By Tony Jacowski
If you have decided to take on freelance work or become a freelancer full time, you are going to need to set rates - and most importantly, you are going to need to stick to them. Finding your place in a market is incredibly difficult, and can - in reality - make or break your freelancing career.
There are problems on either side of the rate divide. It may be tempting to price yourself well below your competitors; after all, surely someone will want to get a job done for the least financial outlay possible, guaranteeing you the job? The problem with this is that many freelance service buyers may indeed have a budget and want the best deal, but if you are much cheaper than all of their other applicants they will simply wonder 'why?'. By pricing yourself too small, you are effectively advertising your work as shoddy and quickly done - even if it is not. Most service buyers select someone in a mid range.
Which of course brings us on to the other extreme; pricing yourself too high. The opposite is true from the above in this scenario - you can quickly find yourself too expensive for a service buyers budget, and too expensive before they've even seen your portfolio There is also a chance that if someone pays top dollar for something, they may be dissatisfied with your work - those who pay more are much more picky, to the point that many freelancers report more time is spent on these projects than doing a lower priced project would take, in terms of hours.
It then becomes a question of balance, and firstly one needs to determine what you need to earn. This is not what you want to earn - we would all like to holiday four times a year - but instead the base figure you need to live on. This should include your rent or mortgage, power costs, basic groceries and any other costs you cannot avoid. When you have this figure, you know where to begin.
Depending on your home situation, you may be able to make this figure with a small amount of work - the reverse is true if you are the sole provider. Then set yourself a working schedule, and see how many hours a day you need to work per week to meet your necessary figure. Do the math, and you'll have an hourly rate you need to earn - so base your rates around this, never dropping lower.
It is important to remember that being flexible with your rates can help you hugely. Some projects will take less time than others, even if they appear the same; for example, copy writing 1,000 words on an unknown subject could take three hours, but if it is in an area of expertise it will take much less. If you reduce everything down to an hourly rate and what you need to meet your necessary outgoings, you will have a figure to work from. If you have too much work, raise that amount - and if you are not getting enough to cover those expenses, you may need to look at alternative ways of earning money. Never fall into the trap, however, of dropping your rates below what you need to earn - do that, and you will find yourself behind a desk working for someone else again, very quickly.
Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solutions - Six Sigma Online (http://www.sixsigmaonline.org) offers online six sigma training and certification classes for lean six sigma, black belts, green belts, and yellow belts.
There are problems on either side of the rate divide. It may be tempting to price yourself well below your competitors; after all, surely someone will want to get a job done for the least financial outlay possible, guaranteeing you the job? The problem with this is that many freelance service buyers may indeed have a budget and want the best deal, but if you are much cheaper than all of their other applicants they will simply wonder 'why?'. By pricing yourself too small, you are effectively advertising your work as shoddy and quickly done - even if it is not. Most service buyers select someone in a mid range.
Which of course brings us on to the other extreme; pricing yourself too high. The opposite is true from the above in this scenario - you can quickly find yourself too expensive for a service buyers budget, and too expensive before they've even seen your portfolio There is also a chance that if someone pays top dollar for something, they may be dissatisfied with your work - those who pay more are much more picky, to the point that many freelancers report more time is spent on these projects than doing a lower priced project would take, in terms of hours.
It then becomes a question of balance, and firstly one needs to determine what you need to earn. This is not what you want to earn - we would all like to holiday four times a year - but instead the base figure you need to live on. This should include your rent or mortgage, power costs, basic groceries and any other costs you cannot avoid. When you have this figure, you know where to begin.
Depending on your home situation, you may be able to make this figure with a small amount of work - the reverse is true if you are the sole provider. Then set yourself a working schedule, and see how many hours a day you need to work per week to meet your necessary figure. Do the math, and you'll have an hourly rate you need to earn - so base your rates around this, never dropping lower.
It is important to remember that being flexible with your rates can help you hugely. Some projects will take less time than others, even if they appear the same; for example, copy writing 1,000 words on an unknown subject could take three hours, but if it is in an area of expertise it will take much less. If you reduce everything down to an hourly rate and what you need to meet your necessary outgoings, you will have a figure to work from. If you have too much work, raise that amount - and if you are not getting enough to cover those expenses, you may need to look at alternative ways of earning money. Never fall into the trap, however, of dropping your rates below what you need to earn - do that, and you will find yourself behind a desk working for someone else again, very quickly.
Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solutions - Six Sigma Online (http://www.sixsigmaonline.org) offers online six sigma training and certification classes for lean six sigma, black belts, green belts, and yellow belts.
