As a freelancer, independent worker, consultant, gig worker, or whatever title you’re going by, one of the most difficult - but important - items to manage is how much you bill your clients for your time and/or work.
Establishing the “right” price for your services is essential. It is a huge factor in finding clients, keeping those clients happy, and ensuring that you are taken care of financially at the end of the day.
With this in mind, we’ve compiled some information, tips, and helpful tidbits to help you as you navigate the challenges of finding the rate that’s just right for you. Hope it helps!
Hourly Rate vs Charging Per Project
Should I bill my clients per hour? Or should I charge a flat rate for the project? Ahh, a debate as old as time itself. Well maybe it’s not that old, but it’s still a problem that’s been perplexing freelancers for quite some time …
So which one is better? The short answer is; it depends. Whether you charge per hour or per project is a decision that needs to be made on a project-by-project basis. Let’s dive into that.
When to Charge Hourly
Hourly rates are best suited for work that will take an indeterminate amount of time and/or resources. If you are contemplating taking on such a project, we recommend that you consider using an hourly (as opposed to a flat) rate for your work.
Relatedly, if you undertake a project for which you suspect your client will want you to do multiple revisions, an hourly rate might also be preferable. That way, you can ensure that you’re compensated fairly your time doing (and-redoing) your work.
When to Charge Per Project
Per-project pricing, on the other hand, is better suited for a situation in which both you and your client are clear, and aligned, on the return on investment (ROI) that will be gained by completion of the project. Here, because the ROI is clear, you can charge a flat fee in accordance with the gains that will be experienced by your client.
Additionally, if a piece of work can be broken up into severable deliverables, you may want to consider a per-project pricing model. In such a case, you can charge per deliverable and even arrange with your client to be paid upon the completion of each such deliverable.
Factor In What Others Are Charging
If your rates are not competitive to those in your area, industry, and/or experience level, you may find it difficult to pick up freelance work.
Don’t let pricing get in your way. Take advantage of the information that’s already out there to assess what other freelancers are charging. Hop on Google. Join organizations or forums for professionals who do what you do. Hey, ProductionHUB is a great resource! Get involved here. Don’t be afraid to ask around.
Be Thoughtful In Your Planning
Don’t worry if you’re struggling with finding a rate that works for you. Take some time to get thoughtful and detailed. This effort will go a long way.
Start with your desired annual income and then work backwards from here. Factor in the costs of running your freelance business (office space, equipment, etc.), in addition to your living costs (food, friends, fun, being a human).
As you start to think about all of these things, you will get a sense for how much you need to charge in order to hit that desired income, while also covering your expenses. But, be warned! When making these calculations, it can be easy to overestimate how much work you will be getting. Do not fall into that trap! Be conservative with your estimate of the amount of work you’ll pick up over the year.
When Should I Increase My Rates?
Great question! The short answer is; when the value that you bring to your clients is enhanced.
It can be easy to get into the mindset of, “hmmm I’ve been doing this for a couple of years - maybe it’s time to raise my rate.” While experience is a huge part of value, it is not value in and of itself. Your rates need to be determined by the value that you bring to your clients.
Take the time to avail yourselves of online courses and new skills. Collaborate with others in your industry. Hey, they’re all here on ProductionHUB - would you look at that! Make an effort to identify and establish relationships with mentors.
When the value you can bring to your clients increases, so can your rates.
MOXI is Here to Help
What the heck is MOXI? If you don’t remember us from our earlier blog post, we are a mobile app that allows freelancers and independent workers to track their expenses, create invoices/timesheets, and get paid by their clients - all in one place.
We’re also cultivating a network of freelancers, just like you! Through our partnerships with awesome organizations like ProductionHUB we can be a resource for anyone who is starting out on their own, or has been doing freelance work for years.
We encourage you to download our app and have a look. We’re continuing to enhance our offering each day, so please don’t hesitate to reach out. We love working directly with awesome and talented freelancers to help liberate you from financial pains.
Don’t hesitate to reach out to us at email@example.com. Thank you for reading. Take care and keep hustling!
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