One of the biggest hurdles as a freelancer is figuring out how much you should charge for your work and what to include on the price list. You need to make a livable wage, but, if you set your price too high, you may price yourself right out of the market. There must be a balance between making what you’re worth and staying competitive with other freelancers in your field.
Know What the Average Freelancer Makes
The average freelance worker puts in about 36 hours a week and makes around $21 an hour. Of course, the rate can vary widely from region to region and based on experience. If you have unique skills, vast experience and a solid reputation, you may command much more than the average freelancer.
Figure out Time Versus Pay
You need to figure out how much of a salary you need to make freelancing worth your time. So, in a 9 to 5, brick and mortar job, you would work 40 hours a week minus a lunch hour each day, or around 32 hours a week. You would probably get two weeks of vacation and holiday pay.
You may want to factor in the cost of buying your own benefits, insurance and a retirement plan like an IRA account. But, for now, let’s just talk about base pay.
If you want to make $35,000 a year, then you’ll need to do the following:
- Divide annual pay by 50 weeks (2 weeks’ vacation per year). $35,000/50 = $700/week
- Now, divide your weekly pay by the hours you plan to work. Since you’ll likely take a shorter lunch, you don’t need to factor in administrative time for now. $700/32 hours = $21.88
- $21.88 is your hourly rate.
If you want to work fewer hours, you’d need to make more per hour.
Flat Rate or Hourly Rate?
Figuring out whether to charge a flat rate or hourly rate can be difficult. Some clients are easier to please than others. Sometimes projects take longer to complete than others.
One way around this issue is to offer a quote for X dollars for a job that will take an estimated number of hours. Inform the client that if you go significantly over that time estimate because of changes, there will be an hourly charge of X. Once you’ve been freelancing for a while, you will be better able to estimate how long a job will take you.
An Actual Price List
A list of how long it takes you, on average, to create a typical project, such as a logo design, can save you time when a potential client asks for a quote. You can then ask a few pertinent questions to determine if the project will take a bit longer than normal and throw out a rate that should hit pretty close to the mark based on the time involved.
If you still aren’t sure what to charge, ask other freelancers you know what they charge. Yes, it is a bit of a rude question, but finding a few mentors who will help you along the way can save you aggravation in the long run.
How to Charge More for Your Experience
It can be helpful to know what the average hourly rate is in your area. For example, the median freelancer writer salary is around $20/hour. That is an entry level rate. If you are an experienced writer or designer, you can certainly charge more.
You can either quote at the rate you want to charge and anyone who isn’t open to that rate will not hire you, or you can trade up for new clients over time.
Most freelancers start with entry level clients. These might be smaller businesses with a low budget for their freelance staff. As your experience level and reputation grow, you will take on new clients. Each time you take on a new client, they should pay you a bit more than you’ve made before.
You can then start to cycle out older clients who won’t pay as much with a plan in place to refer them to someone else, or let them know your rates are going up and give them a chance to pay your new rates. Some will move on, and some will pay the higher rate to keep you.
Time Is Money
One final thing to consider as you decide what prices to charge for your freelance work is how much time some clients take up. You will sometimes take on a client who is difficult to please. This person may simply be a perfectionist. At other times, you will meet a highly critical person who isn’t very nice to you.
No matter the reason, these difficult clients take up a lot of time and emotional energy as you strive to please them. There is also the issue of your own happiness and mental health in dealing with these people. Sometimes, the smart financial decision is to part ways with these difficult clients so you can make room for better, less time-consuming clients.