Freelance finances: how much are you worth?

When I started freelancing, I often felt like I was involuntarily put on a particularly cruel episode of The Price Is Right. Not as one of the participants, but as one of the objects whose price is being guessed. 

And boy, do some people get it wrong. Not just potential clients–even I was clueless on how much was a reasonable amount to spend on…well, me?

In this article, I’ll cover what to keep in mind when determining your price. Not just the market (because I know you’re more than capable of googling average rates), but more importantly the mindset—and the way you can communicate your prices effectively. 

Because it is one thing determining your price, but it’s just as important to get your quotes approved by your dream clients. So, let’s get this bread.

Price: should you take it personally?

Here’s the crux: freelance pricing could be easy, on paper, if we would simply follow ‘the market’. It’s how companies determine the price of anything else: salaries of employees, how much they spend on rent, software, you name it. 

Why is it so hard for freelancers then? Well, there’s another factor at play here: you’re trying to price a person. For freelancers, putting a price sticker on their services doesn’t just say something about the market, it says something about them. And that’s why a lot of us undercharge, grossly. We’re humble. Shy. Or not, because some of us were born with a lot more courage (whether that’s justified or not) and can charge insane amounts. (Good for you!)

And there’s no way around it: you should take your price personally. Because you can't just price your hard skills alone: there’s worth in your soft skills as well. A smooth communicator who speeds up any process within any team just by being direct, kind and efficient saves a company a lot of money—so put a margin of that in your price!

Plus, when you start building a strong personal brand, a strong reputation (cue Taylor Swift) and make a name for yourself, there will be value in working with you simply by being associated with you. Let that reflect in your price as well. 

Use ‘no’ as a guiding light (when it comes to quoting)

Unfortunately, I can’t tell you whether you can add 5 or 55 to your price for your reputation, or if your specific set of soft skills is worth 80 an hour or 100. 

What you will have to do to find that out, is quote to clients. And aim high. 

It’s far more comfortable and normal to have a conversation about what you can do to lower the price when you get a ‘no’, than getting a ‘yes’ far too quickly and realising you’re missing out, and want to negotiate for more.

So don’t see ‘no’ as you making a mistake, but as a guiding light bringing you closer to the price that is correct for you. Both of you.

Now–of course, some clients will just want it cheap and quick, so their ‘no’ isn't nearly as valuable. But do listen closely to the arguments that clients you'd love to work for have, to find out whether there’s wiggle room, or what is more realistic in their eyes at this point in their business–and why. 

Don’t just walk away from the negotiation table, even when it is clear you won’t get the job. There’s no harm in asking them how they determine the budgets for their projects. Just let them know you’ll use this knowledge for future reference to tailor your services even better!

Don’t just yell out a number

One key tip? Don’t name a price before you know what the project entails. 

‘’But, how do you have an hourly rate or day rate then?’’

Ah, this is where nuance comes in. You will have a number for both: but it’s a starting-price. So, whenever a client asks you for a price indication but the project is vague or not even mentioned, you can respond with something like this:

‘’Thanks for your interest in my services! My rates start at 90 an hour or 600 for the day. I’d love to hear more about the project and give you a tailored price.’’

That way, you don’t sell yourself short when later on you find out that the project is a lot bigger or more complicated. 

(And clearly state the scope of the project in your quote. Y’all know how it be sometimes.)

A little daydreaming about day rates

Once upon a time, a client who had always paid me by the hour, informed about my day rates. And I panicked. 

Would it be fair to just multiply by 8? I felt it wouldn’t be: I rarely work 8 billable hours a day. 

Oh, to be that young and innocent again. Because now I know this: if someone asks me about my day rate, it is at least my minimum hourly rate multiplied by eight (rhymes like these are included in that price). 

Because sure, realistically I would make more that day than I would on a regular day. 

But why the heck would you price yourself based on the worst-case scenario (not being able to bill 8 hours that day, but just 5 or 6)–and not based on the best-case scenario? Aren’t you the best-case freelancer?

This also has to do with the worth you want to communicate to your client. 

And in some professions, I learned, there’s such a thing as half-day rates. I am part of a Facebook group for professional videographers (even though I’m a copywriter, don’t ask), and they often ask each other for advice on this. That’s where I learned an interesting approach to quoting for half a day’s work: you quote 75% of your full-day rate.

Because realistically, that half-day you will have left, will not really be a half day. Your brain will be almost done by that time, and you’d be lucky to even have the energy left to do some admin. So count for that as well.

How you doin’?

What came first: the chicken or the egg? The freelancer naming their price, or the client mentioning their budget?

It’s the most annoying ping-pong game of questions to participate in, but often freelancers don’t ask potential clients what their budget is or what price they had in mind. 

My advice? Take that shot of espresso and just ask. But before you do: research the client and their market a little bit. Has there been funding? Is the market growing? Did they really have a team-weekend in Nice in a five-star resort? These things will give you an indication of how high you can fly. 

But, here’s a tip: Don’t ask: ‘’What budget do you guys have in mind for this project?’’

Instead, approach it like this: ‘’What investment are you guys willing to make to reach goal X?’’

See what I did there? You don't talk about yourself as a cost, but as an investment–and you link it to what you can help them achieve. That will make it a lot harder for them to hit you with a ‘’LOWER!’’, and you also immediately show that you’re result-focused. 

Ask around

If you’re not sure whether you are charging enough, and your clients aren’t of any help, talk to fellow freelancers. There are Reddit threads and Facebook pages for every weirdly specific niche, in every country. 

By simply starting the conversation and sharing with other freelancers, we won't lose anything. If anything, this can help all freelancers up their prices and earn what they deserve. 

Passionfruit Specialists have their own little safe space where they can–and do! — have these conversations: in our very own Slack channel. If you want to know more, you can sign up to become a Specialist here.

The not-so-magic formula: 

So, to summarise, here’s what should be in your price.

• The state of the market:
  • How well your potential client is doing: don't just look at the market of freelance copywriters, look at what the market of your potential clients is doing. If it’s booming business for them, it’s time to charge more.
  • Inflation: got gas recently? You might be entitled to a hug, and to an increase in your rates. Clients who don’t understand that, well…

• Your costs: the costs it takes you to run your business, but also the rent you pay, the food you eat, the fun you have: how much do you need to live comfortably?
• Your hard skills: with years of experience, and skills gained, it's nothing less than normal to charge more.
• Your soft skills, and your personal brand. 
• The project: what is this worth? What is the brand going to earn when you do this right?

—-----

= Your starting rate. 

Will we see you in our Slack channel soon, discussing rates to make freelancing more fair to everyone? I hope so.