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Tips to Set Your Freelance Rates the Right Way

Are you having trouble setting your freelance rates? Here are a few things to consider when setting up your rates.

Setting the right price for your freelance services is crucial to achieving your financial goals. Unless done correctly, setting the rate too high may leave you struggling to win clients, or putting it too low may devalue your skills and experience.

If you have difficulty setting your freelance rates, we will offer tips on striking the right balance between your rates and expertise.

1. Understand the Value of Your Skillset

Understanding the value of your skills and expertise is the first step toward setting a freelance rate. Thus, consider all the education, certifications, and experience you have on your back and the struggle and investment you have made to learn the skill you are offering.

The Salary official website offers an excellent tool for estimating the median salary of different services. You can estimate your yearly income and then break it down into the number of hours you work each year to calculate your hourly pricing.

Payscale, Indeed, and Glassdoor are a few other websites to estimate your hourly rate. To avoid undervaluing your skills, you should estimate your charges using these sites, set a minimum threshold, and never go below it.

2. Choose the Right Pricing Model

Generally, two types of pricing models are prevalent; hourly and project-based. By choosing a reliable pricing model, you can set the proper rates for your freelance projects. You can get paid for every minute you spend on the project by charging an hourly rate. However, as most clients prefer asking upfront for the project's cost, hourly payments may be challenging to agree on.

Similarly, it's easier to win projects with project-based upfront payment, but gauging the required effort often doesn't work out as planned. Hence, you will have to put in extra work without getting paid for it or request a budget increase from the client, which is pretty embarrassing.

Thus, if you wish to charge for your projects correctly, consider requesting hourly payments at the same rate as you calculated in step one. It also accounts for revisions, so you can charge more if the job takes longer.

The Upwork rate calculator tool provided by the thehireups website can estimate how much you should charge per hour or project for a particular service based on your skill level. The exact rate can also be used for other platforms. Similarly, the freelanceratecalculator website provides a handy spreadsheet to list your expenses and calculate your rate accordingly.

3. Compare Your Rates With Other Freelancers

Comparing your freelance rates to those of other freelancers who offer the same service as you are, is another innovative way to determine how much to charge.

Platforms such as Upwork, Fiverr, and PeoplePerHour allow you to look at other freelancers' rates, so you can start researching there. It's essential to consider the freelancers' experience, expertise, and certifications you're comparing yourself with. You can charge more if you have more experience and knowledge than them, and vice versa.

Additionally, you should check their authority on the freelance platform you're just starting out on. Charging less at the initial stage is worth it.

4. Explore Your Client

Understanding your client better will also help you accurately determine the freelance rate. On most freelance platforms, such as Upwork, you can view a client's past jobs, which will give you an idea of how much the client has paid for similar services in the past.

Likewise, if the client has recently hired other freelancers in the same field, examine their profiles the same way you did earlier by considering their authority on platform, expertise, experience, etc. Then, compare what the client is paying you with what he has offered them.

Thus, before you pitch to your client, spend some time exploring their hiring history. If you feel that the client is undervaluing your services, you can ask for a raise or reject the proposal. We have an article explaining how to ask for a raise in price without losing your client if you are unsure how to go about it.

5. Analyze the Competition in Your Niche

Your niche's competition is another factor to consider when setting your rates. If your niche is saturated with dozens of freelancers ready to grab the job, you may want to set a lower rate. Likewise, you can apply the principle of supply and demand to charge higher if your niche is so specific, with only a few people knowing the skill you're offering.

The easiest way to analyze competition is to search for gigs(on Fiverr) or accounts(on Upwork) for specific keywords relevant to your services. Higher results mean more competition and vice versa. One of the primary reasons people fail to win clients is that they charge them more than their competitors, making their pricing incompatible.

6. Explore the Local Market

Exploring the rate of services in your local and client markets is another way of figuring out your freelance rates. Check local job listings or speak with people who currently hold the same position at local agencies and companies. Once you know how much the same job would have paid you, find out how much the same project would have cost the client locally.

Depending on where you live, you can charge a bit more or less than your or your client's local charges. Salaryexpert and Salarylist are great resources to check location-based salaries for different positions. Compare location-based salaries and use them as a reference when charging your clients.

7. Take Into Account the Project Deadline

Another parameter that may influence your freelance rate for a particular project is urgency. Calculate the pressure and sacrifices you will have to make to meet the deadline and price the projects appropriately. You can charge less when you have more flexible deadlines, so you can work at your own pace, while charging more when it gets tight.

Fiverr has a section dedicated to urgent projects, requiring you to complete them in the shortest amount of time possible. If your services match those listed there, you can certainly set a higher freelance rate.

Set Your Freelance Rates the Right Way

The tips in the list will help you better determine your freelance rates. Ensure that your rates reflect the value of your services and time. Also, keep your pricing flexible, and don't hesitate to take it below the threshold when you don't have a job in hand.

When deciding on your freelance rate, it's equally important to keep track of your annual or monthly expenses. If you also have trouble budgeting correctly, many apps such as Mint, Quicken, Personal Capital, etc., can assist you in this regard.

Source: https://www.makeuseof.com/tips-to-set-freelance-rates-right-way/

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