Freelance Pricing Part 1 - Set Your Rate!

Formula 5 - Estimation By Project

Most clients are going to want to hear how much the entire project is going to cost. Even if you have an hourly rate, this alone is probably not going to be acceptable to your future clients -- you'll need to justify the number of hours you plan to spend on their job. It takes practice, but you'll need to learn how to break projects into individual tasks, in order to estimate how long the project is going to take (in hourly terms), and then charge accordingly. Be sure to find out what the client expects you to take care of -- if they expect you to do everything, take this into account in your quote. Whatever the case, break the project into the following phases:

Now visualize how many hours you feel each stage of the project is going to take, and total these hours to get a final figure.

Multiply your hourly rate (figured out from one of the above formulas) by the total estimated number of hours for project. The resulting amount forms your bid for the project.

So for example, if the following is true:

• Hourly Rate = $30
• Total Estimated Project Hours = 50

Then this is how you figure out how much to bid on a project:

$30 x 50 = $1,500

Make sure that your client is very clear about the scope of the project. You should write a clear contract to make sure that the outline of the project is mutually understood, otherwise the client may take advantage of you (or feel that you are trying to take advantage of them!).

The Bottom Line

The bottom line is that you want to make a decent living. If your hourly rate seems too low then raise your rate until you feel comfortable with it. If several clients are too eager to hire you as a freelancer, you might want to rethink your hourly rate. On the other hand, if clients are very interested in you at first and then stop communicating with you after they hear what your hourly rate is, then you need to lower your rates. In other words, feel customers out to see whether your fees are appropriate or not.

If you have determined that your fees are too high, you might need to lower your overhead in order to lower your fees. Try cutting some of your unnecessary expenses in order to make ends meet. When you make enter the world of freelancing, sometimes there's a little suffering at first. Don't worry -- it doesn't usually last long if you know how to save when times are good.

Check back next week for Freelance Pricing Part 2 - Quoting to Win! where we look at applying your freelance rate in a pitch or proposal.