The formula to set the right price for online freelancing services: Project Price = Base Time x Difficulty Multiplier x Hourly Rate x Specific Skill Factor.
How much should a freelancer charge for his or her services? There is no consistency in rates for a freelancer. Some freelancer with the same expertise charges in single digit whereas others are in the high 3 digit mark. Often we read ‘whatever you wish’ as also an answer to the rates a freelancer can charge. Actually, it should be a guided by the following 7 parameters.
So what are those 7 guided tips or parameters to set the right freelancing rates for your services?
1. Look at the Competition Pricing
Research what is the kind of rates other freelancers in the same niche of expertise are charging. This should help you give a broad price range for your freelancing services. Research the freelancing sites or other online forums to discover rates.
You can even use job portals or job boards to find the kind of salary is being offered to your niche of expertise. This should be a good starting point to help you estimate about how much you should charge.
2. Find the Base Time
What is the base amount of time you as a freelancer needs to get the task done? As an example:
- How long does it take for me to write the average 500 to 700 word-article in a specific niche?
- How long does it take for me to update a website in PHP with a small bug?
- How long does it take for me to design a new set of buttons?
- How long does it take for me to create a simple snippet of code?
Understand your base amount of time you will require to get a similar task done. This should help you to get the base price for the task.
3. Calculate a Difficulty Multiplier
Every job can’t be completed in the base time. Some tasks are more time consuming than others. So one has to determine the difficult is the task.
- As a writer, do I need to perform a lot of research?
- As a PHP Developer, do I need to understand the existing site’s code before making any changes for the small bug?
- As a designer, is client very specific about the kind of buttons he or she may need?
- Can the simple code be implemented on the website directly or it is part of some framework or CMS?
Take the difficulty factor into consideration. Depending on the difficulty of the job, the rates should be multiplied by a factor of 1.5x, 2x or even 2.5x. If the task is very easy for you and you want to be price competitive, even reducing the price can be an option.
4. Have an Hourly Rate
Calculate your break-even hourly rate. The hourly rate is based on many factors, including rent, insurance and legal fees and other monthly and yearly expenses.
Once you have your hourly rate and has already determined the base time needed to get things done, it becomes easy for you to determine the base price which is the time needed in hours to get the task done multiplied by your hourly rate.
5. Examine Skills
You might have a unique knowledge in the printing industry. You know a particular CMS. You might love cars or have unique contacts in an industry. You might have a knack for explaining difficult concepts to novices. All such unique skills that you have developed over time should help you demand better rates as a freelancer.
Are there any skills or specific expertise you have that other freelancers don’t have? If you do, incorporate a multiplier for special knowledge.
So finally the formula to calculate the final price for the project becomes:
Project Price = Base Time x Difficulty Multiplier x Hourly Rate x Specific Skill Factor
The best example of specific skill factor is of a translator. It is a very specific skill where one needs to know more than one language to be able to translate content from one language to another language.
6. Learn to say NO
Sometimes, you take a client’s project because you have to pay the bills. It may be the need of the hour but try avoiding it to the extent possible. Every freelancer who wishes to grow has to reject clients. It is easier said than done but those who learn to say no to clients grow much faster than those who can’t.
Some clients are always looking to pay less whereas others will be very time-consuming. These clients are usually responsible for most of the hassles that you will receive. You are worth lot more than that.
If someone is not willing to pay you what you are worth, say no to them. Accepting clients at a price they are willing to pay can mean you have to lower the quality of your work which may not be a very good idea for the long-term.
7. Be consistent with client
When you decide how much you are charging, be consistent. Always avoid a double price point. As an example if a client knows your hourly rate as $40 per hour and if you say you can get the task done in a couple of hours time, you can’t charge $200 for the task for sure.
Multiple prices can mean client may lose trust in you. If a client knows about your hourly rate and asks for a very simple task, do it at the base hourly rate just to be consistent. Creating a long-term relationship with clients and building trust is the most important aspect of being a freelancer.
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