How Much Should You Charge for Your Freelancing Services?
One of the biggest struggles that new freelancers face is that of deciding how much to charge for their freelancing services.
While every freelancer answers the pricing question differently, there are some basic principles on how to set your rate that apply to almost all freelancers.
In this post, I’ll share some basic guidelines that you can use to set your own freelancing rates.
What You Need to Do First
The very first thing you need to consider when setting a rate is how much you must earn in order to stay in business. There are many components to this figure, but it all boils down to two factors:
- Your living expenses
- Your business expenses
To continue as a freelancer, you absolutely must charge a price that will at least cover both your living expenses and your business expenses. If your rate doesn’t cover these basic expenses, then you won’t be able to freelance for very long.
Of course, if you can cover these expenses and earn even more, then you are ahead of the game.
Once you’ve determined what you must charge to stay in business, your next decision is how to charge.
How to Charge
There’s been an active debate online for several years on how freelancers should charge: by the hour or by the project.
You’ll read many convincing arguments for both sides, but I fall into the camp that believes that freelancers and clients alike usually benefit when you charge by the project.
Here are some of the benefits to charging by the project:
- The client immediately knows how his or her project will cost and whether he or she can afford you.
- You know exactly how much money you’ll receive when the project is complete.
- You don’t need to explain how you spent your time to the client or even keep a timesheet.
- You earn more money if you can work quickly.
When you quote a project price for a client keep the hourly rate that you want to earn in mind and use that as a basis for your project quote. If you’re bidding by the project, however, don’t share the hourly rate that you want with the client. Simply multiply your desired rate by the number of hours you think the project will take to come up with a project price.
If you don’t have enough information to estimate how long a project will take to complete (and can’t get that information), then it is better to charge for your services by the hour. Don’t ever just guess.
Now that you know what you need to earn and how you are going to charge, you need to know what your services are worth.
What You’re Worth
How do you determine what you’re worth as a freelancer?
Your value to the client is based on what you can do for him or her. Usually, your value to the client increases based on several factors such as:
- Your experience
- Your education
- Your skill or talent level
If you’ve been working in your field for a long time or have formal training in your field, you are probably worth more to your client than a freelancer who just started freelancing last week.
Take some time to think about the unique value that you bring to each project.
Once you’ve determined what your worth, you should compare it to average rates for your field.
The Going Rate
There is no going rate in most freelancing fields. Freelancer earnings vary widely depending on where the freelancer lives, how long he or she has been freelancing, and how good he or she is at estimating projects.
Basically, the going rate for any freelancing service is what the market will bear.
However, for most freelancing fields there are averages that you can use to compare with your rate. To find the average earnings for your field, try looking in the following places:
- Professional Society Surveys and information from professional organizations (such as the EFA or the AIGA
- Articles at Reputable Publications
- The U.S. Bureau of Labor Statistics
- Online sites like PayScale
Using the examples above, come up with your own pricing resources that are specific to your own field.
What Do You Think?
How do you determine what to charge for your freelancing services? What pricing resources did you use to come up with your rates?
Leave your answer in the comments.
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