Here are a couple of toughies for you to chew on: Are you charging enough? And how much should you charge for your services?
When you become a freelancer, it can be extremely difficult to tell how much to charge your clients.
The cold truth is that if you are anything like the majority of other solopreneurs and online business owners out there, you probably aren’t charging nearly enough for your freelancing services!
As a full time employee, your salary is going to take into consideration business costs like health care, licensing, taxes and other business essentials, but when you work for yourself, you have to cover all of that – and more!
But if you are anything like what I used to be, you might feel a little uneasy with the idea of charging more for your freelance services. Perhaps you might feel a little afraid that if you raise your freelance rates nobody is going to hire you anymore because they don’t think that you are worth it. Or maybe you are skeptical about increasing your freelance rates because you don’t want to lose your existing clientele.
Do you know what I say to that?
That’s not true! And let me prove it to you with a story.
The story is of two freelance writers. Both freelance writers made approximately $3,000 a month as a side hustle. Both freelancers had the same skill set and capabilities. And both freelance writers had a similar work history and quality of work produced. However, there was one massive difference between these two writers.
The first writer had a full time day job and every night, she still ended up committing 30+ hours to her freelance writing business each week. The second writer also has a full time day job and committed approximately 10-15 hours a week into her freelance writing business. Both of these writers were extremely similar and they earned the exact same amount, but one of them worked A WHOLE LOT MORE than the other.
How did this happen?
The difference was in their freelance writing rates.
How do I know this?
I know this because both of these writers are me.
The first freelance writer was me at the start of my freelance writing career five years ago where I was so utterly adorable and completely naïve about the way I handled my freelance writing rates.
I had dental school from 8-5, studied after dinner until 9/10 and hustled my butt off with my freelance writing business for hours. I was sleep deprived, tired and I wanted to give up. so. many. times.
The freelance writing rates that I used worked for me while I was on summer vacation (because I had nothing else going on), but with a full time life going on once uni started, even though freelance writing was just a side hustle, it really began to feel like I was having two full time jobs. My freelance writing rates were no longer appropriate.
Fortunately, adorable little Michelle smartened the hell up and implemented appropriate service pricing strategies to increase her freelance writing rates and her university days changed as a result. She was still that suave, awesome and super cool girl (JK she was a nerd and proud!), with the same set of skills and quality of work, and yet, with an increase in her freelance writing rates she managed to earn the exact same amount but cut the number of hours she worked by more than 50%.
What does This Mean For You?
While my example was of my freelance writing business, the fact of the matter is, it applies to freelance photography rates, graphic design freelance rates, freelance web design rates and every other service based freelancing niche there is.
Knowing how much to charge is universal for all freelancers and today, my goal with this post is to show you the ropes on how to earn more for less because come on! That’s the way to do freelancing right 😉
So, if you aren’t charging fairly for your value, read on to discover my secret two-step pricing formula for services to guide you on increasing your freelance rates and charge for exactly what you are worth.
Two Step Pricing Formula for Services
How Much Business Revenue Do You Really Need?
The first step in my pricing formula for services is to determine exactly how much money you need to earn per annum.
For the most part, the majority of solopreneurs begin their own freelancing business so that they can have total control over their own income and lifestyle goals. But the truth of the matter is that this lovely dream soon disappears into oblivion if clean cut, clear business revenue goals aren’t set in stone.
The first step in answering the question, ‘how much should you charge’ for your freelancing services is to be completely certain about how much gross business revenue you actually need.
While I do believe that every freelancer should aim high, instead of simply plucking numbers from the sky, you have to make sure that your goals and aspirations are directly related to the kind of lifestyle you want to have. For example, maybe you only need $100,000 in gross revenue to carry out the lifestyle you want to have with ease. If this is the case, why should you aim for a multi-million dollar business if that isn’t what you really need or want?
So how do you determine what your business revenue goal should be?
Well, first off, decide exactly how much net income you are going to need in order to support the lifestyle want to have and then add on your business/personal expenses and taxes. The sum that you come to should be your business revenue per annum.
Once you have a clear idea of what your business revenue needs to be, you can begin reviewing exactly how much you are charging currently and decide whether or not it is appropriate to increase your freelance rates to reach this goal.
Do the Math
When you have determined exactly how much business revenue you need, the next step to deciding how much to charge for your freelancing services is to figure out exactly how many clients you will be able to handle at any given time.
For example, if you are the only one in your freelancing business, then you have to know and accept the limitations of your manpower!
So how much should you charge for your freelance services?
Well, if you can only handle 20 clients each year, don’t let the numbers destroy your passion for your job and make sure that you only provide top notch services while maintaining your lifestyle goals. So, if you wanted to earn $100,000 a year as a freelance web developer, then every client of yours should on average spend $5000 on your services.
After doing the calculations, if you just don’t feel extremely comfortable charging the amount that you need to support your lifestyle, you just have to ask yourself: “How can I add more value to my services so that I can become comfortable charging for more?”
Personally, I asked myself this question – and the answer came to offering to show those who hired me my best content marketing strategies so that they could maximize the value of my writing in every possible way.
Now that you have used my two step pricing formula for services rates and know how much to charge, all you need is a smashin’ marketing plan to REACH THAT TARGET!
We’re nearly at the end, so don’t forget to grab your FREE freelance pitch tips + bonus templates by clicking the image above. Use the exact formulas that I have used to win high paying clients as a freelance writer (even as a complete newbie!)
To learn more about how I earned $5,000 my first month as a freelance writer, go here.
Practice Again and Again
When you have your freelance rates set and you know how much to charge your clients, practice by saying it out loud.
I know, I know. Super cheesy, but totally necessary.
Visualize yourself on the phone, or in a meeting with a potential client. State the exact amount that you have decided for your products or services, or if you really want to be ballsy, state a price that is 3x higher than your actual amount so that you can gradually get comfortable when it comes to quoting high numbers.
Keep practicing until the point you don’t feel that awkward little butterfly dance in your chest because you need to get to the point where you begin to feel like your quote isn’t actually even that big of a deal – it is just about your mentality and bringing yourself to become the super savvy and suave online entrepreneur that you are!
Business can be a cold place and you need to learn how to stand your ground because you are worth your rates. Just remember that your freelance service rates are just a number and if you are confident in the service and value you are bringing to your clients, then there is no need to be afraid of it!
There is absolutely no need for you to doubt yourself and your abilities. Simply have faith in yourself and in what you do. The moment that you do, your customers will begin believing in your too!
You are worth it.
Don’t hesitate and begin charging for that worth!
How much should you charge for your services?
Exactly how much you are worth.
Hopefully my pricing formula for your services helped you decide how much to charge for your freelancing services. Drop a comment in below and let me know how you chose your freelance rates. I’m super interested!