A Brief History
Today, the freelance lifestyle attracts a lot of white collars with its freedom, but at the same time, it scares them with unpredictability, high competition, and self-responsibility. It is undeniable, that the most common question among beginner freelancers is ‘How much should I charge for my work?’. Setting prices for your work means that you have to walk on thin ice. On the one hand, you are afraid to ask more, as the client can refuse and find another performer, but, on the other hand, you will feel humiliated when asking not enough. You are providing services so it’s natural that you require a reward for the time and effort spent on developing these skills.
The Main Thing You Should Not Do
A lot of freelancers are committing a serious mistake when they resort to online calculators. They are all made with an identical template. First of all, you set your desireable annual income, fill information about your expenses, for example, pay for rent, Internet, equipment, the fee for being a user of certain sites or programs. Then you add other information about the cost of life, insurance, and taxes. Finally, you calculate the number of hours you can dedicate to freelance and get your hourly rate; however, this one-for-all approach is not right. And you can cope with setting your rate better than an online tool. Here is how to do it.
Do not Dump
Do not fool yourself setting an extremely low price. Low price is not what modern-day customers are calling for. They are looking for quality and pleasant experience. Your rate is a reflection of how you estimate yourself. If you had five years of experience in your sphere but had the same expenses, would your rate be higher? The calculator would say no. But, actually, yes.
What is more, when you estimate your labor at a lowered price you automatically devaluate other freelancers’ work. It is unjustified to lower your rate and compromise others. Being a beginner you have to invest your time and effort into self-improvement in order to make your work profile more eye-catching to customers.
Now it is time for active marketing. Show the world that you are an alive human being, not a bot, which is unable to complete ‘I’m not a robot’ test by Google. Advertise yourself. Advertising is not handing out flyers with your contact information to street pedestrians. It means to take care of your social network profiles, post your expert content regularly, show how responsible, qualified, skillful and serious you are about your work.
It would also be beneficial to make up a Powerpoint presentation or a simple website to introduce yourself to a customer. It is crucial to establish a good track record with clients. Your clients are now the only persons who can provide you with a bred on your table. Pay respect to them, try to understand and dig as much information as you need until you get the sanity of the project.
Something has gone wrong? Sorry, it is your fault. Put the blame exclusively on yourself and admit your failure. Keep clients updated, always give detailed answers to their questions. If you are holding a conversation with the clients, they will have a flawless experience and provide positive feedback on you and even recommend to friends or colleagues.
Carry Out a Research
Analise freelance platforms. Be wise and incorporate your competitors’ experience into making your own path. Go to Upwork to analyze how much others charge for such work and correlate it with the price that clients offer for the project. Visit job portals, figure out how much a specialist in a related field earns monthly. It would also be extremely informative to visit specialized analytical sites such as PayScale and Glassdoor, which offer its users a priceless bank of real data on salaries of workers of different profiles.
Experiment! Place one bid at a higher price, then at lower and see what are the effects. Send applications on Upwork with different bids, so the number of responses will display you the appropriate tactic. Try that method with job portals too. There are still companies out there searching for remote workers hastily. So, become the light at the end of the tunnel for them and get a long-term job with a fixed salary.
Choose a Pricing Model
There are several pricing methods, which fit every sphere of freelance.
- Hourly rate. This is a perfect match for beginners and those who deal with advanced technologies, like app development or website creation. It works best if you are just starting out and cannot estimate accurately how long it is going to take you. Unfortunately, this is not the ultimate strategy, as later you will be limited by that. As your productivity, quality of work will improve, the task that took you all day to complete would take only a few hours. This is an indicator to change the pricing model.
- Project-based pricing. In that case, you are charging money for your skills and knowledge, but not for the time spent. Thus you have the potential to earn more while working less.
- Fixed pricing. It works when you want to establish a durable relationship with the client. Signing an agreement means that you will work for him for an estimated period of time for a certain fee. This method is the best variant for those who are want to have a regular income.
- Package pricing. Basically, it is based on bundling individual services into one package. Due to that method, you can attract clients with different needs and wallet sizes. Be aware that you can only do that when you are capable of offering additional services. But don’t risk to include services that you aren’t qualified enough to do only to advertise yourself.
Consider Additional Factors
There are some other aspects that might have a major impact on your pricing as a freelancer.
- Geographical location. A project completed in the Philipinnes can have a significantly lower cost than the same work done in the USA.
- Years of experience. Naturally, the more experienced you are, the more expensive your time is.
- The diverse world of directions. For instance, 3d-design projects are more highly-estimated than 2d-projects.
- Representatives of one specialty are paid more than the others. Is there a niche in your realm where you operate confidently? You are more likely to conquer the client’s attention with narrow specifications. To paraphrase, a customer looking for an Android app developer will turn his head towards a person who has qualifications in that subject rather than resorts to a freelancer or agency with a wider range of services.
- Level of project. The more sophisticated the project is, the more time, effort, communication and nerves it demands.
Remember that you will not always be buried under mountains of projects. Even professional freelancers with years of experience behind have periods of downtime. During the low season, Lendgenius is what can support you. Do not be fearful of stepping on that shaky road because you are just a beginner and have only a few clients, but also do not expect that you will have a 40-hour-a-week load – it is necessary to work a lot to get such a demand for your services. Consider that you are now a freelance business owner, liable for your own accounting, marketing and workflow organization. These activities will consume a lot of your time as well.
Of course, you can resort to an online calculator, but use it as a starting point for your later bids. The results it can give you can be far away from what is really going on at job portals and freelance sites. The optimal price for your labor can be found only based on competitors’ rates, offerings of job portals, statistic data on specified sites, chosen pricing model and some additional factors. The probability of unexpected changes and peculiarities of the project must also be taken into consideration.
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For more information, please see…
Drake, Susan M. Freelancing For Dummies. For Dummies, 2001.