This is a question plaguing many freelance web designers.
Figuring out how much to charge for your services is actually challenging. There are many variables when it comes to setting rates that you can stick to. Aside from this, there is also the option of setting hourly rates or fixed priced projects.
However, figuring out how much to charge for your services can help you get clients as well as provide a steady income from your freelance work.
Here’s how to figure out pricing.
1. Start by setting an hourly rate
For many freelancers, an hourly rate is a great place to start. It provides easy baseline comparison with other freelancers and is much easier for clients to understand.
Freelancers can use time tracking software to make billing clients easier. An hourly rate is a good option for freelancers who work at a steady rate and moderate pace. However, there are designers who feel that hourly rates held them back because they need to finish a product quickly.
In any case an hourly rate will give you an idea how much certain types of projects cost or how much time you need to spend on it which can be used for other forms of pricing.
2. Know your cost
Freelancers sometimes forget that work has costs. For instance taxes, utilities, rent, software and office supplies will need to be covered before you can make money.
You can either figure out the overhead cost by yourself or get the help of an accountant so that you know the baseline and start adding your profit margin.
3. Price Per Project
This is an alternative to hourly pricing. This is a preferred method of freelancers who have been in the game for some time.
Per project pricing is trickier than figuring out hourly rates but there are many ways of setting price. Here are a few points to consider:
• Check market industry rates to find out how much freelancers are charging for similar projects. If you’re a one man team, you can charge below agency standards. However, if you have a lot of experience you can charge above novice designers.
• Charge clients what they are willing to pay. It all comes down to value and how much the project is worth to them. If they come to you because of your expertise charge them how much you’re worth to show them that your work is valuable.
• Projects that require a quick turnaround time are more valuable to clients compared to something they need 5-6 months from now. Typically, projects that require fast turnaround are priced more because other projects might need bumping down. Think about scheduling to make sure all tasks get done in time.
• Along the way you will meet clients that don’t know what they need and require more handholding. This type of clients will need more of your time for the same amount of work so you should probably charge more.
It is easy to get per project pricing wrong especially if you’re new to this type of pricing. There will be times when projects will take longer and make you frustrated. If this happens frequently, perhaps you’re the hourly rate kind of freelancer.
You can use your experience as an hourly freelancer to figure out how much to charge for “per projects” since you have an idea how much time it takes from start to finish. Alternatively you can use a combination of per project and hourly rates for different types of project. For instance you can use an hourly rate for smaller projects and use per project for big ones such as those that require set up, revisions or redesign.
4. Make room for contingency
Another factor freelancers forget is to set up for contingencies during their estimate for hourly rates and per project pricing. Always consider:
• What the project entails. Are you designing 1 page or 20? Do they need writing? Photography? Always get all the details.
• Number of revisions you might need to make.
• Your rate for changes beyond this.
• Payment guidelines. How much “down payment” do you need to start a project? Or, do you prefer to pay upfront or set up multiple payments as the project progresses.
• Additional fees for late charges, other processes or maintenance fees.
As you can see, there is no magic formula for pricing for freelancers. If you price too low you might end up not making any money while pricing too high will deter clients from hiring you. Therefore you need to price somewhere in the middle.
Perhaps the best way to figure out how much to charge is to rely on your experience. It’s all about finding the balance between how much you think your time and talent is worth and your relationship with your clients. Finding out how much work they need and your value will enable you to find the right pricing strategy.
Do you prefer hourly rate or per-project basis? How do you price your services? Tell us by leaving your comments below.