One of the biggest (and most frustrating) mistakes you can make as a freelancer is under-pricing your product or service. In other words, you decide to take on a project for less money than you should. Soon enough, you are regretting your decision and wondering what you were thinking.
While this is a common problem, here are 5 tips to help you answer: How Much Should I Charge?
1. Get All the Details of the Project Upfront
This is one of the most important things you can do. It is essential that you know what the project entails, down to every last detail, to ensure that you are giving an accurate quote. Don’t make a final quote on the project until you know the exact details.
2. Don’t Low-Ball the Bid Just To Get the Deal
As common as this may be among business owners or freelancers, it is a practice that you want to avoid. When you do this, winning the project is the equivalent of losing.
Why spend more time earning less money when you don’t have to? Instead, keep your schedule open for a project that pays your rate.
3. Consider Having a Rate Sheet to Guide You
This is one of the most overlooked aspects of a successful small business. While no two projects are the same, you should have a basic rate sheet to guide you through the negotiation process. You don’t have to necessarily share it with your client, you can just use to guide you based on the needs of the client. Need an example rate sheet? There is also a great article by Laura Spencer on pricing services that has some great discussion on this issue, especially in the in the comments section. It is targeted towards writers, but has relevance for anyone facing this issue.
On your rate sheet, make sure you include both “per project pricing” as well as an hourly rate. This will help you make an accurate quote no matter how the client wants to pay.
Note: your rate sheet can and will change over time.
4. Don’t Be Shy About Explaining Your Pricing Structure
Some prospects will not understand where you are coming from until you explain your price and all that it entails. It is never fun to justify your rate, but if this is what it takes to win the job it is something that you should be willing to do.
Don’t take this as an insult. Instead, take it as somebody who doesn’t know your business and how it works. Once you educate them as to how you set your price, you can move forward with a clear mind.
5. Account for Changes in The Future
While some projects are cut and dry, others will include add-ons at some point in the future. This could be anything from multiple edits for a freelance writer to additional design work for a web developer. If you are anticipating that this could happen in the future, make sure you lay it out on the table upfront. This way there are no surprises down the road.
As unfortunate as it may be, most freelancers have to learn this lesson on their own. At some point, you will likely underprice a project and realize that you made a mistake. All you can do is complete the job for the price quoted and learn from your experience.
Now To You
How Do You Solve the Pricing Dilemma?