Quoting for work and negotiating fees comes way down on most freelancers’ lists of freelancing highlights. That’s not surprising, because there’s always a tension between charging what you’re worth and remaining competitive, particularly if your industry is of a type that can hire globally.
It’s also tricky because there are many factors to consider when deciding on your price; having an hourly rate you never falter from is over-simplified and could end up costing you money.
Factors to Consider When Pricing Your Freelance Work
Complexity and Responsibility
How complex is the project and how much personal responsibility will you be expected to take? Will you have to liaise with or manage other staff or freelancers, and coordinate their output? Clients’ expectations and requirements vary hugely, so ensure you know exactly what’s expected of you – and adjust your fee accordingly.
Some tasks may be easier and quicker than others, so consider if you need a range of hourly rates or if a project price is better. Also bear in mind that some tasks are easier, yet take a similar amount of time. Proofreading, for instance, is easier than proofreading and/or editing; but it can’t be done in half the time because both tasks share a minimum time factor – the amount of time taken to physically read through and alter the text.
Time Required for Completion
If you’re not charging by the hour – and there can be sound reasons not to – then you need to take the time to understand exactly what’s required and make an accurate estimate of the time the project will take. This is particularly true if it’s the type of project where your client is likely to send back your ‘completed’ work for changes.
If a large project ends up taking twice as long as you estimated, your earnings will take a significant hit.
It’s reasonable to charge extra for urgent work, particularly as it may mean you’ve had to shift other work around or work unsociable hours to get it done.
Your Track Record
Your relevant qualifications and proven experience, expertise and reliability can – and should – make a difference to the price you charge. If you had worked for a company for 20 years and risen up the ranks, you wouldn’t expect to be still paid the same rate as a newly-employed office junior.
If a client quibbles and mentions they know people who would do it cheaper, politely remind them that they’re likely to get what they pay for!
Having said that there are valid reasons to charge more for certain projects – or charge more than other, less experienced or knowledgeable freelancers – you do have to consider the market and the competition. Your price can’t be completely out of touch, but competitive for what you’re offering (all that experience, expertise and reliability – remember?).
Don’t try to compete with those who try to get as much work as possible by charging ludicrously low rates. If they want to work 70-hour weeks for bananas, let them be monkeys!
Can you claim for expenses such as phone calls, travel, entrance fees, paid access to journals etc. separately, or do you have to factor these into your project price?
The Freelance Factor
Finally, the freelance factor. The mere fact that you’re a freelancer means you need to charge more than someone employed to do the same work. Suggestions as to how much more you should charge range between 10% and 40%. You need to work out what’s right for you.
If you think I’m nuts and that I’m asking you to price yourself out of the market, consider these points:
Can you guarantee what your earnings will be in 4 months’ time? Probably not. You have no job security beyond your current contracted projects. If no work comes in three months from now, how will you pay your bills?
- If you’re ill, be it for a few days or a few months, how will you pay your bills?
- If you need to take absence to cope with a family illness or crisis, how will you pay your bills?
- If you need paternity or maternity leave, compassionate leave or just a holiday, how will you pay your bills?
- This is your gross, before-tax wage. HMRC are going to take a chunk of it for tax and national insurance. Know how much – and always bear in mind that what you’re charging is not your ‘take home pay’.
- You are your own business and have costs. Office supplies, equipment, perhaps the rental of a workspace, subscriptions, training, the internet, your energy bills, etc. No business can operate or price their services and products without considering their overheads, and nor should you.
- Who will put money aside for a pension pot that pays out £20k a year (the very least you will probably require when you retire) if not you? You have no employer to contribute, and to achieve £20k a year, financial advisers say someone who starts saving at age £25 needs to put away a scary £246 a month.
So, next time you prepare a quote for a project or think about renegotiating your rates with a regular customer, think carefully about what you’re being asked to do, what your talents are worth and what your money needs to cover. Freelance should never mean free work.