Freelance Pricing: How to make more money as a Freelancer?

Freelancing comes with a lot of responsibilities. And the biggest question is how do you price your services?

As someone who has only been employed and seen people being employed, freelancing is an entirely new world. I barely even asked for a raise during my time as a Software Engineer. I used to believe that I would only get what I deserved.

But I was wrong.

I did not have a positive money mindset.

Even when I began freelancing, I entered with the same mindset. I began to ask for the cheapest rates because I thought that was what I deserved. Having no experience in the field, I began doubting my skills.

That’s where the downfall begins. Without a positive money mindset, we begin charging low rates because we think we’re still beginners and that we don’t deserve to charge like professionals. But, this puts out a wrong message about us and our services.

It’s evident that we do freelancing for its amazing freedom, but we also want it to sustain our life. We need to get paid at least to fulfil our monthly expenses.

So, how exactly can we start pricing our services?

Starting with an hourly charge

One of the common ways used by freelancers these days is charging by the hour. You have probably seen many on freelance job boards like Upwork or Fiverr charging per hour. It’s a good starting place for beginners. Once you get an estimate of the number of hours you might need to finish the project, it would be easy for you to calculate the total charge.

But, how do we calculate the hourly charge?

Let me tell you how…

Let’s say you want to earn $6,000 per month which includes your everyday expenses, subscriptions for running your business and your salary.

(Your salary is important here because as a freelancer you need to plan for your leaves, insurance and retirement for the future)

So, your yearly salary would be $6,000 * 12 = $72,000

Now, let’s say the average number of weeks you might work will be 50 with an average of 5 days per week.

Also, let’s assume you can work for 6 hours (excluding your administrative and other business management tasks)

This comes to total hours of 50 * 5 * 6 = 1500

So, your hourly charge would be $72,000 / 1500 = $48

For a decent starting salary of $72,000 per year, you should start charging around $48 per hour.

But, as a beginner, you are probably overwhelmed by the number of freelancers who are offering the same services as you but at a lower price.

Yes, it’s important to know what the prices in the market are. But, you should stop comparing your prices with others. I’ll tell you why.

One, they may not have the same skill, experience or portfolio that you have.

Two, they might be living in a country where the cost of living might be different from yours.

Just because someone else is charging less than you doesn’t mean you should.

Charing per word

As a freelancer copywriter and content writer, I was advised to charge per word as a beginner. It seemed interesting at the beginning and I was charging around $0.01 per word. At that time, I was in India which meant 1 rupee per word.

I assumed this was decent pay assuming I can write 400 words in an hour, I can make at least 2000 rupees per day. I was wrong.

You need to understand that your service doesn’t just include your result, but the process matters too. If you are a writer like me, you probably spend at half the time researching. So, what about the time and effort spent on reading and collecting ideas for the copy?

The grave mistake we make is not considering the entire effort that we put into our business. We often forget that we are responsible for every activity in our business - including client meetings, and invoice generation.

So, charging per word did not allow me to add my whole efforts to it.

Charging per Project

Ok, I know what you are thinking. As a beginner, it is absolutely difficult to estimate the demands of the project. Often, even while charging per project, many make this mistake - They estimate the number of hours, multiply by the hourly charge and send it across.

This sounds better than the previous two ways.

But, is having a fixed charge ideal?

No. Because it still doesn’t take the variables of clients into account.

Haven’t we all had clients who want multiple revisions or often come up with changing requirements? What about clients who pay late?

Do we have to treat them all equally?

It’s okay to acknowledge that we don’t have to like all our clients. Sometimes, they are going to be nice and patient with you. Sometimes, they might be very demanding and might even want you to work those extra hours to finish their rush projects. Would you be charging everything with the same fixed rate?

Absolutely not. So, what else can we do?

Charging through Value

Value-based pricing has been gaining momentum over the last few years as it has let many freelancers achieve their dream 6-figure salary with the least number of clients.

Packaging your services with the value you provide helps your clients understand the benefits of your services for them. Instead of stating what you will be offering, explain the transformation your service will bring to their business.

If a website copy you wrote might grow their sales by $10k, and you took an hour to write it, you can’t go ask for $50.

Understand that each service and each project is different. Also, with time you might have equipped yourself with more relevant skills for that project. So, take that into account.

Depending on the client and the project, you have to vary your price range. It’s also okay if you consider the client’s budget before giving your quote. You don’t have to break down to the nitty-gritty of why you are charging that much to the client. Ultimately, the value you provide and the speed of delivery are what matters to them.

As you get experienced in your niche, the time needed to complete a task might go down and the value you offer will go up. You could be offering a quality service at a faster speed. This means you can upsell your services.

In the end…

There is no right or wrong way of charging for your services. If you are considering your service as a serious business, then let this be your wake-up call to re-think your pricing and packages. Stop underestimating yourself, be a little selfish and open yourself to cash flow.

Not every prospect out there would be willing to pay what you are demanding and that is alright. Through time, as you build a strong portfolio and a band of loyal retainer customers, you will be paid what you desire.

Until then, don’t give up.