The Freelance Fees Guide
One of the most difficult things to figure out as a freelancer is how to price freelance work. Especially when you’re new to it, knowing how to price yourself as a freelancer can be a surprisingly daunting task.
To know how much to charge as a freelancer, you need to take 3 things into account. Your experience level, the average price for that service in the industry, and how much time it will take you to complete the service. By determining these three things you’ll have a clear picture of how to set freelance rates.
In this article, we will go into the specifics of getting these three numbers together. We will also cover how to use them to know how much to charge for freelance work.
How Much do Freelancers Charge per Hour
If you’re used to working a regular 9-5 type job for an employer who provides a regular paycheck, you may be wondering what is the average freelance hourly rate.
Freelancers usually don’t charge by the hour. Instead, they charge by the project.
You will need to break this 9-5 mentality to be a successful freelancer. As a freelancer, you get paid for results, not the time you spent.
If you can accomplish great work faster, then you can make more money quicker. This allows you to fit in more work overall, thus increasing your earning potential. This is one of the great benefits of freelancing.
Instead of charging for how long it takes you to write a paper, you’d charge for how many words were written, or a pre-agreed upon amount irrespective of length.
Let’s say you charge $20 per hour to write an article. That article turns out to be 3,000 words and it took you a total of 3 hours. You’ve earned $60.
If instead, you charged $0.03 per word, you would have earned $90.
But what happens if that took you 4 hours? It’s still $90 earned at $0.03 per word, and the hourly rate still falls short at only $80.
An hourly rate essentially pays you to work slower. Let’s extrapolate out for a longer day.
Let’s say you work for 6 hours. It takes you three hours to write one article of 3,000 words, and three more hours to write a second article of the same length.
You’ve now worked 6 hours and written 6,000 words today.
6 hours of work will pay you $120 by the hourly rate of $20.
At $0.03 per word, however, you’ve earned $180. That’s half again more than the hourly rate.
How to Calculate Your Freelance Rate
When determining how to price yourself as a freelancer, you’ll need to take three important points into consideration.
What is your track record of success in this service? How can you prove to your client that you’re great at what you do and you can provide the service they’re looking for?
When starting out with freelancing, it can be difficult to prove your experience level. You may not be experienced, or you may just not have a portfolio. Either way, you’re going to have to factor this into your overall price.
If someone is willing to take a chance on you in the beginning, it may be in everyone’s best interest for you to give them a great deal.
This helps make them a happy customer that’s likely to give great word of mouth references to their friends. Happy customers also return for repeat business.
This also helps you to alleviate some of the stress that charging a premium may place on you while you’re trying to build your first professional portfolio pieces.
Once you have some proof in your portfolio, you’ll find it easier to charge more and more for your services. All it takes is showing your potential clients the kind of results that you can deliver for them.
Average Price in the Industry
You’ll need to figure out what it would cost if your customer went to any of your competitors instead. You should know the prices of several similar services available in the vicinity.
You don’t want to base your service entirely price and try to race to the bottom line. That’s not a winning long term strategy.
Instead, you want to have an understanding of the similar businesses’ prices to help you determine what the pricing spectrum is. If the highest price in the area is 50% less than what you charge for a similar service, then you can expect potential clients to be put off.
If you know you provide over and above service and value, then price yourself to reflect that. Still, you’ll want to be aware of what the competition in your market looks like.
How Long Will it Take You?
The final piece to the pricing freelance work puzzle is the length of time the actual service or work will take you. A job that requires longer input to finish should be worth more.
Keep in mind, however, that you’re not an hourly employee and you’re not charging by the hour for your work. You’re charging for the completed project. This is where experience once again comes into play.
When you’re less experienced in a particular skill, it will take you longer to complete. This is particularly true when trying to do your best work and perform at a high level.
Once you have lots of experience in your skill you’ll be able to complete the same amount of work in a much shorter time frame. This will allow you to make more money, faster.
Just remember that in the beginning, you’ll be making much less per hour because you won’t be able to work fast enough at your new skill.
Try to come up with a modest hourly earning figure which you won’t go below. This will be your bottom line basis for how to calculate your freelance rate.
Putting it Together – How to Determine Freelance Rate
Now it’s time to use the figures we’ve got to determine what we actually charge. You should have already figured out what the average prices in your industry for related skills. This will give you a range of what could be considered “reasonable” prices for the service.
Using the prices your competitors are charging, set a lower and upper limit for what you could realistically charge. These are the lowest and highest prices that others are charging to perform similar services to what you provide.
Next, estimate how long you think the entire project will take you to complete from start to finish. This will help you determine an approximate hourly rate. This is not a rate you’ll charge, this is just for your own reference.
Multiply the number of hours you think the job will take, by your lowest hourly rate that you’d be willing to work for. This number becomes the new bottom of our pricing range.
You should now have a range of rates from the lowest hourly rate you’d work for to the highest amount your relevant competitors are charging. Now we factor in your experience level.
If you are less experienced in your field, then you are going to price yourself on the lower end of the range you just determined.
Very experienced practitioners would instead price their services towards the higher end of this range.
Part of what allows someone with more experience to charge more is having more proof of their work. Until you’ve built up a portfolio of high-quality completed work and raving testimonials there’s no reason for someone to believe that you are worth any arbitrary rate of pay.
The other main reasons that experience allows you to charge more for your services are confidence and competence. When you truly know your craft, it comes across in the way you speak about it. Your customers will feel it from you and be calmed by your understanding of the subject.
With competence in your skill, you can effectively answer any questions and calm most problems before the client even brings them up. This immediately disarms them and lets them know that you’ve done this plenty of times before. Now they feel reassured that you are the person who can solve their problems without adding any new ones.
We’ve covered the formula, but to make it more clear how to price freelance work, let’s dive into a few specific examples.
What to charge for freelance writing
We will use freelance writing for our first example. So, what do freelance writers charge?
If you peruse a few job boards and content mills you will see a range of prices. On the low end, it’s not uncommon to see jobs posted that offer $10 per 1,000 words. This is particularly true on the content mills like Fiverr.com.
You’ll also see some jobs priced at $50 per $1,000 words. Pretty big difference.
On the same job boards but at the higher end of the pay spectrum, you’ll see some jobs offering $0.10 per word, which equals $100 per 1,000 words.
While high-end freelance writers can make many times this, these numbers are a great place to start from. If you’re looking for clients in this way, you’re likely not on that level yet (neither am I!).
We can also assume that for right now the $100 per thousand words is probably a bit out of a beginning freelance writer’s range. So we’re going to start with a range of $10-$50 per thousand words, based on the average prices in the industry.
Next, we need to determine how long we think it will take us to write 1,000 words. This is an area where experience will become a major factor. For someone who writes thousands of words every day, knocking out a thousand words takes no time at all. On the other hand, if you’re newer to writing and don’t have the flow yet, it could take quite a while for you to complete 1,000 words that are proofread and ready for submission.
For the sake of this article, we will keep the math very simple and assume it takes you one hour to complete 1,000 words of writing.
Our final step is to set our lowest hourly limit. In many places now, the minimum wage has reached $15 per hour. Let’s say we’ve decided that we don’t want to work for less than $20 per hour.
If every 1,000 words takes an hour to write and we want to earn at least $20 per hour, then we need to earn $20 per 1,000 words. Our pay range based on the industry was $10-$20 per 1,000 words, so our figure of $20 falls perfectly in line.
Remember that $20 per 1,000 words is our lowest working figure. However, for a new writer without a hefty portfolio and experience, it’s best to stick to the lower end of the range. Once you have a proven track record you can start asking for more.
Let’s take the very top level off our range since we’re not likely to get hired at that rate without some social proof. This gives us a final range of $20-$40 per thousand words.
This is a fair price that will adequately compensate you for your time and experience level, while also being reasonable to your client.
Content mills are not the best place to find freelance writing clients. If you want to learn where and how to find them a much better way, read How to Find Freelance Writing Jobs Online.
Let’s take another common freelance pricing question: what to charge for freelance graphic design?
The formula is still the same. First, we determine what other people in the industry are charging.
Now with graphic design, you’re likely going to have to do this same equation for each service you’d like to offer.
For instance, ebook covers are not worth as much as custom images for facebook ads. Websites are worth even more than that.
Repeat this pricing process over for each major service you’d like to offer. Or, you can specialize in one service that you think can provide you with the most consistent work, or the highest pay. The best part about freelance is that the choice is always yours!
Let’s go with ebook covers for this one.
If you look on Fiverr, you’ll see a range in prices from $5 to $60. There are a few that are even higher, but they are very established with a longstanding record. With such competition on content mill sites like Fiverr, you’ll need to get established before you can hope to charge well above the rest of the crowd.
The $5 book covers are clearly built with generic templates. They all look similar, and for the $5 you will receive just a basic front cover.
The higher prices are for packages that include more. Most designers on content mills will offer several packages in tiers. Higher tiers may include one or more mockups, back cover and spine, additional design choices, etc.
If you’re comfortable using a drag and drop book cover builder then, by all means, feel free to charge $5 and make 2 minute covers.
If you want to really design awesome covers that look great, let’s start a bit higher.
Let’s assume you can knock out a great cover in 30 minutes. If we need to earn the same $20 per hour minimum as the example before, then the least we can charge for 1 book cover (30 minutes of work) is $10.
Of course, that’s the basic package. We’re hoping they want a better package, so we have to make that lucrative.
Let’s include a 3d mockup and a back cover in a package that’s $20. This will probably take an additional 15 minutes, bringing us to $20 for 45 minutes work.
Perhaps we include an even higher tier package with 3 3d mockups, a full cover (front, back, spine), unlimited revisions, a choice from 3 stock images, and 24-hour turn around time. This package is priced at $40.
You haven’t added much workload. 60-90 minutes should finish this project and you’ve earned $40. You’re still within the average for the industry, and you’re above your minimum hourly earning requirements of $20.
As you gain experience and a large portfolio of successful projects, you will be able to increase your prices. Eventually, if you create some top-selling ebook covers, you could be part of the select few freelancers who are able to charge hundreds of dollars for a few hours of work or less.
Knowing how much to charge for freelance work can be difficult. Now you know the formula that you can follow for how to figure out freelance rate every time.
Experience Level / Average Price / How Long it Will Take
If you have any questions about pricing your freelance work or getting started with your own Job Free lifestyle, then please reach out to me directly at Dean@TheFreelanceResource.com.
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