This is a post from a member of the Freelancers Union community. If you’re interested in sharing your expertise, your story, or some advice you think will help a fellow freelancer out, feel free to send your blog post to us here.
This February, my company conducted a survey of WordPress design and development firms. We talked to everyone from big agencies to one-man shops. One result really stood out, and I wanted to share it here:
Freelancers in this industry simply aren't charging what they're worth.
Only 2.4 percent of freelance design and development professionals say they bill more than $150 per hour—but 8 percent of agencies do.
While the most common hourly rate freelancers charge is $76-$100 per hour, freelancers are twice as likely as companies of 2+ employees to work for as little as $26-$50 per hour.
This concerns me. I started as a one-man shop, so I understand the challenges freelancers face. Some of these hourly rates simply don't match up with the market. A freelancer billing $50/hour, working 52 weeks and billing 40 hours every week, would only gross $104,000. That's a good salary, but far below what someone with web design or development skills is worth.
And billing 40 hours a week doesn't leave them much time for essential activities like marketing or professional development. If a freelance designer or developer isn't finding new business and isn't working on their skill set, they'll never be able to grow their business.
What's a freelancer to do?
One area for improvement pointed out by our survey data—time tracking. Only 59 percent of freelancers who responded to the survey say they use software to track their hours.
Now, time-tracking yourself may seem like overkill—escaping the requirement of documenting your every move for a boss was probably one of the reasons you wanted to be out on your own in the first place.
Still, it's a valuable exercise. When you really see how you spend your time, you're able to identify low-value tasks that you could automate or subcontract instead. Time tracking will also help you give better project estimates.
Know your rates
Another factor causing underpricing could be that freelancers just don't know what the going rate for their services is. Large agencies guard their pricing strategies, while spending thousands of dollars on research services to try to figure out what their competitors are doing.
Luckily, web design and development firms were generous enough to share their hourly rates, so freelancers in this industry now have a better sense for what they should be charging. Are you charging enough?
If you see that your hourly rate is well below the competition and would like to charge more, I have a few simple suggestions:
- If you aren't using time-tracking software, start. I recommend Harvest, which is just $12/month for freelancers.
- Check out the most popular small business automations at IFTTT. It's free.
And, above all, envision what your business would look like if you started charging what you're worth. Imagine if you doubled your hourly rate. How would that change how you market yourself, the way you spend your time, your ability to balance work and home life? Nothing may come of it, but the experiment itself might help open up new ways of thinking.
Benefits for all
My hope is that the experts in the Wordpress design and dev field who are undercharging clients will feel empowered to adjust their rates. Based on our survey, they don't need to be held back by fear that they're charging too much for their work. The result will be better for everyone.
Freelancers who aren't charging enough will see their revenue go up and their work/life balance improve. Every other Wordpress design/dev company will be able to continue to charge reasonable prices without fear of being undercut. And clients will benefit as well, by helping to nurture an industry that has the resources to grow and innovate.
Justin Samuel is a security researcher and founder of ServerPilot. In 2013, he launched ServerPilot to empower web developers moving to cloud servers and make hosting faster and more secure.