5 Reasons Freelancers Undercharge for their Work

Feb 11, 2014

Many freelancers begin by undercharging for their work -- and then get stuck in an endless cycle of mediocre gigs.

This is because when you’re just starting out, getting gigs is more important to you than finding the right clients who pay you what you’re worth. And then you get trapped -- both financially and professionally -- because you’re settling for less interesting projects and lesser clients.

Here are 5 reasons we get stuck in undercharging mode:

#1: We’re Stuck in the 9-5

Most new freelancers think their price per hour should be what they got at their 9-5 job. Not so fast! While that may serve as a useful baseline, it should not be your final price. Read on to find out why.

#2: It’s Awkward to Talk about Money

You’re probably nervous about sharing how much you get paid with other freelancers. What if you’re charging too much? Too little? It feels like sharing your salary with other people: a faux pas!

But for freelancers, sharing what we make with each other can have a huge impact. If new freelancers try to price in the dark, they tend to price low, and this pushes the market’s rates down.

#3: We have a tendency to underestimate how long things take us

There’s definitely going to be some trial and error while you figure things out. You undercharge for one project -- and trust me, your frustration will motivate you to charge more next time!

#4: We don’t see the value of networking with other freelancers

Many freelancers have mastered networking with clients and people in their industry, and it’s easy to see the value of connecting with future clients. But connecting to other freelancers and talking honestly with them about pricing (and other topics important to freelancers) really allows us to protect ourselves. There’s tremendous value in freelancers sticking together (and that’s what Freelancers Union is all about).

Here’s the story one freelancer told Sara, our founder: “Soon after I became a freelancer, I joined a small networking group. In one meeting, one member stated what she charged per hour. There was a short silence. Then conversation resumed. And a member whispered to me, ‘I’d never charge that much!’ We were all doing similar work and had similar levels of experience. So why wouldn’t she charge as much -- and why weren’t we all talking about it?”

#5: We have a tendency to meet our financial obligations, not our financial desires -- because we want to get the gig!

Think of all the angsty employees face around negotiating their salary. Freelancers have to go through that for every project! Especially when we’re in a dry spell, we tend to undervalue ourselves, thinking some income is better than none.

This is why we need to learn to price with pride and confidence -- as professionals, not as technicians. If you want to learn how to price yourself correctly, read our guide here.

**Pass this on! **If we band together against market trends that tend to push the price of freelancers to the bottom, we can make a real difference in client expectations for freelance work in this country.

Looking for more freelance tips? Join Freelancers Union today to gain access to even more great content.