Setting your rates can be one of the most challenging aspects of freelancing, especially when you’re just starting out. You need to find a balance between not undervaluing your work and being competitive enough to attract clients as a new freelancer.
Here are some methods to help you determine your starting rate:
- The Drop Three Zeros Method: Take your ideal annual salary, divide it by two, and then drop three zeros from it. For example, if you want to earn $80,000 annually, your hourly rate would be $40 ($80,000 / 2 = $40,000, then drop three zeros).
- Double Your “Resentment Number”: Determine the lowest rate you’d work for without feeling resentful, then double it. If you’d work for $15/hour, at the very least, set your rate at $30/hour.
- Market Research: Search for the average hourly rate for your service in your area or industry. This can give you a good baseline from which to start.
Remember, these are starting points. You can and should increase your rates as you gain experience and build a portfolio.
Some additional tips for pricing:
- Consider offering package deals for common service combinations
- Don’t be afraid to negotiate, but also know your worth
- Be clear about what’s included in your rate (number of revisions, etc.)
Be prepared for some trial and error at the beginning. Let’s say you’re interested in freelance social media work. You do some market research and see the average hourly rate ranges anywhere between $15/hour to $100/hour, depending on experience and job specifics. That’s a big range, and there are a lot of differing factors involved when deciding how much you should charge.
You might decide to start working for around $50/hour but you might find it close to impossible to find consistent work with your experience and skills especially if you’re just starting out, so you may have to slightly lower your initial rate in order to find your first few clients.
Negotiation skills are crucial whether you’re freelancing or working a 9-to-5 job. To help you sharpen these skills, I’ve created a comprehensive video guide on salary negotiation. This video isn’t just theory – it provides word-for-word scripts you can use when speaking with potential clients.