You finally did it – at long last, you have established yourself as an entrepreneur!! Or maybe you have been on this journey for a long time, and you want to hone your skills and knowledge to stay at the top of your game.
So, how do you do it?
The very first step that you need to do when you are on the path of an entrepreneur is to establish your payment rates – and often, that is the hardest and trickiest part. Know this that is not exactly an easy subject, and as of now, there’s not a one-size answer that suits this question – how to set rates as a freelancer?
Ask some freelancers, and they will give you different answers to the same question – so, as a freelancer yourself, where do you even start? How do you even charge your clients?
Considering your value
If you work for some company, then all of your expenses are covered for you and that includes, taxes, licensing, healthcare, insurance, and other such essentials. Even the internet costs will be covered for you.
As a freelancer, you will need to cover all those expenses by yourself, and possibly, even more. After all, finding clients take time, and time is money – that said, you will also have to take a few minutes of your busy schedule to manage the administrative side including the invoicing.
As a freelancer, you will need to save you money for taxes, and health insurances. Under no conditions, should you undersell your value – you are a freelancer, so, you need to set such rates that will allow you to thrive, while still attracting clients.
You will have to maintain a balance while set rates and attracting clients on the other side – if your rates are too high, then, you won’t be able to attract clients, and if you set your rates too, you will be selling yourself short.
Even the well-experienced worry about their rates when pitching to the clients – in your case, the best thing that you can do is to find that sweet spot – one that is neither too high that it’s impossible for the clients nor too low that you undervalue yourself.
Experimenting with your rates
Okay, so, you have decided on your freelance rates, but before you decide to pitch your client with that rate, kindly take a minute and do some research on the typical freelance rates. There are many online sources and forums that can help you with this – if possible, be as specific as you can, for the particular area or country where you reside.
Being a freelancer is not child’s play, it’s a business – you will need to state your worth, in the clearest terms as possible. When pitching to the client, mention your worth in the proposal, and make use of the freelance contract, no matter what’s the duration of your project.
Explain to your clients why you have set that fee and what they can expect from you based on that fee. Remember, justify your rate.
If you are new to freelancing and want to gain experience, then, it’s okay to work at a low price to build up a portfolio and gain experience along the way.
But, what if you are an experienced freelancer?
Know this that ‘all good work comes with a price tag’. If you are a veteran freelancer and are providing your client with quality services, that itself is valuable and for that, you deserve compensation – after all, the client is getting the benefit of having quality work done for him without the expenses of having to get employees to work under him.
So, the rate, that you have decided to set up as a freelancer, need to be fair and reasonable – you, as a freelancer, will have to sell your clients on your skills. Architects and lawyers don’t work for free, so, then, why should you?
Flexibility is a must
Just because you are a freelancer, it doesn’t mean that you will need to set the same rate for every project that comes your way.
No matter what project you get involved in, try to set the rate by looking from the perspective of the project. Try considering setting up hourly rates. If you are a freelance writer, you can charge by the word or by the article itself. That said, if you are a designer, you can set a rate that will cover all of the services that you offer.
Take note of ‘Retainer Agreements’
As you gain experience as a freelancer, you will keep on getting clients, and from some of them, you may even gain consistent work. In such cases, you can opt for ‘Retainer Agreement’.
Getting into a ‘Retainer Agreement’ with clients means that you will be paid a certain rate in exchange for a certain number of projects per month, and depending on the agreement, you may be given a certain lump sum amount at the start of the project to cover all of your expenses.
Getting into a ‘Retainer Agreement’ is a dream for many freelancers as it means that getting into one is a sure way of having one form of consistent cash flow.
What are the other points that you should consider?
As a freelancer, there are certain things that you should consider when setting your rates.
– If, you, as a freelancer happen to get into a ‘Retainer Agreement’, you may get a deal, as it means guaranteed work and revenue for your business.
– If a freelancer like you happen to be in a ‘Retainer Agreement’, it means that you will get consistent work, and which will allow you to learn new things and even practice new skills, plus the clients will also be more lenient with you.
It’s something like an investment for your portfolio, and a one which will allow you to charge more for your work. That said, you can even charge more than your usual rate if the work needs to be done in a tight deadline.
Being a freelancer is not that easy – you will need to be on the top of your toes – and setting rates, it’s even harder. Even though no one will find a one-size answer that will suit the question of how to set rates, but with the above-mentioned points under consideration, you can grow your freelance business, and be your brand.