As a freelancer, setting a price for your project is a tough task.
While freelancing gives you flexibility, it’s difficult to determine the price for your project. In this post, let’s explore ways to calculate your freelance project price.
- 1 Consider these factors before calculating your freelance rates
- 2 Different pricing models for freelancers
- 3 How to calculate freelance rates
- 4 Resources to help you determine your freelance rates
- 5 Tips on setting freelance rates
- 6 A practical guide for all freelancers
- 7 Bonus: The best way to collect fees from your clients
Consider these factors before calculating your freelance rates
Before setting your rates, here are a few things you should know:
1. Industry rates: Find out what others in your industry charge. You can refer to survey reports that give a detailed idea on this.
Here’s a survey report by a freelance writer’s community. You can find out what are the average rates for a blog post, whitepaper, and other long-form content.
2. Your offer: You should have a solid offer before you set a price. Your offer is basically a bundle of services that you will offer to prospects, for which you will get paid. You need to be specific about what you offer.
For example, if your service is video editing for beauty influencers, here’s what a specific offer looks like:
“4-6 edited fashion videos for IGTV and YouTube, of 5 minutes each; The videos will be edited in alignment with the personality and personal brand of the influencer.”
This is basically what you offer and the value your clients receive. Now let’s get started on setting your freelance rates.
Different pricing models for freelancers
1. Hourly pricing
You can calculate your freelance project’s price on the basis of the number of hours you have spent on the project. You can use oDesk, a time-tracking software that allows you to track computer activity as you work on the project.
Charging on an hourly basis is most recommended for people who are just starting out. There are many time management apps which help you to be on track when you work independently.
Hourly billing is not good for profit or for efficiency. We do not recommend this because you cannot charge in advance. And the total amount may surprise the client later.
2. Project-based pricing
In project-based pricing (or value-added pricing), you charge the customer on the basis of your experience and expertise required to complete the project. You’ll need to consider the full scope of work and quote a fixed fee to the client. You can also ask them to pay you in advance, be it 50% or 100% (or whatever you feel comfortable with).
This approach works best for experienced freelancers because you calculate a price that takes into consideration not only your time but also the value you offer to the client. Project-based pricing is a little tricky to get right on the first try.
A freelance retainer agreement is a contractual relationship between you and a company, guaranteeing a certain amount of work (either agreed via a predetermined amount of hours, or a project with agreed tasks to be completed) at a specific rate for an agreed amount of time.
This is best suited for freelance professionals who are industry veterans and highly sought after.
How to calculate freelance rates
If you’re planning to do freelancing full-time, here are the steps you can follow to set a price.
Step 1: Calculate expenses
Make a list of every little expense you incur as a freelancer. This can be internet fees, website hosting, and software costs to more general costs such as rent and office equipment.
Begin by fixing the amount you need to earn per month to cover basic living expenses by selling your handmade products online.
Also know what the income tax will be. Here’s a guide to income tax for Indian freelancers.
If you’re unsure about what the expenses may be, network with other freelancers and get started.
Step 2: Number of working days
How many working days per year or per month will you be working?
In general, the working days in a year will exclude the number of weekends, bank holidays, festivities, sickness, and vacation days. This will be an average of 200 to 250 working days a year.
Step 3: Calculate your minimum acceptable rate
This is the absolute basic rate you’ll be willing to work for.
Here’s a formula to follow:
((living costs + expenses + target salary / (hours worked a year)) + tax = minimum rates
Simply apply the results of what you got from the other calculations and find your minimum rates.
Remember, this rate can increase based on your experience and skills over time.
Related read: 5 secrets to make more money as a freelancer in India
Resources to help you determine your freelance rates
Here are some data, survey results, and tips from real freelancers to help you set your own rates:
- Freelance writing rates: a survey conducted by PeakFreelance
- Global statistics for freelance earnings
- State of content ops & outsourcing report: a report published by Semrush which includes insights on what companies pay freelance content writers and strategists.
- Shreya Pattar: A freelancer turned agency owner, who gives helpful tips on freelancing including how to set prices
Tips on setting freelance rates
Here are a few general tips when setting freelance rates:
- Your rates are flexible, adapt them as you gain experience
- Understand the scope of the project before quoting your price
- Interact with other freelancers to get real market insights
- If you reduce your price, it’s because you reduce the project scope
- Increase prices for rush projects
A practical guide for all freelancers
We cover other pain points like getting payments on time, finding platforms for freelancers and current industry data in this free eBook.
Bonus: The best way to collect fees from your clients
Collecting payments from your freelance clients can be a struggle. There can be a lot of back and forth with invoices. The most professional way is to create a landing page. You can also showcase your portfolio here and gain the client’s trust.
With Instamojo Smart Page Builder, you can create a landing page that you can send to customers and collect payments. You can also send it as part of your pitch.
Sign up for free and create your own landing page.