How should I price my freelance services? That is the big question that all freelancers have to answer before their business takes off. It is a daunting question, but answering it moves you closer to fulfilling your freelancing dream.
Pricing is an essential element in your business. It can make or break your business. Developing the right pricing strategy is not only about making more money but also about valuing yourself, your time and your services.
Factors That Influence Freelance Pricing
While coming up with your business rates, these factors will affect how high or how low your prices are. They are:
- Experience: Having extensive experience in a field will allow you to set higher prices for your services.
- Location: Different locations have varying rates due to the local economy. For instance, freelancers in America tend to be paid more than freelancers in India doing the same task.
- Professional qualifications: Some jobs require you to have professional certification. For example, if you’re an online marketer, you may have a few certificates from Google Analytics Academy. The more qualified you are, the better the pricing.
- Project complexity: Simple projects have lower prices compared to complex projects that require more time and skill.
Freelancer Pricing Strategies
There are three main freelancer pricing models. Let’s take a look and see which one you should consider.
Under hourly pricing, you are paid for the number of hours you work. It is a simple and straightforward method that is preferred by both freelancers and clients. The money you earn is directly related to the amount of time you take to complete a task.
It is a good pricing method since it provides certainty, and the longer the project takes, the more you earn. However, your earnings may decrease over time, because your efficiency increases. In other words, you need less time to complete a task.
Most freelancers begin with hourly pricing, but it only works up to a certain limit. Due to experience and efficiency, your rate per hour will increase over time. High per hour rates will, in effect, chase clients away who are unable to understand why your per hour rate is so high. So once you hit this wall, you need to consider project-based pricing.
Project-based pricing is very different from hourly pricing. Depending on what you have negotiated, you may enjoy higher pay for your work than when asking for an hourly rate. In order to determine how much a project is worth, there are a few things that you should put into consideration:
- Project scope: How much time will it take you to complete a client’s project?
- The project’s complexity: How easy or hard is it to fulfill a client’s needs?
- Service exclusivity: Does a client need you to focus only on them?
- How much you love working with a client: If they are too demanding, you might want to increase your charge.
- The project’s timeline: What is the client’s expected deadline? Projects that are urgent and have a short deadline normally necessitate higher charges.
Under project-based pricing, you can sometimes earn more in a shorter period. The end product is the client’s focus; hence, depending on how much time you put in, you could charge higher rates.
Let’s take a hypothetical example. A client will be more willing to pay $500 for the complete project compared to $500/hour; even if you just need one hour to finish the job. So, if you’ve hit the ceiling on hourly pricing, project-based pricing is the best way to go.
This is the ultimate freelancer pricing model that you should aspire to achieve. Your pricing is not dependent on time or skill. Your service charge is entirely dependent on how much value your work brings to the client.
Say, for example, you are a copywriter. You won’t charge on a per word or hour basis. Instead, you will charge by the result your client gets from your work. So if you write a 300-word landing page that increases your client’s sales by $40,000, you can charge them 10% of the return on investment, which amounts to $4,000.
You can make more money under value-based pricing compared to hourly and project-based pricing. When making proposals, focus on showing your clients how your skills will help them achieve their goals; the results that you will help them achieve.
Remember, under this pricing model, having the right target market is critical. Quality clients are not afraid of paying large sums of money for quality work. However, if the clients you pursue are unable to pay for your service, it won’t make a difference to them how good you are.
There is no right or wrong price. Freelance prices are personal since every freelancer has different aspirations, responsibilities, expectations, skill sets, and experience. Do not feel obligated to set a price that is not right for you. Set your price and stand by it.
Plus, never underbid your client’s pricing just to get a job. It may hurt the value of your work and lower the quality of clients you are seeking.
Remember, clients are more willing to pay premium prices for quality work. Therefore, always keep learning and grow your knowledge, so that you can truly become an expert freelancer. I hope you get the answer of your question “How To Price Your Freelance Services”. Have a nice day and stay safe!
As a freelancer and entrepreneur (I run a community for entrepreneurs called Enter Network), I love talking to entrepreneurs — from small family-owned businesses to the next Amazon. So on my blog (https://jochemgerritsen.com/), I do exactly that: I write about entrepreneurship, and a variety of related topics (such as freelancing, money/finances, personal development, and happiness). The idea is to share my content and expertise with as many people as possible.