We freelancers are notorious for not knowing what to charge. We don’t want to charge too much and scare all of our potential customers away, so we lower our prices thinking that it’ll help us get the gig.
For some of us, this works. We get the gig and then we get another gig like it after. Big ups to word of mouth advertising! The second gig is a lot like the one before, except this person wants to haggle a bit—so maybe you charge even less. No biggie, right? Business has been pretty good. You’ve been busy. It’s fine.
If that method works for you and you like the work you’ve been doing, then you might not want to read the rest.
However, there might be a better way…
See, you can work this way and as long as new clients come in, and you can pay your bills, you’ll be fine. But some of us aren’t thrilled with the idea of setting really low prices and really putting in a lot more hours than we’ve been paid for. We know we could be working smarter. Sound familiar?
Maybe you’ve been working on an hourly model where you tell a client your hourly rate—which they really don’t care about—and then you promise to deliver the project in X amount of hours. The client multiplies A times X and figures out how much the project should cost.
You might have even gone so far as saying to the client, “but it probably won’t take me that long.” C’mon. Don’t lie. OK, maybe you haven’t said this to a client, but I know I have. Either way, the client is expecting the project to cost up to a certain price based on your hourly rate and the time you think it’s going to take. When it ends up taking longer, the client probably isn’t going to want to hear about how many more hours it’ll take you for any other reason than to determine how much more it’s going to cost. Your rate doesn’t matter to the client—the final price does.
Your hourly rate is starting to sound like a useless piece of information to the client, isn’t it?
Your hourly rate really doesn’t matter.
However, there’s also the chance that if you quote a flat price (based on you previously factoring your hourly wage and the time you think it will take to get the project done) the client might ask how you arrived at that number—and ask for your hourly rate. What then?
You can tell them, if you want. However, chances are that they’re asking that to gauge how expensive you think you should be. If they wanted to know how long it would take, they’d just ask when they can have the final product. So, why do they want to know?
They’re trying to gauge the value they’re getting.
It makes sense to work this way when you’re just trying to get the client so you can pay the bills. However, if you take a deeper look at who is interested in your down-pricing, you may realize that there are some clients that you need to agree not to work with.
Often the clients I’ve worked with, who wanted to pay a lot less than I should have been paid, weren’t prepared for my services. Their products still needed refining before my web/design/branding services came into the picture. If your client isn’t really sure who they are or what they’re doing, you will probably end up doing more work than you signed up to do. This costs you money and time.
This is why it’s not about hourly rates. It’s about getting your clients to invest in themselves by investing in your services. How are you going to do that without an hourly rate to quote? You start by thinking about the value you’ll add to their project.
You might not think that your skills are that valuable yet (don’t be ashamed to admit that to yourself, this is a safe space). Maybe you’re not as experienced as someone else in your field. That may be true and that’s perfectly fine. However, your client, or potential client, is talking to you right now—not that other guy.
You’ve got skills!
Consider how much experience you have at what it is they’re asking for. You’ve been doing this for X amount of years. You’ve spent X amount of hours toying around with new ways to do whatever it is you do. You’ve read numerous articles on your topic. You’ve been to conferences and watched webinars and maybe even contributed valuable information to your industry’s community. That’s valuable stuff. You’re
allowed expected to charge for all of that. Seriously, that’s what clients are paying for.
If you’re not doing those things, you should. You should always be building your skills and contributing to your industry if you can. It will help you become a leader in your industry. That’s desirable to you, right? Yes. Yes, it is!
If you came here looking for an equation that would spit out a figure that you should charge each of your clients, then you’re probably pissed—my bad. You might realize now that there isn’t a one-size-fits-all approach to pricing. We’ll talk more about “pricing that fits” in part 2. That might not make a bad title, y’know…
You provide a valuable service, whether you realize it or not, that people are interested in. Think about your expertise in the area in which a potential client needs your help. Consider how much time it will take you, consider how much effort you’re going to need to give it, and consider how you’d like to be compensated for investing yourself in this project. Use that as the starting point for any price you quote.
It might not make you rich overnight, but it will help you attract better projects that you can really enjoy working on—rather than just getting the work done a quickly as you can so you don’t have to shrink your hourly rate.
If you want to find out when How to Charge for Your Freelance Services: Part 2 is ready, drop your name and email in the sign up form or ask me on Twitter.
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