One of the most difficult things for a freelancer to accomplish after obtaining clients is to calculate their freelance pricing. You don’t want to overcharge, but you do want to be compensated adequately for the effort and time you put into your project, as well as your talent and skill. You must also earn a living! Remember, the only thing worse than charging a client, or quoting a lower price and then regretting later that there was room for more.
Moreover, freelance rates may vary in a variety of ways, including freelance hourly rates, a fixed price per job, and more complex value-based pricing.
Many people inquire about hourly rates for specific professions, but there are no set freelance rates. As a result, we’ll look at a few different approaches to determining the ideal freelance pricing for you.
When we have a lot of work on our hands, we tend to quote more. This isn’t the best technique to figure out the price. Instead, have a peek at the work that will be available in the near future. As a freelancer, you should always be able to see the workstream for the next three months.
Why Is It So Difficult To Set Freelance Rates?
The dilemma of how much to charge is the one that all freelancers face. Evaluating your value, target clientele, and the larger competitive market are all important components of any pricing strategy. If you set your charges too low, you risk losing money and not being compensated for the services you provide. If you set your charges too high, though, you risk losing business to competing freelancers who charge a lower fee.
As a freelancer, you have the flexibility and freedom to adjust your freelance rates whenever you want. The price you decide on isn’t set in stone. As a result, don’t overthink it. This post will teach you tactics and tips for determining a price that you feel comfortable charging.
How To Decide Your Freelance Pricing?
Working as a freelancer can be financially rewarding. Check out the various ways you can charge for your freelancing work.
Are you seeking the ideal formula to calculate how much to charge? Everyone understands that time equals money. However, how valuable is your time? Which factors influence the amount of money you can charge? It is mostly based on your experience, talents, location, value, industry, and so on.
In truth, there is no such thing as the ideal freelance pricing formula. You’ll need to choose a rate, and then you’ll be able to watch how potential clients react to it and adjust it to meet your needs.
Let’s take a look at two of the most typical price models – freelance hourly rate and project-based (fixed) pricing, and some other less popular models too. These models will help create a strong base for pricing your freelance services.
Freelance Hourly Rates
The idea is so easy, hourly pricing is the most typical way new freelancers determine their rates. This approach requires you to calculate an hourly rate for your labour and multiply it by the number of hours you spent doing it.
Customer support and technical support are two examples of initiatives that perform well on an hourly basis pricing strategy.
(Fixed) Price Based On Projects
A freelancer charges a flat rate for the entire project in this arrangement. Rather than being paid based on the number of hours you labour, you are paid based on the outcome you produce. This is the best option for projects with well-defined deliverables.
Web design and mobile app development are two examples of projects that are well suited for fixed-price contracts.
Rather than pricing the project on the basis of what it requires, you price your services based on the value it will provide to the client. It may be applicable if your job directly contributes to a client’s profit.
If the work you provide, for example, has the potential to generate a significant amount of new business, you might charge a percentage of the new business earnings as your fee. It is completely based on how much money the customer makes from what you submitted, not on how much time or effort you put into the project.
Performance-based value is tying your price to the financial benefits the client will receive as a consequence of your efforts. As it’s so closely linked to analytics, it’s a frequent approach in areas like SEO, branding, and website design (e-commerce, etc).
After knowing the different models on the basis of which a freelancer can establish his/her pricing strategy, it’s time to go through the steps which will help you frame that strategy.
Source Of Leads Determining Freelance Pricing
- Referral-Based Quality Lead – If a potential client comes through the reference of a past client, you can charge more. The idea is that the referrer has already done the selling for you. You should gauge if the lead is talking to a competitor also, if yes, you should be careful and find ways to increase the quality lead. The real selling here is done by the referrer.
- Online Sites/Directory – If someone is coming to you through an online directory or industry forums etc. you should be careful to not quote high. The lead has not qualified you yet and they might be talking to competing service providers, so don’t turn them off with off-the-mark pricing.
- Past Relation – If the potential client already knows you, as a distant family, a family of a friend, or just happens to be connected online, work on educating them before quoting the price. It would still be quite low here. There is a good chance that they are only enquiring and will only commission the project if the price is low.
3 Reasons To Look At When Trying To Quote Freelancing Rates To A New Client
- I want this client – The brand value of the client you are targeting is high in the market. Having this client in the portfolio will increase your chances of winning more business in future. In such cases, we should look to charge just the bare minimum. I would go to the extent of doing the work for free if I get to mention them publicly. “Exposure” as a currency is acceptable here.
- I want to experience this work – If you are trying to change your work domain or add a new domain. Or even if you are just new to the field of freelancing, you should charge less. Just charge a basic fee. Treat this as learning at the client’s expense. Don’t do such work for free and also don’t keep a price that would compare to more seasoned people. The right strategy is to quote a price and give in to the client’s bargain.
- I want to maximize profit – When it is none of the above cases, you should charge high. If the client isn’t a well-known name and you are already good at work they want you to do, quote them high. You should regret less if you lose the client due to the price here.
Also read: How to increase your rates as a freelancer>
Next Step After Deciding Freelance Pricing
You have complete discretion over how much you charge for your time, attention, and skill set as a freelancer. When it comes to determining freelance rates, there are numerous factors to consider. You can think about the issues raised in this article, utilize the annual salary calculator, compare your rates to those of your competitors, and make adjustments based on the value you provide.
The most essential thing to keep in mind is that your freelance rates aren’t set in stone. Choose your freelance pricing that you’re comfortable with and give it a shot. If your price plan fits the worth of your service, the market and potential clients will tell you. As you gain expertise, enhance the value of your services, and your revenue goals will alter, on the basis of which you can adjust your fee.
Sign up on Refrens if you’re ready to start your freelance career. Each day, tens of thousands of projects are placed on Refrens’ work marketplace, so establish your freelance rates and apply to projects to observe how potential clients react to your freelance pricing.
Furthermore, you can use Refrens for all national and foreign customer payments.