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Pricing is one of the thorniest issues that a beginner freelance writer faces, especially when going full time.
It was pretty much the premise of my book on the topic, and my short guide ‘Hourly Rates Don’t Matter’ has been downloaded over 8,000 times.
Sure, the experienced writer can price based on value but what about if you’re just starting out?
Here’s a comprehensive guide that will give you the basics you need to figure out the right price for your services.
1. Determine Your Minimum Acceptable Rate (MAR)
It’s always better to have a starting point that you won’t go beneath, because after all, you have to do mundane things like eat, and stay warm, right?
If you are already a full-time freelancer (or even if you’re just starting out), your MAR calculation should look something like this:
(personal overheads + business overheads) / hours worked ) + tax
Alternatively, this infographic will help walk you through the calculation process.
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2. Pricing for the Value of Your Work
With some baseline ‘bare minimum’ data points established, let’s move into an area you’ll learn to maximise over time. Value.
So how do you judge the value of your work? Key criteria are your background, your experience, and your education.
Important factors in pricing also include expenses such as phone bills if you have to do interviews, and the time it will take to do the work.
To work out pricing for each project, break the job down into its constituent elements, work out a time frame for each, and add them together with a sensible contingency factor.
Bear in mind in your final price that a client may well want to haggle, and will be happier if they get some perceived reduction.
There are two basic ways to charge – per project or per hour. Charging per project encourages you to be efficient and to work productively – and if you can do that you’ll earn a higher equivalent hourly rate and likely impress your client in the process.
One golden rule is to nail down the nature and scope of work as precisely as you can, preferably in a contract, so both you and the client are clear on what’s being delivered.
However there are always problem areas (such as proofreading) where you can end up getting paid far less than the job’s worth, unless you charge per hour.
The Exception to the Rule
The potential exception to the “always get paid what you deserve” mantra is if a client can offer an indirect benefit, particularly when you are just starting out.
These can include:
- Reputational benefit (if the client’s well known and respected).
- The work being very secure.
- The work having the potential to lead to better things.
3. Figure Out What the Competition Charges
You have to be competitive, but first you need to find out what people with similar experience charge in your area of expertise.
If you’re on LinkedIn there are freelance journalists’ forums where you can get valuable feedback, and some journalists also advertise their fees on their websites.
The National Union of Journalists in the UK also publishes a useful freelance fees guide that can be translated into dollars as a rough model, and it also offers guidance for US publications.
4. Supply and Demand
The range of potential earnings you’ll find when looking for work is amazing. A quick look at a site like Elance shows how very wide the variation can be.
At the time of writing, there was an offer to ghost write three books for between $500 and $1000, script writing for $40 to $50 per hour, and a client asking for a long series of 500 word features for just $10.
Finding a niche where you can earn well is an important tactic, particularly if you’re starting out with existing expertise.
Even what you might call life experience – if you’re a dog or horse trainer in your spare time, or a runner, or an expert skier – can point you towards outlets where your skills could potentially be really valued and appreciated.
5. Learning How to Negotiate
Clients will always have a budget in mind for their job, though they may not necessarily want to share that with you.
This may mean a client will ask what you charge, or make a flat offer – in which case it is time for you to start negotiating. Be amiable, be polite, but also be firm.
As a general rule, try to get the client to make an offer first.
If the client won’t offer what you’re asking, it’s time to decide – do you accept, for the reasons outlined above? Do you stand firm? Or do you negotiate the scope of work?
Above all, agree on a rate you’re comfortable with or else the job will be a miserable one to complete.
Remember, whatever you’ve managed to agree, rates are not permanent – there’s always room to re-negotiate once you’ve done some good work and your client is happy.
And remember, a client who takes exception to you negotiating is not a client you want to work for.
Treat potential clients fairly, and be transparent in how you do business – if you are upfront and honest in your dealings, clients are more likely to choose you for long-term work.
Ultimately, the way to learn is to do – take these basic steps and go out and negotiate. The more you do this, the easier it will become!
How do you decide what to charge clients? Do you prefer per hour or per project? Let us know in the comments!
Liam Veitch is the founder at Freelancelift and author of the Amazon Bestseller ‘Stop Thinking Like a Freelancer: The Evolution of a $1M Web Designer’ which charts the growth from freelancer to fully-fledged agency. Learn more about Liam and the ‘$1M Freelancer’ book at Freelancelift.