When it comes to setting your rates as a freelancer, we all agree that it’s rather a touchy subject. Most people find the process confusing and uncomfortable: what if your rates are too high? Or even worse, too little?
You don't want to price yourself out of the market, but you do need to be compensated adequately for your time and effort, as well as your talent and skill level, because ultimately, you want to pay your bills, right?
Remember that the only thing worse than charging a client too much is not charging them enough. So step one is to evaluate your skillset.
Evaluate your skill set
Before you go on a frenzy trying to figure out the best possible rate to go with, remember to evaluate your skills, expertise, and certificates. These play a major part in determining how much you should or can be charging.
Doing this all solo can be tiring, but don’t worry, we’re here to make your life easier. There are plenty of websites that provide fantastic tools for evaluating the average wage in different types of services. The Salary website, for example, can help you estimate your annual income and then divide it by the number of hours you plan to work each year to determine your hourly pricing. Other rate assessment websites you can look at are Payscale, Indeed, and Glassdoor.
Make sure to never underestimate your worth and the value of your skills. Set a threshold that you find reasonable with the help of these websites and never go below it. Know your worth!
Settle on a pricing model
Freelancers can charge their clients using various pricing techniques and rates, such as hourly fees, a fixed price per job, and more complex value-based pricing. Each has its own advantages and inconveniences, but the decision comes down to the type of service you offer and the model you are most comfortable with.
Hourly rate:
According to Upwork, the average hourly freelance rate is around $20. Many freelancers feel that charging an hourly rate is the greatest method to get paid properly for their work while also determining how to bring in their targeted income.
To figure out your hourly rate, sum up all of your monthly living expenditures and business expenses as a freelancer. Don't forget to factor in how much income tax you'll have to pay because your employer will no longer deduct it from your paycheck.
Project-based rate:
Instead of keeping track of your time and charging hourly rates, you can charge a fixed rate for the duration of the project.
With this form of pricing, the emphasis is on the outcome rather than the amount of time it takes to complete the project. When establishing your project fees, try to take your experience, dependability, and speed into account rather than just the number of hours you believe it will take. Be prepared to share a pricing breakdown as some clients may ask for this so they can understand how you arrived at that cost and what costs what, others only want to know how much it will cost to do the task.
Upfront payment or retainers:
If a client is looking for a long-term commitment from you on a big-scale project, you may choose to request a retainer fee. This is an advanced payment that serves as a down payment, ensuring that the project is ongoing and that both parties are dedicating the needed time and effort for it.
Retainers are often paid on a weekly or monthly basis. It's a great approach for freelancers to plan their workload and revenue while also successfully scheduling their time. On the client side, they know you'll set aside a particular amount of time each week or month to concentrate on their tasks.
Research the market and network with fellow freelancers
Another factor for determining your freelancing rates is to investigate the pricing of services in your local and client marketplaces. No matter the pricing model you’ve settled on, make sure to examine local job postings or talk to others who work in similar positions at local organizations and businesses. Once you've determined how much the same task would have paid you, determine how much the same job would have cost the client locally.
You can charge somewhat more or less than your or your client's local prices depending on where you live. Salaryexpert and Salarylist are excellent websites for comparing location-based pay for various occupations. Compare wages based on your region and use them as a guideline when billing your clients.
The bottom line
It all boils down to this: it's important to keep your freelancing fees flexible in order to accommodate the many sorts of customers you work with and the various types of tasks you take on. After all, there's no regulation requiring you to charge the same prices or adopt the same approach for all your clients.
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