Just about every freelancer launches their solopreneurship venture with the same picture in mind: hanging out on the couch in their PJs or in their favorite coffee shop, spending their days doing the work they enjoy most. Sure, that’s most of it if you play your cards right, but there are always other tasks to manage too.
Among those annoying, stressful side tasks is figuring out your pricing. Discussing money makes many of us uncomfortable, especially if you were raised to see finances as a very private matter.
It’s an inevitability in freelancing, though, so how do you know what your work is worth? Where do you begin and how do you know if you’re over-or under-charging?
As anyone would guess, there’s no singular “going rate” for all freelancers. It varies between individuals, industries, locations, even circumstances. Let’s dive into some of those factors and how to translate them into your own pricing model.
How Much to Charge: Factors That Affect Your Freelance Pricing
To give my fellow freelancers a starting point toward setting pricing for various projects, I’ve pulled together a list of factors you need to consider whether you’re in your first or fifteenth year of freelancing.
The Type of Freelance Work You Do
Just as in the employment world, the freelance world operates on supply and demand. The rarer it is to find skilled freelancers in your field, the more you should charge. For example, freelance virtual assistants don’t command rates that are as high as freelance web developers. Web developers require more training so there are fewer of them available for work. The only difference here between freelancing and employment is that freelancers can charge more on average (yay!).
This is the top starting point: look up average pricing for freelancers in your field to see what clients are expecting to pay. The Chances are that you’ll find price ranges and they might account for other variables too. From there, you can use these factors below to narrow the possibilities further.
Who would you expect to deliver a higher quality of work when you need a haircut: a stylist with two decades or two months of experience? With no other information, the clear winner would be the 20-year veteran.
The same is true for freelancing in any field: the more experience you have, the more clients will pay because your work should be far above the work they’d get from greener professionals.
Ever talked to someone who moved from New York City to Arkansas and raved about how everything costs so little? Costs of living are dramatically different from one area to the next and the costs of everything else follow – including freelance services from web design to event planning.
Now, the question is, do you price based on your location or your client’s? It’s easier to charge based on your area because it doesn’t change but charging by clients’ locations could be more profitable. It’s a matter of how much work that extra cash is worth.
Two projects could wind up with similar finished products but take very different types or amounts of work. For example, writers often charge per word, but 1000 words could dramatically different amounts of time and work depending on how much research they require. If you use project based pricing rather than charging an hourly rate, make sure you know what’s involved in advance.
Some clients are hands-off: they provide the project parameters and just want the deliverables at the project’s end. Others want frequent meetings, updates, and touchpoints so they know the project’s progress. I’ll give you one guess which type of client most freelancers prefer.
Know in advance how much interaction the client will expect and build that into your pricing too. Factor in other inconveniences, like whether it’s all remote work or whether the client requires you to spend time in their office.
Let’s say you want to make a certain amount per day, and you say, “If I focus perfectly, I can accomplish X amount in one hour.” You figure on eight hours per day and use that to set your pricing. Then, in practice, you realize you can’t focus perfectly and work at warp speed every hour of every day. The energy runs out and you can only accomplish five of those “one-hour” projects per day, not eight.
Leave room for your energy expenditure when pricing out freelance jobs. Don’t burn yourself out when it isn’t necessary.
Pricing Strategies for Freelancers
I’ve talked about pricing in a few different ways: by project, by hour, by word, and so on. That’s part of determining how much to charge too: determining how to charge first.
It comes down to the work you do. Does the client’s value come from the service or the finished product? For virtual assistants, for example, hourly rates make sense because the more time you’re available to answer clients’ calls, the more value they get. With web development, though, the client cares about getting a great site, not how long it took you to produce it.
That’s how you decide between fixed pricing and hourly pricing. From there, break it down further. Do you want to bill for individual billable hours or an hourly day rate so clients book you for full days at a time?
Choosing Your Pay
Deciding how much to charge might be stressful but choosing your own income is also part of the beauty of freelancing. Depending on your specialty, the hours you work, and other factors, you can make a pretty penny and your rate should keep increasing as your experience does.