One of the most nerve-wracking questions a client can ask you during a discovery call is this: “How much is your rate?” It can catch you off guard even if you already have a price in mind. What if it’s too high and I end up losing this client? What if it’s too low and I end up getting shortchanged?
For Price: There’s no Actual Magic Formula
First, hear this: There’s no actual magic formula. Sure, there are some guides and ballpark figures you can fetch in Google, but pricing is typically based on how much experience and knowledge you have, what results you can achieve, and what value you provide to your end client.
The vital thing to do when setting your prices is to think of your freelance jobs as a business. And naturally, a company will have costs. You’ll have general costs, bits of software, transaction costs such as Stripe and Paypal fees, plus you’ll need to pay tax. All these things need to be rolled into the price you’ll charge at your end of your customer or client. With all the costs to consider, your price should leave you a decent level of taking home from the business. Ultimately, your freelance business needs to be profitable.
While you should research to have an initial understanding of what people charge for what you offer, be very careful. Do not base your prices off their prices. Why? You have no idea how successful their business is financially. Yes, use research to give you an initial starting point and benchmark, but use that as lowball – as the lowest that you might want to consider charging.
Instead, make sure that what you are providing is massive value for the price point you choose.
Remember why people are hiring you. What are you providing? For instance, if you create sales pages, then you know that clients are going to make a lot of money off what you create for them. From there, you have an idea of the value of your product and service. Keeping that in mind as you’re starting to think about where to set your prices is massively essential.
It’s also important to note that there are massive variations in prices for the same thing. Remember that people will pay a million pounds for a logo, and some will pay ten pounds for a logo. Where do you want to be seen in the marketplace? What does that look like for you? Where do you want to position your business?
As you think about that as well, decide on pricing that is based on a flat rate or project pricing, rather than hourly pricing. Hourly pricing ultimately means you end up being penalized for your efficiencies. As you get better at something and you get good at it, you would naturally turn in outputs in lesser time. Thus, instead of getting paid for what you deliver, you would be shortchanged with an hourly rate.
Moreover, make sure that when you’re quoting your pricing, you’re charging enough to keep you interested in the project. Make sure that when the price is set, you’re not going to be discouraged, thinking that you’re doing so much for such a low price. Make sure that the pricing is on the right place so that you can be dedicated and interested in the project.
Lastly, do not discount. Discounting your prices gives the entirely wrong message for the relationship that you are building with your client. Ideally, you want your client to be coming back to you in the future for more projects. If you discount your first project, you’re setting the tone of the relationship into one where they will always want a discount.
If somebody says to you that your price is not within their budget, you can have that opportunity for you to remove some value and therefore reduce the amount down. This way, you get to keep the client, and you’re not undervalued. As you deliver exceptional value, your client would surely be more than willing to pay more.
As you shift your mindset from “freelancer” to “business owner”, you’ll soon gain the confidence in quoting your prices and coupling it with the value that you will deliver, instead of letting clients have the upper hand in dictating the working budget. There are a lot of clients who understand the value of what you have to give; those that don’t would only prove to be challenging to deal with, and you’re better off investing your time in better clients.
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