Whether you’re just starting your freelance business or you’ve been growing it for years, knowing what to charge for your services—and the value you provide—will be critical to your success and your earnings.
Charge too little and you’ll have to take on more projects and work even harder to meet your financial goals. Charge too much and you run the risk of turning clients off and not landing as many contracts as you’d like.
Since your time is money, you’ll want to spend it wisely and get compensated appropriately to maximize your earnings.
Setting your rate is all about striking a balance to arrive at the right price for the value and unique skills you provide in the current market while also factoring in the workload you can take on. Here are a few tips to consider when determining how much to charge for your services.
Get started on the right foot
Not sure where to begin? Setting your price for the first time and landing your first client can be tricky, but one thing is for sure: It’s not in your best interest to offer to do a trial project for free. (Not to mention, it’s strictly against Upwork’s policies.)
A better way to get started is to familiarize yourself with the competitive landscape:
- Research what other freelancers with similar skills are charging for their services on Upwork.
- Check their work history, feedback, and Top Rated status.
- Look at a variety of freelancers, including those who are new to Upwork and those who are more established, to get a sense of the range of rates in the marketplace.
You can also explore project listings to see what clients have budgeted for the types of projects you’d like to do.
Keep in mind there is no one-size-fits-all answer to what you should be charging. There are many factors to consider such as the market, your skills, experience level, educational background, and other assets you have that make you a unique and qualified professional. Take all these factors into account and test the waters to see what works for you and resonates with clients.
For more tips on how to determine your initial rate, read “How to Set and Raise Your First Rate on Upwork.”
Another resource to check out is Upwork’s free eBook, “Build a Business You Love: Freelancing Tips from the Pros.” Designed to help new freelancers lay the groundwork for success, this ebook is packed with ideas from freelancers who’ve been there before and have found success—including six-figure incomes—on Upwork.
Factor in your expenses
Many freelancers transition from or continue to work full-time jobs while building their businesses—which could be a potential pitfall when it comes to setting freelance rates.
Freelance copywriter and founder of Freelance to Win Danny Margulies finds many freelancers undercharge for their services and surmises it’s because they base their rate on their annual salary. “When people move to freelancing from a corporate job, they often use their salary as a benchmark: ‘I was making $X an hour, so that’s what I should charge,’” he said.
However, that rate doesn’t account for expenses you’ll encounter as an independent professional—costs like your computer, office supplies, self-employment taxes, and insurance. In addition, you should also consider the time you’ll need to spend on administrative tasks, which aren’t billable but are essential to keep your business running smoothly. All of these things add up and should be factored into the equation when determining your rate.
For more insights and tips Margulies has discovered on his way to becoming a six-figure freelance pro, check out “Mistakes Freelancers Make When Setting Their Rates—and Ideas to Fix Them.”
Provide bang for the buck
Value isn’t easy to define, but it’s something that will make clients happy and can help fuel your success and pave the way to charging a higher rate.
In “Four Ways to Get the Rate You Want: Tips From a Six-Figure Freelancer,” freelance marketing strategist and writer Tim H. shares his strategies on how he went from earning $0 to $100,000 in three years. One of his secrets to success? Delivering value to his clients. And that starts with thinking like the client.
“Clients care about streamlined processes, less stress, and more bang for their buck,”
— Freelancer Tim H.
That calls for approaching a project with their perspective in mind. What can you do to make their jobs easier? How can you help them look good to their executives or customers? It could be something as simple as putting together a document that clearly shows the project timeline and deliverables so everyone can be on the same page.
Taking the extra step to offer something that makes the clients’ lives easier will help solidify your value and could lead to more projects—and potentially a higher rate—down the road.
Set it but don’t forget it
You’ve established your rate and it’s working: You’re landing contracts, delivering great work, and making money. So that’s it, right? Not entirely.
The article “3 Fundamentals to Freelance Success” sheds light on a few key factors you’ll need to consider to stay competitive: growing your business, boosting your efficiency, and learning new skills. From finding new clients to marketing your services to streamlining processes to keeping your skills fresh, there are many things outside of your project deliverables that you’ll need time to tackle if you want to continue to build your business and command a higher rate.
While this may sound like extra work at first, it will pay off in the long run. For example, by expanding your expertise, you’ll not only broaden the types of projects you can take on but also provide greater value to your existing clients, which could make it easier to negotiate a rate increase in the future.
Raising your rates effectively and tactfully
Once you’ve established your initial rate, you’ll likely want to increase it at some point whether you’ve developed new skills, acquired more experience, or simply think it’s time to charge more for your expertise.
While discussing a rate increase with a client may not be easy, it’s an essential skill to hone when you run your own business. It’s all about timing and how you approach the situation. The article “Is It Time to Raise Your Rates on Upwork?” has ideas on how and when to discuss a rate increase with new and existing clients.
Before you broach the topic with clients, a good place to start is by taking stock of your business. Does your profile accurately reflect the value you provide and the higher rate you want to charge? By sprucing up your profile, adding new experience and skills, building out your portfolio of recent work, and marketing your services more effectively, it’ll be more apparent to clients why you should command more.
For more ideas on how to raise your rates and negotiate effectively with clients, be sure to read “6 Methods for Raising Your Rates (Without Losing Any Clients).”
While building a thriving freelance business takes some time and energy, it’ll pay off in spades when you start winning contracts, garnering great feedback from clients, and increasing your earnings. Start by setting a rate that accurately reflects your value and expertise, and you’ll be well on your way to success.
The post 5 Ways to Set the Right Rate and Grow Your Freelance Business appeared first on Upwork Blog.
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