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What Are You Worth? How to Set Rates as a Freelancer

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What Are You Worth? How to Set Rates as a Freelancer

If you’re on any social media group specific to your freelancing niche, you’ll undoubtedly see dozens of posts each day asking how much to charge. Be it design, copywriting, marketing services, video editing, photography… whatever your field – people out there are clamouring to know how they should set their pricing strategy. 
The market versus you

The logic of this kind of research is, of course, solid. Gathering an idea of what other people are charging means you know what kind of prices people seem willing to pay. Collating as much evidence as you can on this front is key. So even if you find those posts tedious, drink them in, because they may be hugely beneficial. 

But the thing is, they’re only half of the equation. Forget what the client is willing to pay. What are you willing to earn? Do you have three children to support? Do own an apartment in upper-East Manhattan (because Carrie Bradshaw has made it eminently apparent that you can afford a swanky apartment there on a freelancer’s salary, right?). Maybe you’re maintaining an expensive single malt whiskey habit? Or perhaps you’re the kind of person who is happy to re-use a teabag. And more fundamentally: how much do you see money as a representation of your value, versus, say accolades and praise, an easy life, or endless free time? 

This part of the assessment requires both quite a lot of soul searching, but also some practicalities. If you’re charging on a per-piece basis, what is that working out at per hour? And does that mean you should up your price, lower your time/effort investment, or simply become more efficient? How many hours will you have work to scrape your living expenses? To live comfortably? To live luxuriously? (and, by implication, is it worth it?). What are your opportunity costs – how does this match up to a ‘real’ (/wage slave) job?

Complex questions that require a little bit of maths and a lot of self-reflection. 

And now, finally, forget both what the market is willing to pay, and what you’re willing to earn. We’ve got a third question for you: what can you justify earning?

Confusion in the market 

It’s funny, but it never seems like builders, plumbers, mechanics and electricians tie themselves in such knots wondering what to charge. Is that simply the swagger associated with the industries, the knowledge and confidence that there will always be enough work, or the tangibility of the service offered? 

One of the big differences is perhaps barriers to entry. Whilst some of us (for that, read me) think ‘how hard could it be?’ when it comes to building or plumbing jobs (at least I don’t mess with electricity), the rest of us are sensible enough to know the limits of our abilities and the value of training, education and skill. We know that a mechanic has intimate knowledge of our car, whereas we don’t even know where the carburetor is (hint, there probably isn’t one). The mechanic has us over a metaphorical knowledge and skill barrel. 

In the creative industries however, that line is becoming more blurred: everybody can technically write words on a page, squarespace has made website design accessible to all, smartphones have made photography easier than ever, and Canva has put graphic design at the fingertips of the masses. In terms of tools, the line between professional and amateur has become blurred. 

And actually, that’s true for talent too. There are some exceptional amateurs in each field. And some terrible professionals. That creates a level of cross-over that muddies the water. 

The result is that we get very angry at the ‘Choosy Beggars’ who say that their 17-year-old nephew could do it for free. The obvious answer is ‘well, ask them to then’. But, whilst this client mindset is infuriating, there is a grain of truth at the heart of it. Could their 17 year-old-nephew do it? We might have our own sense of self-worth and value, but what are we bringing to the game that gives grounds for a pricetag so much higher than the guttersnipes on Fiverr?

Of course, it’s not necessarily fair that low barriers to entry in creative markets are dragging down perceived market value. But whilst we can complain about it, we also need to take it as a reality, and ask ourselves how we can reposition ourselves to justify our value. What can we bring to the table that an amateur can’t, and are we communicating that in our proposition? What we can charge will very much depend on how we position and market ourselves, how we communicate and position ourselves, and how we tap into a USP. 

A crisis of confidence

The net result of this amateur infiltration is that in the creative industries, we seem to have significantly less confidence. I’ve worked as a freelance writer for more than a decade and I’ve never been short of work, but somehow I’m still plagued by imposter syndrome; everybody can write – why would they pay me to?

I’ve trained as professional chef too (and a mechanic, and a lawyer, but that’s beside the point). And every meal I’ve ever cooked, I’ve said to myself ‘well, it’s just food, isn’t it – everybody cooks’, even as the people I am feeding are asking me to come and cater their next event. 

If there’s any concrete evidence for undervaluing my own skill, it comes from the fact that I’ll frequently encounter projects that I don’t want to take on. But I’m terrible at saying no. So I decide that the obvious answer is to simply price myself out of the project; set a price so ludicrously high that any potential customer would cackle and walk away. 

Without fail, every one of them has agreed without so much as a haggle. 

Enough of these encounters have finally encouraged me to set my prices at rates which reek slightly less of desperation and insecurity. But it just goes to show that our own levels of confidence have a huge impact on the way that we price our skillset. Are you valuing yourself enough? Or too much.

What do you believe in?

The nature of the project will also have significant bearing on the rates you can and should set. This is not strictly an issue of market forces, but a question of what you believe in. What do you want to put you efforts into? If you truly want to support a particular endeavor, then your work may become a hybrid between earning a living and fulfilling a personal mission. That’s not to say that you treat every worthwhile project as a charity case; many parts of the NGO sector are notorious for dealing in millions of dollars, and dime-and-nickeling their workers through guilt-laden rhetoric. But if you think a project is worthwhile and your services could make a difference, then think about what financial tradeoffs you’ll make to feel the satisfaction of making a contribution. Part of your pay becomes your satisfaction.

 Or alternatively it can become an investment. Not all clients are billionaires; but if you believe in what they’re doing, supporting them at the bottom might reap rewards when they reach the top. Start-ups who only have $50 to pay you now might be in a position to pay $300 a year down the road – and if you’ve invested in that relationship, there’s a good chance it will be rewarded. 

Easy money 

It’s all very well setting yourself a hard rubric: $X amount for Y amount of work. But we all know no two projects are alike. Some are a walk in the park, money for old rope, a complete breeze. And sometimes, they’re like pulling teeth. Agonising back-and-forth, beck-and-call emails and Zooms that aren’t ever accounted for in the fee. A complexity of research that means 1000 words requires what seems like a hundred hours of reading. Or simply a personality clash with the client that requires you to bite your tongue whilst wanting to pull your hair out. 

It’s OK to accommodate these elements in your pricing structure. If you foresee trouble ahead and many extra hours, price accordingly. If you think the project is interesting, engaging and straightforward, price competitively. If you think you never want to see this client again, price outrageously. If you think you could have the start of a great working relationship together, price enticingly (though be careful on this front not to lowball yourself into a corner that you can’t escape from in the future).

Changing your mind 

That leads on to an interesting point. What if you get it wrong? What if you’ve hugely underestimated yourself and your demand, and realise your prices just aren’t sustainable? Are you doomed to an eternity of working your fingers to the bone for a pittance?

You can’t be entirely erratic with your pricing, but you should never feel latched in to your rookie rates: as you grow, as your client base grows, and as other variables come into play, you can make adjustments and experiment. Be confident that you have some wiggle room. Yes, sometimes you’ll end up massively underpricing yourself, and you’ll have to suck it up and finish the work at a loss anyway. And sometimes you’ll overprice yourself and lose a client. Neither situation is the be-all and end-all – merely a learning curve.

Moreover, in any other job, salary increases would be a pretty regular thing – at least in line with inflation, if not through the recognition of raises. If you’ve had clients for ten years and are still charging the same price, it’s more than reasonable to write a carefully worded letter outlining the economics of the situation. But there’s a balance between not raising them too drastically, and not raising them too often, so play it carefully. 

See Also

The big reveal

And so now, we reach the final paragraph, and this is where I reveal the magical formula for your pricing structure. 

Well no, I’m afraid not. 

C’mon, what were you really expecting? I don’t know what line of work you operate in, where, for how long. I’m not in possession of a magic eight ball. 

The point is really that it’s a question of what the market will bear (or what you think it will), what value you actually bring in that market, and what you personally need to a) actually survive and b) feel valued for your work. The first question is one of research, more research, boldness, and – to a certain extent, trial and error. 

And the last question is entirely more personal. Try to forget what you feel you should be getting. Focus instead on whether you’re getting what you need. Not just financially, but in terms of respect, of lifestyle, of work/life balance, of personal satisfaction. If you wanted clarity about income, you could get a salaried job. As a freelancer, you’re trading that stability for less tangible values. It makes for a tough calculation, and as of yet, nobody has invented a magical calculator for it. 

If you ever do though, be sure to price it competitively…


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