The word “freelancer” refers to several roles and positions, but above all else it is a title given to a person engaged in business.
And as a businessman or woman, you are the sole dictator of your decisions and responsibilities over your business. Setting your freelancing rates and fees is one of those important decisions you need to make for your freelance business, because these rates should be affordable for your clients and enough for you to say, “I gained profit from my business as a freelancer.”
Hourly, Fixed Price, or Both
Do you charge by the hour?
Depending on your line of work and your own preferences, you can charge per hour, at a fixed price, or both. Some believe, for example, that charging hourly is a more transparent pricing method, while others think it’s disadvantageous as compared to charging a fixed rate. Then there are freelancers who would charge a fixed price for a project and an hourly rate for extra services when the client requests it.
The best way to decide is to determine which of the three works best for your freelance business. Which pricing model brings in more income? Are you selling packaged or individual services? Which of the models sits well with your clients?
Education, Skills, and Experience
One of the things to consider when setting your freelance rates is the value of your skills, your knowledge and experience in the field, and your reputation as a freelancer.
If you’re a degree holder and have acquired a lot of experience and recognition in your field of expertise, charging professional fees is the most reasonable thing to do. Investment goes into education and professional development, so ideally your rates should return back the investment plus profit.
Do Your Research Before You Price
Check global statistics on how much is the average hourly or fixed prices for your field of work. You can do this by searching through Google and checking statistics of sites like oDesk, Elance, People per Hour, and others.
You probably have an idea of how much you want to earn, but choosing the rates or prices that customers will be happy with needs a bit more research.
Here’s how you can determine if your chosen rate, whether hourly or fixed, works for the customers you’re catering to:
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Check global statistics on how much is the average hourly or fixed prices for your field of work. You can do this by searching through Google and checking the average rate statistics of marketplaces like oDesk, Elance, and People per Hour, and others.
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Use hourly rate calculators and other online tools to determine your rates based on your current financial standing. Freelance Switch’s hourly rate calculator is a good example of an easy tool to use when calculating your average hourly rate.
You can also use Parasol’s hourly rate calculator and/or annual salary calculator to determine the kind of income you would like to earn per year as a freelancer. The outcome will be based on how much you would like to earn within a given period of time, including other factors as well. -
Survey the rates of your fellow freelancers (active and successful) to determine the range that clients are willing to pay.
Devote enough time to study the information presented and research on what’s the best rate that is reasonable for both you and your potential clients.
Sticking To Your Professional Rates
Once you’ve finalized on a particular freelance fee schedule, DO NOT lower it down just to please and win clients.
Plenty of clients will come to you and ask if you can lower your rates for a variety of reasons. Tight budgets, the bids of other freelancers, and the like are just some of the reasons a client will use to get you to lower your fees down.
They may have sweet words to say about the economy and their budget costs, but the more you succumb to their requests just to please them, they’re going to make sure you keep them down for good.
Stick to your professional fees and market yourself that they will have to pay at your rates. You can do this by building an awesome portfolio, receiving great feedback from other clients, and gaining more experience as a freelancer. Make yourself valuable, your services high quality, and clients will want to hire you no matter what you charge.
The more valuable you become, the more likely your clients will want to pay your professional rates for your services. Just make sure that you constantly produce high quality work, great customer service, and are always reliable in terms of communication so that your services will justify the rates you set for your business.
At this point in time, are you happy with how much profit you’re earning from your current professional rates?
Photo credits to much ado about nothing and sundstorm
About the Author: Stef G.
Founder of The Freelance Pinoy, Stef is a freelance copywriter and blogger who loves writing high quality content for blogs and e-commerce. To receive free special updates and freelancing tips from her, sign up for the TFP newsletter. You can also follow her on Twitter @stefgonzaga. Related Posts
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Stephanie, I’m working to take freelance writing to a full-time level. Right now my income in this area is based on two staff writer positions I hold on two different websites. The pay is not super great, but as long as I produce the work I can expect paychecks each month.
By now that I‘m trying to expand my services and get freelance projects, setting my rates is a big issue. When you’re first starting out, it’s difficult to know what average rates are in this field, so oftentimes you end not charging enough and doing lots of work.
I’m also trying to be very careful about the free projects I do. I only do ones that will look good on my resumé, but for the most part I‘m avoiding free and low-pay projects. They’re just not worth the time.
So anyway, thanks for you post. Lots of good stuff for me think about.
Thanks Bakari! And don’t worry about the name mix-up. It’s all good.
Yes, a lot of people who are starting out on freelancing don’t really have a clue at first as to how to charge themselves. But by using these tools and the necessary information such as average hourly rates and personal preferences, we can determine what hourly rate would compensate our expenses and give us the profit we’d like for ourselves. Aside from this, marketing and sales talk is key to landing a job with our desired rate so we gotta develop this as well.
It’s good that you’re working on free projects that you enjoy! I’ve been wanting to do some free projects for myself, particularly rewriting the content of some MMORPG websites, but can’t find the time to do so. Probably when my schedule’s a bit lighter I may be able to set some time for that.
Well, the only free project I’m doing now is an article for iPhone Life—a magazine with ads! Somehow this publication is getting a lot writers to submit articles for free. I figure this will be my first magazine I get my work published in, but after that, no more free articles for ad-supported magazines.
Opps, Alexis, sorry for calling you Laura. I mixed up her site with yours. Feel free to edit that name if you like.
I enjoyed reading this.
Thanks!
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[...] A Beginner’s Guide to Setting Your Freelancing Rates and Fees [...]
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[...] to do everyday. Don’t let these clients take advantage of you by making sure that you know how to price yourself and how to tell if a client is asking for quality work for [...]
Hi, Stef! May I share that one must also take into consideration the following when setting up your rates: 1) the wear and tear of your equipment 2) fixed expenses (rent, electric bills, ISP fee, and etc.), 3) and the tools and resources you might be using/buying to complete the project .
Nice article! I will share this with our Filipino Virtual Assistant community on Facebook (http://facebook.com/VAPhilippines).
Thanks, Rain! Yup, those things come into play when setting your freelance rates and fees as well. I’m glad you brought them up. Thanks for sharing the post to your Facebook page, I appreciate it.
[...] hired at my ideal freelance rates. Less haggling, more focus on how to make the project a [...]
Hi Stef.. maybe we also should take in consideration the benefits we’re not receiving for working in a company.. Life insurance, health insurance, sick days and vacation leaves etc?
Hi, Ruth. I agree, these should also be a standard factor when calculating your project price.
[...] I discovered oDesk.com and created my own profile on June 2009. I learned how to cater to clients, how to set my own freelance writing rates, how to negotiate, and the value of feedback and [...]