Priced For Profit: How To Confidently Price Your Services As a Freelancer
Cha-ching! Your client just paid your invoice in full. But now that it’s in your bank account, are you looking at it and in a head spiral of thoughts of how it will sustain you for the month? Let alone the year?! Pricing your services as a freelancer is difficult. Many freelancers fall into this headspace of undervaluing their work or feeling symptoms of imposter’s syndrome, which may lead them to lowering their prices. I was there, I totally get it. I still have interested prospects who say I’m too expensive. But on a late night of working and hustling to sustain consistent clients with the price I was charging, it dawned on me that I was not protecting one of the most valuable things — my time. Here’s how you can defeat those negative thoughts, confidently charge clients your desired rates and protect your time!
The three ways that freelancers can charge clients for projects is by the hour, flat-fee or by value. Personally, I don’t recommend charging hourly but it all comes down to whether it addresses your goals and works in your freelance business. In my opinion, value-based pricing is the best way to go, not only for your overall business but your time. Here’s why.
Value is completely subjective but think of it this way. Doctors don't let patients self-diagnose themselves. Clients have a general idea of what they think they need but you possess the expertise to see the holes they are missing to patch up. Take branding for an example — your client may want red in their colour palette. But with your expertise, you know that red won’t resonate with their target audience and may lead to little to no consumers for this client. Charge clients per project that makes sense with the value you are creating and the outcomes. Therefore your client pays you an amount that they perceive as valuable and can make a return on investment, with the notion that you’ll be able to produce a great finished result.
When you charge hourly for projects, you limit the amount of profit you can earn per day. This can lead you to burning out when you try to maximize your daily profits by working “just one more hour” or stressing out because you’re counting the minutes of the work day. Time is not money and time is not value. Do you ever actually really care how much time someone spends on something? For example, cutting one wire costs $1 because it’ll take you little to no time to cut a wire. BUT knowing which wire to cut costs $999. Why? You don't actually sell wire cutting services, you’re selling the future state. You are solving a client’s pain point.
To you, your years of experience help you get the project done quickly and your client is paying you for the knowledge and tools you have such as computer program subscriptions. To the client, it would take dozens of hours to learn the necessary skills to do the same thing on top of not being 100% sure if it solves that pain point and if they’re purchasing the right equipment. What you can get done in 10 hours, may very well take the client 100 or more hours. Your talent and experience as a freelancer makes your time valuable, and you should be charging clients with this in mind. A $500 project could take you 5 hours, which means you’ve earned a $100/hr rate, but if you charge $50 per hour, you’ve only made $250.
As you try to decide on a rate for your services, think about all the business expenses you incur. Your business expenses could include your internet service, the domain and hosting services for your website, any program subscriptions, and even business courses to further hone your skills!
Don’t know how to start? Lucky for you, I created a pricing services calculator just for you!
This calculator protects your time and in turn, flushes out prices to reach your desired monthly profit. Value-based isn’t considered in this calculator as the value is unique to each project.
Figuring out pricing for your services can be tricky. In the end, do what is right for you, and don’t compare your prices to other freelancers or try to undercut them. Work towards raising your prices and reaching your financial goals! You got this, I believe in you!
