Whether you are just getting started as a freelancer or have years of it. it’s tricky to know how much to charge and what your rates should be. There is no rule, no market price.
You don’t want to charge a too high price and push your client away, but you don’t want to go too cheap yourself either. The price of your service is not about the money you want it is also about the quality of your service.
Know your worth
Don’t look at other freelancers/service provider’s pricing. maybe they are losing money, maybe they have other sources of income,
In short, you don’t know what their business model is.
Your pricing has to maintain your freelancing lifestyle. You need to price in your costs, and taxes, pension, savings, insurance, etc. And you need to be making enough profit to invest back into yourself and your skills.tools so you can get better, and thus raise your prices and work less.
How I calculate what to charge for my work
Well, I charge the value of the client’s projects and budget. but you can use this simple calculation
40 hours/week × 52 weeks/year = 2,080 hours
Your desired salary ÷ 2,080 hours = your roughly per hour rate.
Tips on Calculating Your Rates
- Do research
A significant initiative is to try to some research to ascertain what other freelancers are charging for similar add your area. If you’ve skilled freelance friends, ask them what their hourly rates are. Compare and are available up with a price you are feeling reflects your skills and knowledge, but confirm you’re competitive.
- Know your position
It’s worth having in mind that firms – which have the capacity and cost implications of staff and associated overheads – charge anything between $500 and $900 per day. As a freelancer, you will not be ready to charge anything near this amount; unless your skills are very niche and in-demand. So do your research and are available up with an appropriate figure that reflects your sole status.
- Calculate your expenses
When estimating how much to charge, it’s worth taking into account all of your business costs. That’s whether it’s the rent for your office, insurance, travel, stationery, or materials. You’ve got to cover your expenses, so make sure your hourly rate is reasonable as well as realistic.
- Consider lost time
You can’t expect to charge 40 billable hours each week, particularly as there’ll always be lost time taking care of other things like administration, invoicing, and other day-to-day tasks. Make sure you account for all those non-billable hours when arising together with your rates.
- Consider how much you want to make
Another way to work out your rates is to ask yourself what proportion you want your annual salary to be – taking under consideration your weekly billable hours and the number of holidays you want to take. Check out Your Rate – an easy online calculator that will point you in the right direction.
- Be flexible
When you start talking to clients, you’ll soon realize that one day/hourly rate won’t suit everyone. But it’s knowing charge high first and be prepared to be knocked down on price. Therefore, know your ultimate minimum hourly rate, i.e. the lowest you’re ready to go and stick to that.
- Get comfortable talking about money
Us Brits can’t bear to discuss the topic of finances, although I’m pretty sure that’s the way everyone feels. But when the subject comes up with clients, you’ve got to be comfortable, open, and upfront about what proportion you charge and why. Don’t be afraid to negotiate and have confidence in yourself, your abilities, and how much you’re worth.
When meeting a possible client for the primary time, attempt to establish their budget before you reveal your rates. That way, you can adapt your price accordingly or decide whether you’re the right person for the job. If the client is expecting to pay a ridiculously low price for some time, it is a pretty good wake-up call that you simply should run fast within the other way. You’re running a business, not a charity!
- Choose your pricing strategy
When costing up jobs for clients – you’ve got two main strategies to consider: time or project-based. Time is once you log your hours/days then invoice the client accordingly; project-based is once you calculate how long you think that a bit of labor will take and provide a fixed-price upfront. Choose the strategy to suit each job.
- Consider the unknowns
When costing up jobs, you’ve got to think about your productivity and the way much you’ll realistically achieve during a set amount of your time. It’s always best to add on an extra day or two of your time as a contingency. That way, you won’t lose any money on the job. Don’t put yourself in a situation where you’ve not budgeted enough hours/days, you’ll lose money, and that’s not where you want to be.
- Every project is different
Don’t get too worried about having a group hourly or day rate. It will inevitably vary from one project or client to a different one. Just stay conscious of your competition and the economic climate also as everything we’ve laid call at this text, and you cannot fail.
- Create a rates chart
With your rates likely to differ from one client to subsequent, create a spreadsheet to stay track. Refer to this at the end of each financial year, so you can assess whether it’s time to consider price increases. If you would like to help with raising your rates, here are some helpful tips to extend prices without losing clients.