How Expensive is your Needle? Pricing Out Your Freelance Work

Pricing Out Your Freelance WorkSo you’ve gotten started in the freelance world.  Great!  You’ve started to apply for jobs.  Wonderful!  You’ve decided on how much you will charge for your services.  Wait.  You haven’t?   Well, it’s time to fix that.

Many new freelancers operate under the assumption that what they get paid is dependent on what the customer is willing to pay, and whether or not the customer can find it somewhere else cheaper.  And while budget considerations should certainly be a factor to consider, there are other ones to consider as well — such as your time, your energy, and this little thing called being able to make a living as a freelancer.

When it comes to pricing, most new freelancers fall into a few different “traps”:

  1. Low Prices Make Me Competitive — Umm, perhaps, but not in the way that you want to be.  Content mills, sites like Fiver, or other websites that sell your work for cheap do you absolutely no favors.  Why?  Simple — when you deliver high-quality work for pennies on the dollar, your client will expect it, and you’ll have to take on more and more work just to make ends meet.  That leads to burn out.  Not good.  Plus, there are literally THOUSANDS of people out there perfectly willing to churn out work for little or no pay.  I’m not entirely sure why, but there are.  Do you really, really want to compete in that type of market?
  2. Only Veteran Freelancers Can Go for the “Big” Clients — Absolutely not.  Simply put, if you have the skills to get the job done, there is absolutely no reason why you can’t go after the big fish.  Just make sure you can deliver on what you promise!
  3. If I charge too much, I’ll price myself out of the market!  Well, that depends on which market you’re aiming for.  Sure, if you want to try competing with the low-paying content mills, or other such websites or companies, chances are if you charge a reasonable rate, you will.  However, if you want to compete on a different level, dare I say on the professional level, having a reasonable rate is not only expected, it is encouraged.

That’s All Well and Good — But How…?

Now let’s get down to the brass tacks.  How do you determine how much you are going to charge for the services you provide?  While the details differ between the different types of freelance work, for the most part, I’ve found the basic steps are these:

  1. Determine the time spent for a certain task.
  2. Check with professional organizations and competitors for a range of hourly prices or flat fees.
  3.  Now- let’s pretend for the sake of argument that this is your only client.  How many projects will you have to complete to make a living?  At what rate?
  4. Whatever that hourly rate or flat rate is, take it, and tack on an extra 50% for taxes, fees, etc.
  5. Recalculate your flat rate and hourly rate accordingly.

Here’s an example:

My task is to write a 500-word blog post explaining how to cook a turkey for Thanksgiving.  I find out from the client that my intended audience are students at a culinary school.  Therefore, I will want to write it to reflect their knowledge base and add to it.  The client also wants me to use specific concepts such as braising, temperature control, and flavor profiles.  The client wants the writing to be at or above an 11th-grade level.

Factoring in time for research, writing, and editing, this single task will likely take me four hours to complete.  So I check out the Editorial Freelance Association’s website on editorial rates and find what I think would be the equivalent of what I am doing in this project.  In this case, the category of Writing – Technical/Trade seems to fit quite well.  The hourly rate is between $50-$60 per hour, and the per word rate is between 45 cents and 55 cents.

Now for me to support my family, I need to make about $600 a week.  That means that if this was my only client,  and if I charged the minimum hourly rate, I would have to complete three projects a week — (three projects at 4 hours each equals 12 hours, and 12 hours at $50 an hour = $600.)  Three projects a week doesn’t sound too bad — so my hourly rate is $50, right?

Not so fast.  Remember, at least here in the United States, the taxman will want his cut as well.  Add to that various fees and equipment maintenance costs, about a third of my weekly income is going to be taken right off the bat.  So that $600 I’m being paid is more like $400.  And assuming that I want my business to be profitable, I’m going to want a little extra money at the end of the day, right?  Just in case something happens.  So this is where the extra 50% comes in.

So I add $300 to my desired weekly income.  That brings me up to $900.  If I charged the minimum rate of $50 an hour, I would have to work eighteen hours, or do 4.5 projects per week.  Obviously, I would round that up to 5 projects per week.  Still doable, of course, but that doesn’t leave too much room for quality time with my family.  So lets look at the other hourly rates:

In order to make $900 a week at 4 hours per project:

At $50 – I’d have to work 18 hours  — complete 5 projects

At $55 – I’d have to work 16 hours — complete 4 projects

At $60 – I’d have to work 15 hours — complete 4 projects

So in this case, you can see that raising my hourly rate, doesn’t really affect things all that much.  If I go to the max hourly rate of $60- I only get back about 4 hours in the week.  So in this particular case, I would probably split the difference and offer an hourly rate of $55 dollars.

$55 an hour for a Blog Post?!?!  That’s Insane!

Now, I can hear a few of you out there shouting “But no one in their right mind would pay me $55 an hour to write a blog post about cooking a turkey!”  And yes, if that’s all you were doing, you would be absolutely correct.  But that’s not all of what you’re doing.  Your work is providing not only a great blog post, but also giving back time to your client that they can spend however they wish.  You’re providing them with another chance to gain new followers and interact with those people who are already fans.  You’re giving them one less thing to worry about — and trust me as a business owner, there is already plenty to worry about.  So really, you’re not selling a blog post, you’re selling them a little piece of their life back.  If that’s not worth $55 an hour, I don’t know what is.

But, if you’re still concerned about the client scoffing at the price, even after you point out the advantages, there are things you can do to “sweeten” the deal without sacrificing your rate.  Here are a few of the ones my clients have liked the best:

  • Buy 4 projects and get the 5th one free.  (or use whatever numbers make sense to you).
  • Refer a friend and get 10% the total cost of the next project.
  • Include a “Not to Exceed” or NTE clause in the contract.  Basically, offer a dollar amount that you won’t go past – even if your more hours to complete the task then expected.  Just make sure that this NTE does not include new tasks– and watch out for project creep!
  • Offer a set number of revisions free of charge — no questions asked.

So That’s It, Right?

Ok- so we’ve got an hourly rate for the project.  Does that mean there is no room for negotiation?  Honestly, that’s entirely up to you and the client.  If you feel that working with your client’s budget will get you more work, then consider it — within reason.  Also, be sure to take into account the other demands on your life.  If you really only have the time for two projects a week, then don’t try to sell them four.  Over-selling is always a bad idea in my opinion.  It just leads to stress for you and disappointment for the client.

Deciding what to charge, and how to go about charging it depends on a great number of factors in the freelance world.  What I’ve described here can give you a good framework and foundation to build on.  Don’t be afraid to go outside these parameters if you feel the need.  I have one freelance colleague that charges $40/hour for developmental editing — well below the industry standard of $45 per hour — but she makes it work for her.  Just make sure that you don’t sell yourself short in the process.

© 2017, Laura Seeber. All rights reserved.

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