How to Price Your Freelance Work Like a Pro

October 23, 2020

No nonsense pricing tips to sell your work like a pro and maximize your profit.

Wondering if you are undercharging for your work? I’ve been there. Want to make a decent great income from creative freelancing? Same. Thankfully, there is a systematic way to figure this stuff out, outlined in simple steps for you to follow below.

Hourly rate vs. project-based pricing, which one is better?

The short answer is… it depends. Too vague? Don’t worry, there’s a simple trick.

Assess your client’s needs before choosing how to charge them.

Hourly rate is better for clients who get stuck on the details or only have a vague idea of what they want. Such clients are likely to request multiple edits to get the perfect outcome, which means you’ll end up billing more hours.

Project-based pricing is better for clients who know exactly what they want and want it very much. You might finish a project much faster than expected. Imagine spending just 5 hours total on a project that your client loves and is more than happy to pay $5000 for. By all means, sell it for $5000!

If you did an hourly rate instead, $100 per hour would still only make you $500, a mere 10% of would you could be making based on the client’s willingness to pay. This happens more often than you think!

Stop undercharging – make more money than you’d expect by matching what a satisfied client is willing to pay.

How to optimize hourly rates

First things first: given your skills in the service you’re selling, figure out how much your work is worth per hour.

How you choose to calculate this is up to you, and there are lots of valid formulas shared on the internet. We like this guide.

Once you have that number, AKA what freelancers think is the acceptable price, multiply it by 1.5x (maybe even 2x), and that’s how much you could be making per hour for your creative projects. How?

If not already at this upper limit, you can definitely achieve it if you want. You’ll need to learn how to work with clients the right way, such as reducing risk from their perspective (discussed below), being a good communicator, and showing off a great track record through your portfolio and previous ratings.

How to optimize project-based pricing, AKA value-based pricing

There’s a common trap that creatives fall into when doing project-based pricing…

“I should price my projects based on how much they’re worth, right?” Wrong.

Instead, you should be charging however much the client is willing to pay, which may well be more than the objective “worth” of the project.

The rate you impose dictates how much you make per hour, provided you have the skills to match.

You can choose to charge $2000-$5000 per project, but not every client budget will be in that ballpark.

If you gave Netflix a quote of $2000 for a motion design job on Stranger Things, would they hire you?

The answer is a definitive NO.

For Netflix, the price you gave is so low, they’d assume you’re not good enough for the job, hence increasing the risk they’d take by hiring you instead of someone else charging 25 times more.

That doesn’t mean you weren’t qualified for the job.

Price the client, not the job.

Flexible value-based pricing means you can score deals at a much higher hourly rate.

Reduce risk to justify high rates

Risk is a primary factor that stops leads from becoming sales. If you want to make more sales and do so at higher rates for more profit, read on.

The prospective client sees your portfolio and asks, “will this creative professional…

… be the right fit for the project’s needs?”
… deliver the assets in time?”
… be communicative and easy to work with?”

Each of these involves a risk the client will take. Whoever answers (or seems to answer) these questions the best is the one the client wants to hire.

Talent plays a less than 25% role in getting hired for a project according to Joey Korenman, School of Motion founder and author of The Freelance Manifesto.

Thus, as a freelancer, learn to excel at managing risk. Make your leads feel like you are the safest freelancing option available for their project. A great way to do this besides good communication is by gathering ratings and reviews from previous clients. You’ll build credibility by letting your quality work speak for you. Platforms like Queue make this process easy.

Conclusion

What prevents you from charging more is pricing the job rather than pricing the client.

Pricing your freelance work like a pro is all about figuring out how much each client is willing to pay and reducing perceived risk from the client perspective.

Be confident. The best way to upsell yourself is to truly believe you are the best fit for the job.

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