Day 8: Set Your Freelancing Rates

Where is going the stock market ?????

This is Day 8 of 31 Days to Start a Freelancing Business (or Make Yours a Better One). Click hereto read Day 1.

Now that you have a menu of freelancing services, the next step is to decide on how much you want to charge for each one.

By the Hour vs By the Job

In general, freelancers charge either by the hour or by the job. You may want to decide on this first.

As I’ve said previously, I prefer not to charge by the hour. My reasons for this are:

  • I tend to work fast.
  • The length of time it takes to complete a task is not the only indicator of how complicated or difficult it is. I could just be distracted or unskilled.
  • The number of hours doesn’t take into consideration my expertise in performing the task.
  • Neither does it consider the value my client will get from my work.

In other words, I find charging by the hour to be too simplistic.

I take an eclectic approach, where the cost of each service is first determined by my hourly rate multiplied by the number of hours it would typically take me to complete the task. And then, this figure goes up or down depending on a number of factors. You can read about the details of this approach here.

But that’s just me. You may feel more comfortable with charging by the hour. It’s totally up to you.

To Post or Not to Post

Once you’ve set a price to your services, the other question is: should you display your rates or not?

I do. I’d like my prospective clients to know right away whether they can afford me or not. Besides, when I am looking for a freelancer, I want to know right away if they’re out of my league. In fact, if a service provider doesn’t publish his or her rates, I get frustrated and I don’t even bother to ask. I just move on to the next one.

As Naomi Dunford says, “Nobody likes to feel poor.” And when a prospect contacts you and then finds out they can’t afford you, they feel poor. Not a good start.

On the other hand… I now find that performing the same task can have varying degrees of complexity, depending on the specifics of each client. For example, I find it much easier to write about certain topics than others.

I may be changing my approach soon. I won’t remove my rates altogether from my site. But I may indicate a ballpark figure, or a minimum rate, and request a prospect to give me details so I can give a quotation. What do you think of that?

Further Reading

Many blog posts have been written about the issue of pricing freelance services. If you have time, you might want to check out:

1. This list of blog posts about pricing, from FreelanceSwitch

2. How to Set Your Freelance Rates (An Overview) by my freelancing friend, Laura Spencer, over at FreelanceFolder.com

3. 12 Realities of Pricing Web Design Services, was recommended by James of MenWithPens.ca. It applies to all freelancers, not just designers.

These are just a few because I don’t want to overwhelm you.

Got pricing suggestions you want to add? Please post them in the comments below.

Lexi

Creative Commons License photo credit: pfala

13 Responses to Day 8: Set Your Freelancing Rates
  1. Laura Spencer
    October 8, 2009 | 12:19 pm

    Good post!

    I think that you and I (and a few others) are in the minority by posting our rates.

    I still think it is a good idea for the reasons you state and others. I recently saw a way of doing this that I’m think about implementing – using the phrasing “rates start at. . .”

    This give the client an idea of whether they can afford you without locking you into a price that may be too low for extremely complex work.
    .-= Laura Spencer´s last blog ..How To Build The Ultimate Job Finding Dashboard with iGoogle =-.

    • Alexis
      October 8, 2009 | 1:17 pm

      Hi Laura,

      Excellent suggestion! That’s exactly the solution I’m looking for. Thank you!

  2. Chris Anderson
    October 10, 2009 | 12:26 pm

    I did something like you are talking about with my article/blog rates. I put price, but also mentioned that I’m flexible and that price isn’t set in stone one way or another.

    I prefer the project payment as well though. I base my rate on my experience and how well I know I’ll be able to do the job. It seems fair to me.
    .-= Chris Anderson´s last blog ..Friendly Competition, It’s a Powerful Motivator =-.

    • Alexis
      October 10, 2009 | 4:05 pm

      Great idea, Chris! I wish I had thought of putting my rates that way earlier. I’m going to change my rates page when I increase them … sometime soon.

  3. sarah
    December 3, 2009 | 12:12 pm

    Ever since I posted my rates, I get more inquiries and jobs coming my way. I think people are happy knowing what the rates are – otherwise it’s all very ambiguous and turns off many potential clients. Posting rates to me is professional and up front – and clients all like that!

    Thanks for your blog! I enjoy reading it!

    • Alexis
      December 3, 2009 | 12:37 pm

      Awesome, Sarah! Goes to show prospective clients really want to know what they’re getting into before they even contact us. Thanks for sharing!

      Lexi

  4. Nikki
    August 24, 2010 | 1:12 pm

    I really like the idea of posting rates because then clients can’t say that they were quoted something cheaper particularly when you have “rates starting at…” right on the website.

    The really difficult thing for me is that I have barely begun freelancing so I am still fighting with the idea that my work is worth that much.

    I see that there are many designers who are better than me and some that are not as good as I am so I guess its a matter of practice for that part.

  5. Gabe
    September 10, 2010 | 12:19 am

    I’m somewhat of a freelancer doing web design and tech support, and I was always confused about why many tech support companies don’t post their rates. Then I heard the argument that plumbers and car mechanics don’t post their rates because they charge according to the job, therefore computer technicians shouldn’t post their rates either.

    That sort of makes sense, but I feel the same as you do about not knowing the rate up front – I feel frustrated and don’t want to go through the hassle of asking someone how much they are going to charge me for their services. It also feels like they’re hiding something, or that they will charge in unpredictable ways.

    I’ve always posted my rates and will continue to do so. Thank you for the great article!

  6. Meg Stewart
    January 21, 2011 | 12:02 am

    I’m currently transitioning my computer instruction business to a freelance business which highlight my freelance writing and internet related skills.

    I just wanted to say that I’m reading through your 31 day course each day and the structure is so helpful!

    I’m a little behind (I’m on Day 3) as far as implementation because I’m booked with freelance clients right now(Yay!), but I’m confident this is just what I needed to help me make this transition.

    I’ve helped others do this for their businesses on occasion, but was procrastinating doing the same for mine. Thanks so much for sharing your method!

    • Alexis
      January 21, 2011 | 8:56 am

      @Meg Stewart – You’re very welcome! Thank you so much for your feedback. I’m so happy to hear about your success. Do keep in touch :-)

  7. Felicia Hudson
    January 27, 2011 | 7:32 pm

    Great site Alexis! These are great insights you and other freelancers are sharing about rates. I just launched my freelance copywriting business and did not include rates because each project is different–and I wanted to get a feel for how competitive my rates are by gauging the reaction of prospective clients. However, based on the posts I’ve read here, I now feel that maybe I should post my rates. I might be turning away potential clients …

  8. Jocelyn Wilhelm
    May 1, 2011 | 8:50 pm

    Hi Alexis,

    Came upon your blog through a friend’s referral. I enjoy your articles. Hope you keep writing! :)

    I’m doing Freelance Social Media work, and I find the rates very hard to nail down, due to the fact that the rates have such a wide range, in the community. So for that reason, I don’t post my price anywhere but indicate to prospective clients what my starting price is by the hour.

    Thanks for sharing!
    Jocelyn

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