The very first time working as a freelancer is always confusing as many freelancers don’t know how to set their rate. This, in fact, can cause some people to be victims of scammers or be taken advantage of as some employers use the lack of information against them and give them low rates.
This is why today we are giving you some tips to help you set your rate as a freelancer.
Your Experience Comes First
Experience is an essential factor in determining how much you’ll get paid.
You spent years gaining this experience and the more experience you gain, the more expensive your rate gets.
So, experience is an essential factor in determining your fees. Sometimes you will meet clients who will tell you they can get the same service for a cheaper price, don’t lower your fees when you hear that, you can’t compare yourself to someone who has one year of experience.
Determine The Pricing Model
Some freelancers work depending on two types of models, hourly, value-based, and per project. Which one best suits you?
The Hourly-based Rate:
This is the easiest model that usually freelancers prefer. You set a certain price for the hour and depending on the number of hours you worked you get paid. The only flaw in this model is that if you wanted to earn more money, you have to work more hours.
The Value-based Model:
Freelancers with high experience can use this model to set their rates and it changes with each project.
This model depends on the value of the idea and the result you give to the client not the time it takes you to deliver. You can deliver the result in a short period of time and before the deadline but the value of it is high.
Therefore, don’t worry about setting a high rate as long as your client is seeing the value of your work.
The Project-based Model:
This model depends on the amount of effort and number of hours you consume working on a project and you set the rate depending on the total cost of the project. One of the benefits of this model is that the client agrees on the budget from the very beginning, so you will be avoiding any type of hassle but you have to be experienced in evaluating the project to determine the rate or you might end up working more and getting paid less.
Things To Consider While Setting The Rate
What are the tools you will use to get the job done? Will they cost you money? You should put this in mind.
If you’re a graphic designer then you will probably need subscriptions to many tools and websites to be able to create something unique. Also, if you’re a writer you will probably need tools to help you with your grammar and SEO. Also, put in mind the taxes you have to pay.
All of these expenses should be added to your rate as a freelancer. Some freelancers also include their bills like the internet and electricity.
Ask Other Freelancers
You can seek help from other freelancers.
It’s ok to ask for help from others especially if they have more experience. If you have friends who are freelancers then ask them how they set their rates and how they came to an agreement with the client. If you don’t have friends who work as freelancers, you can use your Facebook groups to ask this question to its members and many people will help you out.
Even if you have already gathered all the information, it’s better to ask your fellow freelancers; benefitting from other people’s experiences will definitely help you with yours.
Know The Market Rate
Do some research and get all the insights and information about the overall rate in your field.
You have to study the market of your client; is it a rich market? Because this can tell you if the client can afford your rate or not. Also, study your own market; get to know the overall rate of freelancers, how they charge if they ask for a deposit and how much it is, and what is the best process to follow when dealing with a client.
Gather all the information and insights so you can form a general idea about your next step.
Set Your Annual Rate
After doing your research, you should set a goal of how much you want your annual salary to be and from this point, you can determine your rate.
When you set a certain rate then calculate how many hours you need to work to get that amount or divide it by the number of days you want to work this year.
In the end, being a freelancer means you get to be your own boss and you’re the judge of the right amount you should get from your client, so you need to be really accurate so you won’t get paid less than the effort you do.