Five fee-setting strategies for freelancers
Cover of "The Freelancer's Bible" by Sara Horowitz with Toni Sciarra Poynter.
This list an excerpt from "The Freelancer's Bible" by Sara Horowitz with Toni Sciarra Poynter. Workman Publishing Company, 2012.
Tune into Marketplace Money this weekend for more tips and an interview with Sara Horowitz.
1. Track your time -- Task by task. You can track it pencil-to-paper or use an online tool (try searching under "personal time tracking," "free time tracking software," or "time tracking freeware").
2. Avoid feast or famine pricing and know your rock bottom -- Find the zone that reflects your value, but leaves room to negotiate. This means doing market research and getting a sense of job scope and, if possible, budget from the client before you crunch numbers. Going too low or too high causes stress and costs time. "When I've undercharged, I feel taken advantage of, even though I know it's my fault." Or: "I once spent days pricing out a project. When I laid it out on the phone to the prospect, there was dead silence. Then he said, 'Wow. We're way far apart.' The call ended fast, with disappointment on both sides."
Also know your lowest number -- the one you won't go below, no matter how great the gig is.
3. Do your homework -- Learn the benchmarks for rates in your industry. Some professional organizations post info on their websites (for example, the Editorial Freelancers Association: the-efa.org/res/rates.php) or have a legal/contracts arm that can offer negotiating help. Check industry discussion boards and professional networking sites where people swap stories and strategies, and magazines and books, too: "When I started freelancing, I often referred to various industry standard books, like the Graphic Artists Guild Handbook of Pricing and Ethical Guidelines."
You can even talk to trusted pros who use services like yours: "I had breakfast with an agent who's also a friend, and asked her if my rates were OK. I was relieved to learn I was in the upper third of what she usually gets for her clients -- and really glad I'd raised my rates from where I'd begun."
4. Educate the client about what you're worth -- Calculating and communicating your value to your clients is your job: "I see it as a service to my client to be clear about what I'm worth and why. It's not their job to know what I do. A really good freelancer makes it look effortless. So I make sure my clients know something of the skill and thought that go into my work. It shows my chops and shows that I care."
5. Don't fear fluctuation -- In some industries, it's pretty much "one price fits all" for a given task. But if there's a price spectrum, quote 'em as you see 'em. Do you see hours of meeting and revisions in your future? Think of the cost to you of serving that client -- the time you won't have for other projects, plus the aggro factor. And if it's your busy season or you're cramming this gig onto a full plate, that can be another reason to raise prices.
On the other hand, will this gig boost your career, add visibility, or give you a new skill? Do you believe in the project and want to help it happen? Do you need work? All are valid reasons to allow a discount.
Check out these other resources for freelancers
Get health insurance: https://freelancersmedical.org/