How-to-determine-your-freelance-hourly-rate

How to determine your freelance hourly rate

I’m confident in my ability as a designer and as a communicator. But, as a creative, I’ve found it difficult at times to put a price tag on my work. The difficulty lies in not only selecting an hourly rate, but also in determining how much time a given project will take.  For example, a logo design could take a few hours, or a few weeks.  I’ve also found that recommendations on the internet regarding freelance hourly rates all over the place.

How to determine your freelance hourly rate:

A simple way to determine your freelance hourly rate is to simply figure out your monthly living expenses. You should add everything; food, gas, car payment, rent, subscriptions, entertainment, internet, cable – basically everything you need to live. Then, figure out how many hours a month you are going to work. A standard eight-hour day gives you 40 hours a week and 160 hours a month. Don’t forget to factor in holidays and sick time.

A Basic Example

Monthly Expenses / Hours Worked = Hourly Rate

This is a basic example, but you can adjust your rate any way you want. You might not want to work 40 hours a week, you may want to work more.

Your rate should change over time

As you accumulate experience and gain knowledge or specific technical skills, you should adjust your hourly rate accordingly.

Straight out of school, I took on as many clients as I could for little to no money. This was the best way for me to gain as much experience as possible, and boost my portfolio. This was a strategic move and one that many entrepreneurs use to make a foothold for themselves in an industry.  I’m not saying that you should work for free, but be willing to charge a lower rate for a project that will give you a new set of skills or experience you do not already have. If I want to do a specific type of work, or get into a specific industry, I might do a couple free jobs that would help get my foot in the door. Think long-term. One free job now may lead to something big down the road.

Now, as I’ve gained experience, I think my value as a designer and problem solver has increased, and therefore allows me to charge more for my services.  I heard once that a client is not just paying for your service. They’re paying for your time and ability. They’re paying for the years you spent developing your skills, training and technical expertise.

Different clients call for different rates

I’ll admit that I bill clients differently. Sometimes for smaller clients with less budget, I give a set price for projects. These fixed prices come with fixed design options and limited revisions, that way I don’t end up losing money. Sometimes smaller clients take up more of your time because they’re working with a tighter budget and they are emotionally connected to their projects. It makes sense, a new business owner is trying to get the most out of every dollar they spend. Be ready to spend a lot of time educating these types of clients along the way.

I have no issue charging a decent-size client full price, or more. I also find that larger clients that use vendors often need much less hand-holding.

Don’t cheat yourself

If you already have a day job and this is your side hustle, then you should consider charging more for your time. What’s a lost weekend, or several nights of sleep worth to you?

 

It’s your business and your time

At the end of the day, it’s your business and you’re free to charge whatever you want. But, consider your peers with same skill and experience. What are they charging? Do some research. You may find you’re overcharging, but most likely you’re charging too little.

You should try to find a nice balance. If you’re too high, you may not get hired, but if you’re too low, clients may think you’re not qualified for the job. Charge your clients a price that makes them value you, and your time. Get paid an amount that makes you enjoy the work.

What do you think? How do you charge your freelance clients? Please discuss in the comments below.

Talk soon!

Steve

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