Freelance pricing

Freelance pricing lessons from my experience:

1. No Free work

Most of the freelance work involves direct one to one manual work. If you have a digital product like a software you can afford to provide an extra copy for free but not for manual work.

2. No sample work

Your portfolio should speak for you and the client should be able to decide based on it. Most of the guys asking for sample work are either window shopping or don’t trust your abilities. If you think the client has good reason to test you before offering a big / serious project, provide a quote for the hours spent in sample work. Any genuine client will be glad to accept that.

3. No local price

Time is money and like gold its value should be same universally. You can’t compete globally with local price.

4. No Outsourcing price

Just because you work from a developing country, you should not offer a cheaper price. Unless you scale up and train a lot of people, you can’t continue to compete and sustain based on price alone. And don’t do this unless your only selling point is the price.

5. No charity

The client may have a charity site. Or, a site that doesn’t make income. But you are running a business and should make money. If the client’s cause is something that you appreciate you can just donate money. It is cheaper than donating your freelance time.

6. Dare to raise the price

The biggest mistake any freelancer can make is to work for a reduced price.

Keep raising the price until no one buys from you. Then keep raising your value so people will start buying from you.

There is some value attached to the price offered. So, even if you offer reduced price, clients may think you are charging less because you are not worthy of higher price. So, don’t be afraid to raise your price. If you are not worth the price you quote better try to become worthy than continuing to offer a less worthy service for a lesser price.

7. No partnership or income split

Some clients will prefer to develop a website or software and will offer you part of the income or some kind of partnership agreement instead of paying you real money. Never accept this. A product’s success depends on various factors and can’t be controlled unless you have complete or clearly defined control. You can’t be responsible for a product’s failure and lose your work. If you are sure of the product’s success better get paid for the development time you spend and then negotiate a new partnership agreement as you would do with real business.

8. Value Vs Need

You may work from a home office in third world country. You may have zero overheads. But its is not a good reason to reduce your price. Have an idea of the market rate and charge based on the value of the service and not based on your needs.

9. Charge for the non-working days

Besides paying monthly bills for your family and office, you may want to take a vacation. You may want to attend a business conference. You may want to take a break from work and invest the time on learning or developing a new business. You may have an medical emergency. There will be for sure a lot of days that you cannot or choose not to work for a client. If you are working a day job in a regular company most of these expenses will be taken care of. So, budget an amount for not just the days you work but also days you may not work.

10. Calculate your hourly rate

Let us assume:

You work 8 hours a day. If you spend all those 8 hours in repetitive work, you will end up like a factory worker. So, say you spend half your time in learning, trying new things, developing business, networking etc., You have 4 hours for client work and at least 2 hours can be billable. So, 2 hours a day, 5 days a week, 4 weeks a month is 40 billable hours month.

Therefore, your hourly rate = (Work related expenses, investments + Tax + desired income from a month + allowances for the days you won’t work ) divided by 40 billable hours.

Once you have an idea of hourly rate like this you will never charge less.