When you’re a freelancer, pricing your services properly is one of the most important things you can do. It’s important that your rates stay competitive, but at the same time, you need to set them high enough for you to make a decent living. Fortunately, the process is a lot easier with a bit of planning and research.
Research Current Market Rates
The first thing you should do is research current market rates for the services you provide. For example, if you’re a freelance writer, you should have a good idea of how much other freelance writers are charging per piece or per word before you set your rates. When researching current rates, you should talk to other industry professionals, but you should also search the internet for market reports and trends to get a good idea of what’s going on throughout the industry. Another good way to compare rates is to visit other freelancers’ websites. Simply look at what they are offering and their prices, and then, use the information you collect to set your own rates.
Determine Your Ideal Annual Income
Another good way to determine your rates per project or per hour is to determine your ideal annual income and work backwards. For example, if you know you want to make about ₹60 lakh per year — an annual rate made by 23% of freelancers — you would simply take that amount and divide by 12 to determine what you’d need to make per month. From there, you would divide the monthly amount by how many hours you want to work each month to determine how much you would need to make per hour to earn the annual income you expect. Once you know the hourly rate you need, it’s easy to convert that amount into a per project rate. You simply need to multiply that rate by the number of hours it will take you to complete the project.
Know How Much It Costs You to Do Business
When determining your rates, you also need to know how much it actually costs you to do business. This means you need to add up all of your actual business costs such as the cost of software you use and supplies you need. You should also factor in the time you spend doing tasks that don’t generate income directly. For example, it takes time to market yourself, talk to potential clients, and close deals, but you don’t bill your clients for the time you spend on these tasks. Instead, you should estimate the amount of time you spend doing this type of work. Then, figure the cost of the time spent into the rates you charge. This way you’re paying yourself for all of the hours you spend working.
Factor in the Value of Your Work
Before you determine your prices, you should have a good understanding of the value of your work. To do that, think about it this way: If you write a sales page for a company and that sales page brings in ₹1 crore, is it really fair that you’re only paid ₹3,000 for the work? Not really. To avoid this, you need to factor in the value of the work you provide. Unfortunately, there isn’t a way to determine an exact monetary value of your work. Instead, think about how your work will be used before you settle on a price. If your work will be used to generate sales, you should consider charging premium prices. But if it doesn’t directly produce sales, you should try to stick closer to the going rate.
Remember, as your business grows, you can always adjust your rates accordingly. So if you later find that you’re really good at a specific type of task, don’t be afraid to start charging premium prices.