How to Price Yourself as a Freelancer
When I first started as a freelancer, like most newbies, I had no idea how to charge. As such, I turned to a close friend in advertising.
“$100 an hour,” he said.
“$100 an hour!? ” I replied incredulously, “I can’t ask for $100 an hour. I’m just starting out.“
“Okay, then. $75 an hour for now, then raise it to $100 inside a year,” he suggested.
I ended up quoting $35 an hour to start with (which I regret). After all, my friend was probably used to dealing with top agency advertising copywriters, whereas I was just a rookie web copywriter.
Fast forward to today, and I am charging at least $100 per hour; however, I do not quote by the hour (more on that later). Looking back, I understand why my friend recommended $100 per hour. When you quote what you believe you are worth, it shows that you back yourself and, in turn, you gain more respect from your clients and they will be more likely to pay you as such.
On the flip side, you also need to consider quoting what the market will bear. What exactly do I mean by that? Let’s deep dive into freelance quoting.
How to price freelance quotes
As most of us freelancers tend to be insecure and possibly suffer from imposter syndrome, starting out quoting low isn’t such a bad idea when getting started. As you learn and grow as a freelance, whatever, you can raise your quotes along the way. I found that I had a gut feeling if I raised my rates too high. Listen to your gut feeling. If it feels right, it probably is!
What feels right to you may be determined by where you live, cost of living, and what you think you need to earn as a salary. You may need to crunch some numbers, and many experts to advise this to determine your rates.
However, I have a much simpler rule of thumb:
If you have no experience in your chosen freelance profession, then I would suggest you start low around the $50 per hour rate.
After a year, if you are confident in your abilities, raise your rates to $60 per hour.
After two years of growing as a freelancer, raise your rates to $75 per hour.
Suppose you have significant in-house experience in your chosen freelance profession. In that case, you could easily charge $75 per hour.
If you are still working as a freelancer after five years, you should be able to confidently quote $100 per hour.
How to quote $100 + per hour
The answer; by not quoting by the hour at all.
Allow me to explain.
After years of freelance copywriting, I have learned roughly how long a project will take me. Use a project timing platform to do the same and for better time management. Then, instead of quoting by the hour, I quote the client a lump sum for the whole project, based on my rate of $100 per hour.
And here’s the thing, the rate of $100 an hour is never mentioned to the client.
More often than not, the client accepts the quote. However, they might like to know how you came up with that figure. And fair enough. In that case, you need to provide them with a formal quote and break it down into items listed with the hours estimated to complete task times the rate per hour charged. Take a look at this old quote of mine I created in a MS word template (I know use apps like Quickbooks or Xero):
Yes, in this situation, they know how much you charge by the hour. Note, at the bottom of the quote, I have included a clause that the quote is subject to change. Including this will protect you if they try and add further work down the track.
Also note, that I have included an upfront amount of 50%. While this seems high, it is not uncommon to ask for across-the board in freelancing and creative contractors. It serves two main purposes:
- Ensures you are paid for your work.
- Improves cash-flow; which is essential for the freelancer
This will happen. Not often, but it will happen. So, I draw upon my screenwriting skills to write you a script which you can either make your own, or recite it word for word.
Client: That’s a little higher than I expected.
Me: Okay, what figure did you have in mind?
Me: Okay then. Well, those are the rates I charge all my clients; however, I do really like this project and would like to work with you. If I could come down in price a little, are you willing to come a bit and meet me in the middle?
From my experience, they will agree to meet you in the middle. And, as a result, you will still earn close to your desired rates.
If, however, they do not compromise, then take that as a red flag and thank them for considering you as their freelancer and move on. Some clients are more trouble than they are worth and are best avoided from the get-go. To learn more about which red flags to look out for when taking on a new client, check out my next post entirely dedicated to the subject.