One of the most significant benefits of working for yourself is setting your own rates. But one of the biggest disadvantages of working for yourself is also… setting your own rates. Talking to prospective clients about your rates can feel like an intimidating, tricky, uncomfortable and confusing task. At the end of the day, there is no hard-and-fast rule for setting freelance rates, as every freelancer is different and what works for one won’t necessarily work for another. Like most things, it takes practice, trial-and-error, and research to do well. But there are certain core principles that work across the board to follow. Read on to find the strategies that can help make it setting your rate easier.
Don’t make the first move
Wait for the potential employer to give you an idea of the scope of the projects timeframe, what they are looking for and their allocated budget before quoting your rate. That way you can meet in the middle, rather than sounding too expensive or kick yourself for offering a low rate. You can also determine whether it is better to get paid hourly or project based, depending on the task.
Compare the market!
There are many freelance pay surveys on the web, which are useful for getting a broad overview of the industry as a whole. But they’re not generally extensive or complex enough to offer the kind of fine nuance you need to calculate rates at an individual, specific level. The best way to do some research is by asking other freelancers. If you don’t know any, social media is a good place to search. Join LinkedIn groups or Facebook communities for example for freelancers in your niche and start building your network.
Befriend your numbers
Learn business and accounting terms. Do not be intimidated by the math. Get to know your figures, so you can plan and manage your resources better and sound more professional when you do layout your rates.
Consider ‘Value-based pricing’
Try to move towards value-based pricing. Take an honest assessment of your own work history, portfolio, skill set, contacts and experience, when determining your rates. As you build your clientele, portfolio, and skill set, you’ll be able to raise your hourly and per-project rate to reflect your personal growth.
Factor in Your Additional Expenses
Working for yourself is great! In theory, you get to work wherever you want, set your own schedule, and pursue projects and clients that fit your preferences. But working for yourself also means no holiday pay, sick leave, and general benefits of working for a company. When you’re freelance, you’re responsible for everything that an employer would normally take care of such as health insurance (depending on your country), equipment, software subscriptions, among many other hidden costs. So, remember to take all this into account when setting your freelance rates.
Be Fluid With Your Rates
Remember rates can be so flexible, depending on the time involved, the project and client. Rates can also fluctuate depending on your current goals, priorities and how skilled you are for the role. You may be taking on a job that enables you to gain some experience for example. This means your rate will constantly be in need of some re-evaluating.
Consider the Client
As well as basing your price on your value also price the client. The relationship with your employer also plays a huge factor in determining rates. For example, if the client can only offer you a few hours per month, charge more. But if it is a reliable easy-going client who can offer lots of work, charge less. Rates can also be determined by how needy a client will be. If you are anticipating daily calls, micromanaging, re-doing work, and silly deadlines, then set your rates higher ( also good luck with that one!)