I’m relatively new to freelancing and it’s growing on me. I like working with a range of different clients. I like having a variety or projects to work on. I like the flexibility having a home-based business brings. And I like the fact I can schedule an exercise class or meet a friend for coffee during business hours.
But along with tax, setting freelance rates is one of the aspects of running a writing business that I find most stressful.
It seems there is absolutely no such thing as a set fee for set work. I can’t even establish my own set freelance rates or set billing unit. Is it per hour, per day, or per project?
Let’s have a look at the variability in some of my current projects.
Agreed freelance rates and methods of payment include being paid:
- In advance for chunks of time. Let’s call the hourly freelance rate equivalent to 3 apples.
- A daily rate to sit in someone else’s office to do the work. Equivalent hourly rate of 1 apple.
- Per project based on an estimate of time taken and calculated against an hourly rate of 2 apples.
- A set hourly rate of 2 apples per hour.
Are you confused yet? I am. As far as I’m concerned I provide the same love, care, skill and experience into every piece of writing I do. But clearly equal pay for equal work does not apply.
When setting my freelance rates I take into consideration things like:
- How much I want to do the work. One project I deliberately priced myself out of the market because I really didn’t want to do it. But for complicated reasons didn’t want to say a flat no either. It worked.
- Whether it is a slow time or a frantic time. Clearly if it is slow I’m tempted to take a lower rate because something is better than nothing.
- How much work there will be. Is it one off or a series of regular articles. I’m happier to accept a lower rate for regular work.
- The relationship I have with the client. With one client who is an absolute dream to work with I found myself giving a discount off my quoted rate. This was because I was able to do the work more quickly than I’d estimated. I wouldn’t do that for every client.
- What other benefits I might gain from doing the work. Exposure to people that might bear fruit in the future. I accepted the low paying daily rate job on exactly this premise. I thought I had a lot to gain beyond monetary compensation. So as a package it was attractive.
Clients appear to determine what rate they will pay freelancers based on things like:
- What their budget is – and that is a black box for the writer.
- How much they like you – do you turn in high-quality work on time? Have you got a good relationship with the client?
- Your experience and any specialised skills or knowledge you have.
- How well you know their business.
- How desperate they are for the work to be done.
That’s at least 10 different variables that goes into negotiating freelance rates.
There’s no predictive algorithm that could estimate an agreed freelance rate in advance based on this. So here are the strategies I’ve employed to negotiate agreements that suit all parties:
- Build good relationships and have honest and open conversations. This has really helped me get over the line more than once.
- Ask colleagues and friends for their advice. Then, average what they say, divide it by my shoe size and give it a go. This hasn’t been such a bad approach and it usually ends up pretty spot on.
- Ask a mentor or coach. They have been there and done that. I find talking these issues over with my executive coach invaluable.
So I haven’t yet found one right answer to setting freelance rates. Science, art and guesswork seem to be all mixed up together. And that’s what makes freelancing such fun.
How do you set your rates? If you’ve got something more systematic I’d love to hear about it.