Freelance Pricing Guide: How much should you charge for your project?
When you start out as a freelancer, it’s incredibly difficult to decide how much you should charge for a particular project. Charge too high, you might lose the client. Charge too low, you are undervaluing your services. I call this ‘pricing anxiety’ – and I’m going to try and take this doubt and indecision away from you, once and for all.
Why pricing is hard
I’ve been freelancing for 10 years now, and I get it. It’s very hard to find the correct price point. When you first start out, and the going is a bit tough, you don’t want to lose valuable clients because your prices are too high. You need to build up your freelance portfolio and put food on the table, so every project and every dollar counts.
On the flip side, when you are more established, you don’t want to feel that you are under-valuing your services. You’ve spent weeks if not years learning new skills and perfecting your craft. You’re sure as hell not going to let clients underpay you!
So how can you walk this pricing tightrope? How can you determine the perfect price for each freelance project and each freelance client?
Let go of pricing anxiety
I can feel you waiting with baited breath for the answer that will finally reveal the ultimate pricing grid. I’m afraid I’m going to have to disappoint you. You see:
There is no correct price!
Different clients will pay different amounts for exactly the same work. There is no natural law. You’re looking for the one price that will magically value your services while not scaring away the client. Nobody can tell you what this is – you will only realise in hindsight!
You will make many pricing mistakes!
Pricing takes experience and knowledge of your client’s industry. Even when you have these, after many year’s experience, you will still make pricing mistakes. It’s simply part and parcel of doing business. Don’t make this a primary focus of your freelance work, it’s a only one factor in your overall business.
The price is the last part of the sales process and can be negotiated.
This fear that clients will be scared away when you offer the wrong price simply isn’t correct. The price is generally the last element of a sales process. If you keep losing clients, there are most likely more urgent problems with your sales process.
To make a successful sale, you need to build a relationship with the client. And once you’ve built up a relationship, you will almost always have a chance to negotiate, even if the client isn’t happy with your initial quote.
An alternative pricing strategy
I’d like to offer you an alternative approach to pricing, that takes a lot of the anxiety out of it and let’s you get on with your business:
- Realise that there is no correct rate to charge. How and what you charge is almost a game and will take experimentation and experience to get right. You will win some and lose some along the way.
- Calculate your absolutely lowest possible rate – this is the rate that will still put food on your table. I’ve prepared a spreadsheet + calculation that will help you calculate your lowest rate. Anything above this and you’re a winner. Anything below it and you will not be able to survive in the long run.
- If you’ve literally never priced anything before, then simply pick a rate that will give you sufficient income to support you. You will most likely price too low or too high – but it doesn’t matter. Mistakes are part of the process. Picking a sustainable rate will ensure that you can build your portfolio without getting into debt.
- If you’re generally happy with your existing rate, then keep it. Focus instead on more important things such as a marketing routine, serving your customer and improving your sales technique. Get better at doing business and you will naturally increase your income. This will pay back 100-fold, whereas a 10% increase in your rate will just give you a bit more money in the bank.
- If you’re unhappy with your existing rate or struggling to make ends meet, then you must increase your rate. Rather than take tentative steps, I’d suggest doubling your rate at your next client meeting. While this may sound risky, you will be surprised by the results – and you can always negotiate downwards if necessary.
- Don’t get locked in to long-running contracts if you’re unsure of the rate. Make sure you leave room to renegotiate at a near point in the future. The easiest way to do this is to break down projects into shorter milestones and price each one afresh when the time comes.
Perhaps this wasn’t quite the advice you came here for – but I hope you’ll leave with new, positive ideas to improve your pricing strategy. Let go of pricing anxiety, serve your customers and continue developing your freelance career. Best of luck and let me know how you get on!