A common problem among Freelancers when first starting out is “how much should I charge?” It is particularly tricky given our current economic climate. Clients have a tighter budget, so will inevitably shop around for a cheaper rate.
My accountant often jokes ’pay peanuts… get monkeys’. That may well be true, but there is a huge reality check between knowing your worth as a Freelancer and feeding the family in a difficult climate. No-one wants to price themselves out of the market.
Do you find yourself in a quandary when a client asks, “how much?” If you do, try the following tips which have served me well over the years.
1. Do your homework
You may have moved from being employed to freelancing, so may have a rough idea what the going rate is. If you don’t, be a secret shopper. Find out what other Freelancers are offering in your geographical area, or if you’re not tied to any particular area, then check what they are charging in your sector.
A few things to consider and ask yourself:-
- Is this a one-off piece of work? If it is, then you might decide to charge slightly more.
- Am I looking for a long-term working relationship? In which case, you may decide a slightly lower rate for repeat custom.
2. Bundle Services:
Some writers/consultants donate articles to magazines and websites to start building their career and it is a practical cost-effective way to PR your skills. Get creative, decide what services you can afford to bundle as a BOGOF (buy one, get one free). There’s a reason why supermarkets do this every week! You could also offer an introductory offer to get on board.
3. Negotiate a Retainer
Consider negotiating a contract for a retainer with set hours per month at a fixed rate. This may enable you to work around higher priced work –or your retainer may be the higher priced work. I have had contracts with clients with varying priced work. i.e. with Exhibition work at a higher hourly rate – believe me you earn it!
4. Could you charge overtime?
Employed staff often have overtime rates and/or other perks for working outside normal hours. Without appearing too ruthless, think about the cost to you. i.e. Childcare might be more expensive during certain periods, as will inevitably, travelling at peak hours.
I have attended financial courses in the past run by accountants who will give you long complicated math formulas to work out how to cover all your overheads. In some cases this may work. However, on top of your hourly rate for your own expertise, ensure you cover all your other costs such as telephone/stationery/postage, etc. (N.B. some 0845 numbers can be crippling).
- Discuss these
- Write them into your contract
- And claim them
My clients often request itemised bills specifically for this purpose. When my daughter was a baby I worked as an executive head hunter with some clients happily paying an hourly rate which included an allowance towards the phone. Be flexible but don’t end up working for nothing.
Tip: My Accountant recommends charging higher hourly rates when you are on site as you are inaccessible to other clients. Valid point.
Travelling costs and time are often missed off. In my experience clients have never refused travel costs and time i.e. you may be attending an event which they cannot themselves. *Train fares are expensive and petrol costs increasing.
When you’re pitching work or attending meetings with clients, there has to be a percentage of goodwill, but there also has to be a cut off point. It is easy to spend hours on the phone discussing projects and giving advice and not getting paid for it, but this is project management which should be charged.
Be competitively priced and reliable – clients will re-use your services.
And remember the client is always right…even when they are wrong! Keep a sense of humour and think long-term.