One of the most overwhelming doubts of freelance work is "how to set the rates for your services?". On the one hand, you most likely have a rent to pay, as well as utilities such as electricity and your internet that allows you to work. On top of that you have to eat, right? So how exactly do you set rates in the freelance world?
Worst of all, there doesn't seem to be a universal formula to help you price your work. For this reason we resort to doing it randomly, guessing a number and giving it to the client hoping they'll accept it. But it doesn't have to be that way. This is worth spending the time and effort to get the right rate for your job.
In this article we will give you some hints and tips to find the ideal amount to charge. Of course, everyone's level of skill, experience and expertise is different, so don't assume that the specific rates they charge will necessarily apply to everyone. But, at the very least, it will give you a reference for thinking about your freelancer rates and how to arrive at them over time.
Steps to set your rate
Research the market
In general, what a person is paid has nothing to do with fairness, the usefulness of their work to society, or the amount of effort they put in: otherwise nurses, teachers, and other caring professions would charge much more than they do. Ultimately, it comes down to market value: how many people need your services (demand) and how many others offer the same services (supply).
That's why there is no universally accepted salary for illustrators, designers, etc. around the world. Depending on how supply and demand change, rates will go up and down in different places and at different times. So, to get a rough idea of what you should charge, you need to research the current market.
An example of market research can be to ask other freelancers offering your services how much they are charging. Of course, that would not be enough, you would have to do more research for the result to be useful. Search the Internet, ask about your niche, and you will be able to find surveys related to your skills and your area. Remember that this is a constant work, the rate you had two months ago may not apply today, so take the time to look for the rate that best suits your services in that market.
Research how much agencies charge their clients.
In addition to finding out what agencies pay freelancers, it's also worth researching what clients pay agencies directly. Having a bit of inside information about the business can be very useful when it comes to setting rates as you know what clients are paying and, at the same time, you know how much the agency is paying freelancers. In those figures you will be able to find the answer to how much you should charge.
Once the rates are set, it's important to stand firm and not be intimidated by stingy clients. But, at the same time, it's good to maintain some flexibility. And, in fact, most freelancers are willing to cut them down a bit for the right project.
You don't have to have a fixed rate all the time, it can vary depending on the project. There are different aspects that have to be taken into account: the length of the contract, the seniority and the skills required. And even the price can go up or down depending on the size of the client. This depends on you and the research you have done.
Hourly or daily rates
Should you charge by the hour, by the day or by the project? Freelancers often have different opinions on this, but we understand that there are some of you who are wary of hourly rates. Some consider that charging by the hour ends up being very expensive for the client and exhausting for the freelancer. Instead if you charge by the day, you can have a fixed rate and you can calculate, based on your experience, how many days it would take you to complete the project; this way you can give a more fixed price to the client.
Fixed fee vs per day fee
What about charging per day versus charging per project? Again, there is no clear consensus on which is better in this case, and some freelancers will switch between each depending on the situation. There are those who charge by the half day, or full day. However, there is also the possibility of assigning a flat fee per project; this will always depend on the size of the company, the client and their industry. For example, you would not charge the same to a home bakery as you would to a corporate with more than 100 employees.
On the other hand, the way you can calculate your rate is by thinking per day. How much do you need to earn to cover your expenses in a year, adding in the factor of the size of the client. This gives you an approximate daily rate for that particular project, and by multiplying it by the number of days it might take you to do it, you get the price you share with the client.
Get it all straight
One of the biggest problems when pricing a job is the difference between expectations and reality. Most freelancers have had the experience of setting a fee only to find that the scope of the project got out of hand and they ended up falling short. Therefore, the first thing to do is to clarify the type of tasks to be performed, your responsibility and role in the project, deliverables and deadlines. With this, you can evaluate your fee based on the project.
You will see that once you are honest with the client and clarify every detail of the price, your quote will be accepted. If not, there will be more clients who will take it.