Freelancers: Putting a Price on It
How do you arrive at your fee when you quote clients for work? How do you price potential projects or calculate an appropriate hourly rate?
Deciding how much you’re worth and what to charge clients can be a daunting task if you’re new to freelancing (and it’s not always easy for experienced freelancers, either).
So here are a few things to consider before naming your price:
Your Freelance Competitors
What does the competition charge for the same services? Of course, you want your fees to be ‘competitive’ – but bear in mind that being competitive doesn’t mean undercutting everyone else. Clients won’t hire you purely on price. They’ve also interested in your…
Your Expertise, Experience and Reliability
How much expertise do you have in your field? Have you got relevant qualifications or an impressive prior client list? Do you have previous experience of completing a very similar project to the one you’re quoting for?
Your abilities – to do your job well, communicate effectively with your client and meet deadlines – are valuable commodities, so don’t sell them short. Offer testimonials and samples upfront when first contacted by a client or when making an initial pitch, so that they can see the standard of work and service they can expect.
Project Complexity
How complex is the project? Does it have particular challenges that will make it a lengthy process or will there be a great deal of research, travel or other time/money consuming activities involved, such as subscriptions, fees or long phone calls? How much personal responsibility will you be expected to take – will you have to liaise with or manage other staff or freelancers, and coordinate their output?
Every project is different and clients’ expectations and requirements vary hugely, so ensure you know exactly what’s expected of you – and adjust your fee accordingly.
Time Required
Underestimating the time a project will take – often because of a fear that someone else will offer to do it more quickly – can be a freelancer’s fatal flaw. Be realistic about not just how long this project will take, but when you will be able to complete it, bearing in mind any other regular commitments or other ongoing work you have.
There’s nothing more demoralising than receiving payment that represents 30 hours work when you know you worked for 60.
Freelancing Overheads
I mentioned travel and research costs up there in complexity – but they’re worth mentioning again, along with any other costs that particular project may incur. Research them – don’t just estimate. Travel in particular can take a huge chunk of your fee if it’s not chargeable separately.
There are also the general overheads of freelancing. You may not think about it in those terms, but there are overheads involved when you’re a freelancer. Those broadband and phone bills won’t pay themselves, and unless you’re secretly a penguin, I’m guessing that you need to heat your workspace for at least part of the year – and that occasionally, you have to plug in equipment or switch a light on.
Add website maintenance, domain registration, office equipment, stationery, and items that are specifically required for what you do… hmm, not cheap, is it, this freelancing business?
Finally, don’t forget that you’re your own employer, so be a good one; ensure you’re making enough to pay for sick days, compassionate leave, annual leave, potential maternity or paternity pay and a pension pot. Charging clients a rate that’s just enough for you to live on this week is not a viable long-term strategy.
