You fought the battle to work for yourself and won — yes! But when you turn around, you find yourself still in the trenches. Because whether you work for someone else or you work for yourself, you still need to get paid.
But why is it so hard to get started? Why do you find yourself letting the client set the rate or giving into negotiations and settling for whatever they’ll pay?
There’s just something about setting your freelance rate and eventually raising your freelance rate that leaves you feeling like you’re in over your head. I know, I’ve been there. But the good news is that you don’t have to stay there for long.
Setting your freelance rate for the first time
Pricing is hard, whether you’re negotiating a salary or deciding what to charge new clients. But there are two numbers you need to know that will help you set your freelance rate for the first time. Brace yourself, there’s a little math involved:
Figure out your bottom line
While you never want to price yourself based on how low you can go, you do need to know your bottom line. What is truly the lowest you can go and stay in business? Start with two important numbers: the minimum you need to bring in to keep freelancing each month, and the billable hours you’ll work each day.
Let’s say you’re married, have the luxury of an employed spouse, and the minimum amount you can bring in each month while staying solvent is $2,300 (including taxes, expenses, healthcare, business apps, etc.). After hours invested in marketing, invoicing and other unpaid time investments, you expect to work five hours per day on billable projects, five days per week, giving you a total of 100 billable hours per month.
Divide the second number by the first number (the amount you need divided by the number of billable hours per month you would like to work). This is your ideal hourly rate, the minimum that you should propose as you share your rates with clients.
In this example, the writer would need to make $23 per hour to be able to work that schedule. If that’s not accurate or doable for your experience or your industry, you’ll need to adjust your numbers by planning to work more each day or more days per week.
Figure out what you’re worth
The second piece of this puzzle is the market you’re looking to break into. How much value do you bring to the table? What is the range your clients budget for the work? You might find that certain industries earmark a lot more of their budgets for writing than others, and those are the ones you want to zero in on.
Figure out how much your services are worth by researching your niche among writers who publish their rates. Do your research on popular blogs and freelance writer websites, and map out the territory with their hard-won information. Rate your experience and talents against theirs, compare with your bottom line, and price accordingly.
Other great resources include the Editorial Freelancers Association’s for various writing-related projects, the Professional Writers Association of Canada’s post and the NJ Creatives Network’s post .
Increasing your freelance rate
One of the many reasons so many writers flock to freelancing is the idea of giving yourself a raise when you deserve one. But if you were careful as an employee, it’s time to be extra careful as a freelancer. Every move you make and every word you say reflects directly on your business and your brand — including the rate you can command. Choose to act genuinely, generously and professionally with the following two moves:
Give truthful, timely notice to avoid surprise rate hikes
When it’s time to increase your rates, price-gouging and ransom aren’t the way to do business. Whether you’re worth the cost or not, suddenly dropping a larger rate on your next project or (heaven forbid!) surprising a client in an invoice won’t work out for you in the long run.
Take your time and give notice — which not only saves your relationship with the client, but earns you respect. Announce price increases at least two months in advance to allow your clients to budget for them. If you’re in a particularly strict industry, you may even accommodate a longer wait (for clients that get budgets approved quarterly or yearly, for example).
And when you do it, don’t use weak language. Clients see right through whimsical statements like I’m sorry, but… and If it’s all right, I’ll… Simply state the facts: you’re more experienced, you’re working harder and faster, and you’re getting more attention from prospective clients. If none of these statements are true, you shouldn’t be raising your rates. (.)
Be generous to clients you enjoy working with
Show your clients you enjoy working with them (because that’s why you’re still working with them, right?) by being generous when you raise your rates. No, that doesn’t mean you charge less. It means you give them a special coupon or a one-time deal to show them you appreciate their time (think Book before the end of the quarter and receive 20% off the entire project-type offers).
Because here’s the real secret to setting your rates and raising them as your business grows: when someone aims to hire a freelancer, they’ll know what they want when they see it — the right experience for the niche, the right working relationship for the company, and the attention to detail and deadlines that will keep them in business. If you mesh with a client over these three details, they’ll be more than willing to pay you.
If you raise your rate and they no longer want to work with you, you’re still in good shape; having a client drop you is not the worst thing the world.
The worst thing would be bending your needs (and rates) to the will of a client who doesn’t appreciate what you do or want to pay you for it. Avoid those kinds of clients by setting your freelance rate right the first time, and raising it confidently ever after.
How did you set your initial freelance rate? What strategies have you used to raise it?