Do you have a freelance business? Perhaps you’re looking to start freelancing in the near future.. If so, you’re either already looking to grow your client-base and scale your business, or you’ll soon be joining the over 54 million freelancers in the US, all seeking to gain more control over their careers.
One of the tallest hurdles in launching a freelance business is deciding what your hourly rate should be. This will directly affect how much you make as a freelancer, what the perceived value is for your services within the industry, and how you’ll define your personal brand.
Test your way into pricing your services by launching a freelance business while you still hold onto your day job. Start high with your pricing and gradually move down (if you have to), but keep in mind that the best freelancer-client relationships are borne out of both fair prices and realistic expectations.
One of my favorite clients I worked with way back when I started freelance writing was from a freelance marketplace website—PeoplePerHour.
The reason I had such a great relationship with my first client, is because I was bringing on a lot of domain expertise in learning how to start blogging from scratch and building an online community (a high value to Martiel), at an affordable cost from her perspective. I was very satisfied with the hourly rate we negotiated, the workload each week, and most importantly – the work was engaging and interesting to me. Signing this client helped me validate my business idea of becoming a freelance content marketer.
Before you decide on an arbitrary hourly rate for your services, there are a few very important questions you need to ask yourself.
Do you want a few high-paying clients that take a significant time investment, or would you rather have a higher volume of lower-priced jobs that keep things fresh? You need to clearly define your strategy in order to attract the right clients for your desired business.
It can be very tempting to set your prices low when you’re beginning your freelance career, in hopes of bringing on so many new clients that you’ll offset the low income, with a high volume of clients. However, in the long run this is far from sustainable.. and can eventually break your business when you try and scale.
Do you know exactly how much you’ll have in expenses as a new business owner? $35/hr at your salaried day job is not the same as $35/hr as a freelancer doing work from home jobs. You’ll need to factor in all of the additional costs of doing business (office, phone, online tools, accounting software) and new costs of living (healthcare, taxes) that your employer is no longer subsidizing.
To help you calculate exactly what your freelance hourly rate should be, I architected this handy infographic over at CreativeLive.
How to Calculate Your Freelance Hourly Rate architected by Ryan Robinson and created by the incredibly talented Rachel Frankel at CreativeLive.
If you want to take this calculation a step further, check out this awesome online calculator based on this equation from the team over at Beewits and check out my favorite motivational quotes to fuel your freelance hustle this year.