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Ok this goes to one of my freelancer friend who sent me one question last week. He complained that I do not write about freelancing. But if you take a close look at the posts here in this blog, you will find that many of the posts also talk about freelancing. We keep our posts universally applicable to most of the work from home businesses. To help my dear reader friend, I am writing specifically about freelancing.

If you are freelancing for some time now, then you will probably notice that you work for different rates. Sometime you get a lower rate that what you seek for, sometime your standard rate and sometime you get a better rate than what you expect. This happens. However there are some people who stand by their fixed rate. In such cases you may lose many projects if you are too stubborn.

Now, how do you fix a rate that is acceptable to you and to your clients? You need to fix a standard rate for your freelancing service. How do you do that?

Before we proceed to see how to fix a rate, let’s find answer to another question. Is it really important to fix a rate? The answer is yes. You need to fix a RIGHT rate for your freelance service. If you fix a wrong rate for your services, then you will have to pay for it for a long time and you know it may eventually cause your freelance business to shut down.

We will talk about few general principles that govern freelance rates. When you decide to fix your freelance service rate, you should look at the following factors -

  1. How much you need
  2. What your competition charges
  3. What the market trend is like

What is your freelance rate (How much you need)

The freelancing rate that you ask for should be adequate to meet your needs. Your needs will include your personal expenses as well as any business expenses. The rate should include your personal costs such as paying the bills. It should also include the overhead costs that you incur during the projects. The overhead cost is important but many freelancers forget about them while starting out.

What are these overhead cost? Overhead costs include-

  • Marketing - you need to market your services
  • Office cost (if you have any)- Includes rentals, office cost, equipment cost, people cost
  • Software expense
  • Record keeping, accounting and bookkeeping
  • Professional education for yourself in your chosen field
  • Down time and sick time
  • Health insurance costs

There may be other costs depending on your area.  

What Your Competition Charges as freelancing rate

Your freelancing rate will also depend on what your competitors’ charges. If they charge lower than you then probability may be there that you do not get many projects. If they charge higher than you then there may be two possibilities- a) you get more work b) you can increase your rates

But how do you find out what your competition charges? There are many sources from where you can find out about it-

  • Competitor websites- One simple way to find it from the websites of your competitors.  Freelancing services generally publish their rates in their websites. You will find various rates for various services. Check several competitors’ websites.
  • Freelancing income surveys - Several organizations and companies perform conduct income surveys. From these surveys, you will find out the money a professional in your field earns.
  • What in-house professionals earn - Recruitment and personnel departments update their in-house salaries. You can find out about the salaries of the profession you want to know about.

What the market trend is like

Next check what is the market trend. Freelancing services, like any other service depends on the demand and supply. When the demand is more and supply is less then the price tend to go up but when the supply is more and the demand or it is low, then the prices go down.

Sometimes the market may be ready to pay much higher than what you charge. Sometimes, the opposite may happen. SO you need to adjust your rates according to the market trend. Reevaluate your rates periodically. If you see a particular trend in your field, then you can take advantage of such trends.

You can even adjust yours services to fit a particular trend. You can always offer a slightly different but related service to the market.

Share Your Pricing Strategies

If you have been freelancing for some time now or if you have just started, in any case, share your own pricing strategy with the readers. How do you decide your own freelancing rates? What are the factors that you take into consideration while deciding the rate?

Please remember that depending on the project and situation you may need to vary your freelance rates a little. Do that and see the results.

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