It is a startling fact that many freelancers don’t charge the right rates for the work they do. Why is that?
So many of us stumble into freelancing unprepared for it, and when we start that first client project, we don’t know how to answer when someone asks us ‘how much do you charge?’ or ‘what’s your daily rate?’
Let’s be honest. It’s hard to commit to a rate. It goes right to the heart of how we feel about ourselves and the value that we bring to our clients. If you have just exited corporate life, slightly bruised by the experience, it’s even harder to find the confidence to say to yourself – ‘I’m really good at this, I’m an expert and this is how much I should be paid for that work’.
So this short guide is designed for those of you who are just starting out, and those of you who want to relaunch your pricing.
If you are new to freelancing or thinking about it, then let’s try and get off on the right foot!
1. If you don’t value yourself, noone else will
This is simply the best piece of advice anyone ever gave me and it’s really important to remember throughout your freelance career. We are all humans after all, and who wouldn’t think they were getting a better class of work from the slightly more expensive option? Yes. They will want value for money, but you’ll give them that in spades because you are doing something that you enjoy, aren’t you? Or are you secretly concerned that you aren’t up to it? That’s a lesson in itself and the subject of plenty of our other articles.
2. Understand that it’s not just about your billable hours.
Don’t forget that you need to allow for the hours that you will have to spend doing things which aren’t chargeable to clients. Everyone underestimates how much time is spent writing proposals, marketing, getting out networking and doing all the other income generating activities that you must do to keep work coming in. The secret here is to be ruthless in your time management. Accept that you are going to have to do it but limit the hours you spend doing the unbillable work in favour of work for clients.
3. Set your targets in advance
Only you will know what you need to bring in to balance your books. Everyone has an idea of the lifestyle they want and the bills that need to be paid. Work backwards from that and include the outgoings that you need for your particular kind of work. A freelance artist without materials for example is not going to be able to do much!
You might be surprised at the figure that comes out of that as a daily rate once you’ve allowed for taxes etc. Because now you have to decide how much of a margin you want to make. This is the point where you mustn’t be shy. Be bold. All clients will have a tolerance threshold and you need to pitch your rate at their maximum so that you come away feeling that you have been properly paid for the job.
4. Don’t compare yourself to other freelancers
Trying to match or beat other freelancers on price is not a good idea. The great thing about being freelance is that your clients are buying you and your approach. You are unique and that’s how you should approach your pricing strategy.
5. Give your clients options
You can really help your clients understand the value of the work that you are doing for them by framing your products in a pricing structure. Choices allow the buyer to make sense of the price. So for example, you could offer a day rate but reduce this for a long contract, or reduce the cost if they buy an additional service. Be creative, and if you don’t get this right first time, you can always rethink and reframe.
6. Develop a pricing strategy, not just a raise
Let’s say that you’re now established and you’ve got even more experience behind you. That’s another real benefit of freelancing, that you are gaining experience and skills with every client project. Your work gets better and you learn more about your field. So the longer you work with a client, the more you’re worth to that existing client and the more you will be worth to new clients.
So now’s the time to revisit your pricing strategy. But remember. You have to believe you deserve it. A pricing strategy is a deliberate way to frame the way you charge your clients. It’s not just about justifying a raise in your rates, but thinking about how you deal with different types of clients and how you keep on the front foot.
7. Concentrate on having the right clients
Yes, I really did say that. Every freelancer will tell you that having clients who don’t value you and your work, and who quibble over every little cost is simply a client that you don’t need. If you put your rates up, the chances are that you will lose some clients – but they will be the ones that you don’t need. They will be time consuming, moaning, ungrateful and you’ll be glad not to have to deal with them.
8. Focus on what makes you enthused about your work
When you are paid properly for the work that you do, your outlook changes. It’s amazing, but your confidence starts to grow more and more every time someone pays you properly or well for your work. You will discover a whole new lease of life and that becomes a circle of success as you do better work and get more, better clients.
9. Revaluate what you want out of your freelance career
As I said at the start of this, many of us often stumble into freelancing. That’s just a fact of life. So the very process of looking at your pricing helps you revaluate what you do. The chances are that you have several strings to your bow, and perhaps you’ve discovered that you enjoy some aspects of your freelancing career more than others.
Or perhaps it’s a chance to rethink how you market yourself, what you call yourself and how you market yourself. Perhaps it’s time to think about how you finance a day to yourself to do something that feeds your soul.
10. Ask your clients what they want
This takes guts, but I have seen this work many times. Being brave enough to ask your clients what they want from you and asking if there’s anything they’d like you to do differently can transform many a client relationship. They will feel valued and privileged that you’ve asked. It will give you an important eye into the way they think about you. Often they’ll point out value in your offer that you didn’t see for yourself.
Framing your services in this way will mean that they come along with you on your journey. They’ll start to see themselves as part of your success, which reflects on them.
Well, good luck and please let us know whether this is something that you’ve tackled, and share your experiences with others in the comments below.