Calculating Your Freelance Rates - Part 3

February 15, 2008

The second question you should ask yourself is: What will my market bear?

Answering this question will often lead to wide and varied answers. You might think $65 per hour is good but what happens when you find out your biggest competitor charges $25 per hour? I see this happen time and again, even in highly skilled areas.

Or, maybe you did a Web search a saw an ad for Web design at $10 per hour. This is reality. This is why it’s so important to look for underserved groups or niches. Choose an industry that has been overlooked and think of every way you can add value to those clients.

If your goal is to become a full-time freelancer, you may realize at this point that it will take longer and be more costly to make your business work. That’s ok. Whatever you do, don’t lower your prices to compete. Stay out of the pricing game.

Sure, you can charge ten bucks an hour but your chances of making it work are very close to zero (especially if you like to sleep). At this point, you should find out what others are charging in your larger geographic area.

Research surrounding states. Look for small and large companies alike. More often than not, larger companies can only afford to have large clients. Is anyone marketing to solo attorneys? Probably not.

(I always recommend that, as a freelancer, you try to hit your local market. Even if you plan on working with clients from all over the country. I found that it helped my confidence level by working with clients one-on-one until I felt comfortable working primarily via phone and email)

You may also find out through your research that many freelancers are marketing to EVERYONE. Don’t fall into this trap either. To help you overcome the urge, look at your business from your customer’s point of view.

Will they see a lot of “talk” about how you work with all clients and you solve all types of dissimilar problems? Or will the local florist see that you’ve helped out other florists—creatively, simply, and without hassle?

Who would you feel more comfortable hiring, a one-size fits all (lower priced) firm, or someone who’s dealt with another client just like you?

Tags: calculating hourly rate, determine what to charge, what do i charge

Related posts:

1. Calculating Your Freelance Rates - Part 1
2. Calculating Your Freelance Rates - Final Installment
3. Calculating Your Freelance Rates - Part 2

Posted in Pricing