As a freelancer, we can set our prices to what we want. It is a free market! The problem is, a free market doesn’t readily accept what you demand. You need to find someone who will pay you happily for the value you can give.
For most aspiring freelancers, what is that value? What is the proper amount to charge your prospective clients?
Agencies vs. Freelancing
Before tackling this, you must understand one other option. If you don’t know what to charge and you’re afraid to set a figure, an agency might be a proper fit for you. Reputable remote working agencies will offer you a decent amount of money based on your market value in the geographical area you’re in.
For example, you are staying in Manila as an SEO expert. You can expect to have an offer for similar jobs in Manila. Don’t expect Canadian rates or Australian rates. But at least, you are fairly compensated in your geographical location.
The Movement to Insourcing
In freelancing, it’s different. You can charge as much as you want, even the international rates.
But be wary. Some people charge high amounts, but they can’t deliver the job worth that price. That’s why some international companies are moving to “insourcing.”
If you are not familiar, a country (for example, Australia) has different wages per region. The salaries vary if you employ in Sydney compared to Hobart.
Insourcing means that instead of outsourcing in other countries like the Philippines, they opt to get talent inside Australia but in a different region. In this case, a Sydney-based company might get from Hobart rather than Sydney. Mainly because of their bad experiences with incompetent talent abroad.
Giving Value to Your Clients
We don’t want that to taint the freelance market we are enjoying. Therefore, it all boils down to what value you can give.
Are you listening to what your clients really want, not what they are just saying? Do you understand the effort involved in reaching that goal? This is the mindset you should have when pricing your services.
- Know what they want.
- Know what needs to be done and how long to finish it.
- Know the value it can give to their business.
For example, someone might be paying you $500 to get leads that can give $10,000 in sales. It’s a no brainer.
Check the Market
With the clients in mind, you need to have a ballpark figure on the average prices of the services you can give.
You can check online job boards for similar services and how it’s priced. It’s also good to know trusted people in the industry to guide you in pricing. Find FB groups in your niche. Look for mentors that have experience already.
You can use that as a starting point to charge your prices.
The Worth of Your Time
Next, you need to know how much you are worth per hour. This is a subjective question that can be answered in multiple ways. You can start by identifying the total amount of your average expenses and your desired savings.
Using that figure, divide it by the number of hours you are realistically willing to work. That’s your desired rate. And then, compare the rate with the market rate you found from your peers or on the job boards.
Your desired rate might be higher than what you are currently valued in the market. Don’t be hopeless. At least, you know now the things you need to work on to achieve your desired rate.
Our worth increases with the number of problems we can solve. Instead of moping, learn new things and have the confidence to take on bigger problems to get higher rates.
Likewise, there will also come a time when you will have an influx of clients. Your time is worth more because of the demand. You can now dictate your prices for projects that are worth your time and extra effort.
Charge Per Project, Not Per Hour
For freelancing gigs, it might be best to charge per project, not per hour. Roughly, you should know how much time it would take to finish a project. Why should you be constricted with hours if you can finish it faster?
If it would take you 3 days to finish a $1000 project, would it matter if your daily price is $100? Your quality work at the amount of time you spend will still be worth $1000 to the client who will take advantage of it.
Charge per project to have more flexibility with your time.
Ask their Budget
Sometimes, the answer is right in front of you. It’s good to ask your prospective clients, “what is the scope of your project, and what is your budget?”
With your knowledge of the pricing of your services in mind, you will know if the budget is fair for you. Sometimes, it might even be higher compared to your expectations.
Check the Value It Can Give to You
What if you don’t get the price you want? You can still negotiate if you can. But sometimes, you should look at what the project can give to you. If you see that it’s:
- a doorway to more opportunities
- a cause you want to support
- an interesting project you will enjoy
By all means, take it even if the payment is not that high. After all, our long term goals and happiness come first, right? With that, good luck with your freelancing career!