Recent surveys asking how freelancers feel about their jobs show that most are happy about their decision to work from home. They say freelancing makes them feel in control, empowered, independent, and productive. Some even get to boost their freelance rates and earn higher pay. Freelancing helps people design their lifestyles to benefit them the most.
Freelancing has its pros and cons. If you’re a seasoned freelancer, the sky’s the limit regarding earnings. But let’s be honest: there are also freelancers out there who are unhappy with how much they earn.
It can be because most freelancers are career shifters used to getting a fixed salary. But, it can also be because they don’t know how to set their freelance rates for their services. Freelancers sometimes feel that clients will turn them down if they price their services too high.
Let’s take a look at some freelancing data from Payoneer.
What’s Going on in The Freelancing World Now?
Payoneer conducted an income survey, revealing that almost 70% of freelancers wanted to make more money from their businesses. According to the survey, the average hourly rate for different freelancers across the globe is $19.
Other findings include the following:
- More than 60% of full-time freelancer respondents had to use their monthly savings every month to cover the total cost of their living expenses.
- 26% of freelancers revealed that the reason behind such an income shortage is that they haven’t accumulated enough clients to cover their monthly living costs;
- That 41% of them say that they have just the right volume or number of freelance work to support their needs and
- 33% asserted that they have more than enough workload to manage.
If more than half of the freelancer population is more than capable, then what’s the real problem? How come that 60% of them don’t earn enough to cover their monthly living expenses? Do you need more than two or three clients to survive financially?
Well, the best solution to address all these concerns is to know how to charge premium rates for your services. You can live with one or two full-time clients if you set your freelance rates decently. You don’t have to over-exhaust yourself to be able to raise enough income to cover all your needs.
What You Need To Know First
There are two standard pricing models when it comes to freelancing. The hourly pricing and the project-based (fixed) pricing. While these two are self-explanatory, there’s a much deeper context between these two pricing models if you’re a freelancer. It’s essential to know these models when setting your freelance rates.
Hourly Pricing
It is common for beginners to set an hourly rate that they think is acceptable for the type of skill they offer. If you choose this pricing model, you must know the average rates of freelancers offering the same services. Luckily, there are many guides and surveys about how much you can charge based on your skills.
But those freelancing for a while have a different approach to hourly pricing. I calculate my hourly rate depending on how much money I want to earn and how many hours I want to work within a month. Let’s say I do web design as a freelancer, and I want to make $6500 per month doing 30 hours of work per week.
Then, the correct hourly rate would be $6500 ÷ 120 hours per month or $54.16.
The hourly pricing model works best when you cannot estimate how long a project can take you. As freelancers, we will often meet clients who know what they want but would change their minds later on. Changing plans and revisions would hurt you if you’re on a project-based rate. When you set your freelance rates hourly, you’ll get paid no matter how many revisions you do.
The hourly model has many benefits but can also be limiting. Because the longer you do the work, the more efficient you’ll be in doing it. What typically takes you 10 hours to design would take only 5 hours or so as you become more experienced. You could implement your tricks and shortcuts, which could disadvantage you.
Why? Because you produce the same high-quality work but get paid way less because it took fewer hours.
Project-Based Pricing
Switching to a project-based model will allow you to charge a much higher rate. This model allows you to charge clients based on your value. For example, you’d run and manage your clients’ ad campaigns for a fixed price of $2500 per month. Running cost-efficient ads with high conversion rates takes a lot of experience and know-how. If you can do that for 10 hours in a month or less, then you’d take home $2500 regardless of the hours you spent on the campaign.
Most clients look for quality work. If your job provides ROI, asking for higher rates is not hard. The only risk in the project-based model is sometimes you’d have to cover additional costs if you did not estimate the project’s scope correctly.
Simply put, charging hourly can have many benefits, but pricing your services based on a project scope can help you earn more.
Why?
Because you don’t need to exchange time for money, okay, you’d still do (in reality). But, you will have more freedom to outsource the projects without the client expecting you to be there for them throughout the day. This model will work well for you if you can guarantee results and quality work.
How Do You Charge Premium Rates as a Freelancer?
Establish a Good Reputation
When you’re new at freelancing, you might feel you can accept any project regardless of the rate. You’re a WordPress developer who signed your first project with a client. Getting that first break is hard. But the challenge doesn’t end there. You need to determine how to leverage in order to close more projects. This is why sometimes, it’s acceptable to start with a measly rate.
But you can’t survive if you keep a low rate after your first or second client. You must upgrade your freelance rates if they refer you to people they know. You must establish your reputation as a fantastic developer, not as a good bargain. The referral speaks for itself — your clients were impressed with your service. So, if they were impressed, that’s your go-to signal to peg higher rates for your succeeding projects.
Create Something Valuable for Your Clients
Though increasing your rate is beneficial, be modest enough to acknowledge whether you deserve it. As you already know, your clients are business people who invest in you because they believe you can help build and grow their business. However, if you can’t offer that advantage to them, rethink if freelancing, or the service you’re offering, is really for you. You must justify their investment and put your best foot forward, too.
These are simple recommendations that can help you add value to your client’s business:
- Make every output excellent.
- If your client is reasonably not satisfied with your outputs, go out of your way to find solutions to remedy the problem.
- Make sure to meet the deadline.
- Keep positive and open communication with your clients, even if you get annoyed by them sometimes.
- Find ways to be more efficient and productive. While automation can boost your client’s profit margin, it can also improve your consistency and quality of work.
- Remember to build and nurture partnerships and relationships. Your clients are also human beings who need to interact and build rapport with others. Even if you’re too busy coding or designing your project, take care of the relational aspect of freelancing.
Invest Aggressively in Educating Yourself
You have to prove your worth before you can justify a rate increase. This doesn’t mean you must go to school again and finish another degree. This only means you have to be proactive in finding the means to educate and improve yourself. And it doesn’t end there; you must also demonstrate your skills through work-related applications and work samples.
Develop a Specialty
When freelancing, you must remember that you won’t earn as much if you take the Jack of all trades but master of none route. Instead of being a generalist, choose a niche or area of specialization and master it.
If you want to be a top-caliber WordPress developer, be aggressive in learning everything you need to know about the job. Hone your skills until you can master everything about the program. If you want to be a highly paid copywriter, master topics like SEO, digital marketing, social media, etc. All these can help you be a well-versed copywriter ready to upgrade your clients’ businesses.
Clients are willing to pay for experts. But your reputation as a subject matter expert can be compromised when you do too many things simultaneously. This can also compromise your chances of pegging higher freelance rates.
Publish Your Rates on Your Website
Experts suggest increasing your rate by including a pricing page on your website. You need to get paid for what you’re worth. If you publish your freelance rates on your website, setting the right precedent and persuading the right clients to partner with you is easy.
It would be best if you can create an official pricing sheet including the following:
- Rush project rates
- Cross-sell or upsell services
- Hourly update or maintenance work
- Industry-specific rate
- Per project rate
When you set the price for your service, you eliminate clients who can’t afford your rate. Those who can afford to pay you can also set their budgets from the get-go. It’s a win-win for you and the client.
Takeaway
While knowing and implementing these things can be confusing and challenging, one thing is certain: Freelancing may not be for everyone, but if you’re willing to learn the trade and improve yourself, you can successfully make it in this industry.
Angeline Licerio
Angeline Licerio is the blogger behind Dollarmize.com. After working online as a writer and SEO strategist, she decided to start this blog to give advise to people who would like to earn money online. She is also the founder of SEO Tutorials for FREE, a Facebook community that helps aspiring freelancers and SEO specialists to kickstart their work from home journey.
