff.
Setting your prices as a freelancer, you can’t charge the same amount unless, for some reason, you are highly in demand or your skills are extremely niche.
When you are setting your prices, they need to reflect that you are working solo.
Figure Out Your Costs
When setting your prices as a freelancer, you need to work out what your business costs are. Whether fees for an office or expenses you must pay for specific equipment or materials, you need to ensure your hourly rate is reasonable and profitable.
Think About Time Lost
Realistically, you can’t think about charging for 40 hours of work per week, especially when you consider the time you will lose sorting out other aspects of your business like invoicing and administration.
Be sure to account for any non-billable hours when you are setting your prices as a freelancer.
How Much Do You Want to Earn?
Another thing to consider when setting your prices is how much money you would like to earn as a freelancer!
Consider how much holiday you want to take and how much you need to earn to live your ideal lifestyle, and this will help dictate the prices you set.
Be Flexible
Flexibility is vital when you are setting prices. You will quickly notice that your day or hourly rate will not suit all of your clients. However, the smart move is to charge high early and then have some leeway to come down on price.
Go into all negotiations with a minimum hourly rate, and make sure you go no lower than that. Remember the costs you need to cover and how important it is not to undervalue yourself.
Talk About Money
This one is tricky but essential when you are your boss. When the topic of payment comes up with a potential client, you need to be open, confident, and upfront with your costs, providing more information about why if necessary.
Have confidence in yourself and be willing to negotiate or walk away. Remember your worth!
Set Budgets
When chatting to a potential client, make sure you establish their budget before you tell them your rates. Then, you can use that information to modify your prices to suit or walk away from the negotiation table.
Have A Strategy
When you are setting your prices as a freelancer, you have two key strategies you must consider. Do you charge for a project, or do you charge by the hour? You don’t need to stick to the same choice for each client; you should choose the right option for each job.
Be Mindful of the Unknowns
When setting your prices, consider how productive you are and how much you plan on realistically achieving in a certain amount of time. Add a couple of days to that estimate as a contingency. Try not to leave yourself in an impossible position where you run out of time, let clients down, lose out on money and potentially get a bad reputation.
If you liked this blog, check out 5 Sites For Guaranteed Freelance Work Even If You’re A Beginner, and make sure you are subscribed to my newsletter, for more great content, delivered straight to your inbox!
