Freelancing is a growing sector, covering a huge range of services from digital marketing, blogging, design and development, just to name a few. As a result of the recent pandemic, more people are turning to freelance and side jobs as a way of earning extra income or recovering some of the income lost through furlough, job losses and redundancies.
One of the most common questions asked is ‘What should I charge for my services?’ and it is understandably a hard question that is influenced by a number of factors. We are going to explore these in more details below to help you make an informed decision when you set your prices.
Job Comparison
Freelancers don’t get the convenience of having readily-available industry pay evaluations, although, with the growing number of freelancers, the data is becoming more accessible. Fortunately, most freelancers are pleasant people and are happy to share their journey with a fellow self-starter including the experience they hold, the rates they charge and the extras they take into consideration. Just remember to take into consideration where they are located in the world (if talking to a freelancer from a different country) or even in a distinctly different region as the cost of living can cause their rates to be higher than yours need to be for a local audience.
Essential Outgoings
Deciding your rates based on your essential outgoings can often be the most relevant method to your individual needs and makes a great starting point. Work out your monthly or yearly essential outgoings including food bills, heating and electricity, rent/mortgage and council tax, travel and communication costs and then work out the cost of this as an hourly rate based on 40 hours a week. A monthly example;
Rent/Mortgage – 400
Electricity – 60
Gas – 40
Phone & Internet – 40
Food – 300
Council Tax – 100
Travel – 150
Total – 1090 per month
1090 / 160 hours = 6.82 minimum cost per hour (based on a 40-hour working week).
This way you know you cannot charge less than at least £7 an hour to ensure your essentials are covered but any extra over can be considered as bonus income.
Experienced Based
Once you’ve got the minimum charge covered, it’s time to look at what you are worth and this comes down to experience, knowledge and the ability to apply it. Applying knowledge/experience is important as someone may be amazing at their job as they are able to apply their knowledge but they don’t hold many years of experience so they aren’t ready for all the twists and challenges clients are likely to throw at them. If you are pitching for a job, don’t just try to undercut a potential competitor, be honest about your experience and your ability and establish trust in order to negotiate the right fee.
Not Just an Hourly Rate
Price per hour is a great starting point but it isn’t going to be the only way or even the best way to price every job. Some work will be project-based or will be ongoing, some work will require quick turnarounds or for you to essentially be ‘on-call’. Hourly rates for these types of working conditions can quickly put clients off and leave you potentially underpaid for your efforts. Look at jobs as a whole and to what purpose they need to service. If a piece of work is going on to generate income for the client (such as a t-shirt design, landing page copy or an advertisement) you are completely justified in increasing your rates, just remember not to be greedy.
Venturing into freelancing is exciting, there are no stuffy office rules to abide by or unsightly uniform and you can set your own working hours, but getting started can be tricky. Most freelancers are guilty of undercharging for their services and everyone has been taken advantage of at some point during their freelancing career but by being informed, standing firm and understanding your worth, you can find success.