Ted Leondhart is a seasoned design professional with over four decades of experience on both sides of the negotiation table. Watch Ted’s course, Worth It: Negotiation for Creatives
Asking your boss for more money requires a lot of chutzpah, but what about when you’re your own boss? Determining price for freelance work can be extremely stressful.
As a freelancer or other self-employed person, you’re not only your own employer — you’re also your own employee, which means you need to set your own salary. That salary is based on how much money you’ve collected from clients for work you’ve performed, products you’ve sold, or services you offer.
Unfortunately, because clients don’t usually come with their own pricing menu, it can be hard to know exactly what’s fair to charge freelance work. And, often, that lack of clarity results in dramatic, unfair underpayment. The good news, and the bad news, is that the solution relies entirely on you.
“Creatives are basically more vulnerable than other people,” says entrepreneur and author Ted Leonhardt, “and the reason is really quite simple: It is because the work that we do is completely personal.”
Asking for more money for work you do, which you feel attached to and proud of, feels like walking a strange line between “advocating for yourself” and “being a pretentious jerk who thinks their work is made of gold.” You may not be the best judge of your work work, or maybe your client just doesn’t understand how great your work really is — but how do you know?
The short answer, which many creatives and freelancers will tell you in hushed tones: As much as you can get.
Because in the world of freelance and contract work, your income is determined by several factors, including the going market rate like yours, the cost of your supplies and equipment, the turn-around time, and possibly your local economy. But there’s also a squishier part of getting paid, which is that you will be able to command as much money as you feel comfortable asking for.
A few ways to figure out what a fair price for freelance work in your industry looks like include:
1. Ask Around.
If you’ve got fellow freelance friends, ask them what they’re charging. It’s an easy way to gauge what’s other people are bringing in, and how you stack up. You can also sometimes find lists online, which explain how much other people get paid.
2. Check the Stats.
Apps like YourRate use an algorithm to make determining price for freelance work a little easier, which can lend you a great deal of confidence when commanding your pricing.
3. Determine ROI for Each Client.
You know how much it costs you to do your business, and you know how much time and effort it takes you to do your work, but do you know how much money your work makes for your client? That third variable can serve as a big bargaining chip, if you come prepared with it. Consider how much the work or service you’re providing is going to benefit your client, and how much it might improve/increase/ease their business — and build that into the potential price.
4. Feel Out the Market.
Career coach Beate Chelette has a sneaky/genius way for figuring out how much your competition is charging — just pick up the phone and ask. “I have no problem calling competitors,” she explains, “They don’t know if you’re a competitor or not.” If there’s a similar company in your area, call and politely ask for a quote of their services. If they’re charging quite a bit more or less than you are, give a peek to their social media profiles or Yelp page, if they have one. They might be undercutting the market, offering a more premium service, or just be closer to a fair price than you are.
Often, freelancers will take what they can get — which, for those who don’t have long resumes or a lot of work to show, is actually fine. There is definitely a case to be made for giving away some work in exchange for free publicity for your personal brand. But if you feel like you’ve been at it a long time and you’re still scraping by, you may need to do something that can be extremely challenging or uncomfortable to creatives: Renegotiate your rate, or look elsewhere and start demanding more.
To find out how to ask for more — a crucial tool for creatives — Watch Ted’s course, Worth It: Negotiation for Creatives.
If you’re ready to start a freelance business, or get serious about growing your existing client base, download our free eBook, The Freelancer’s Roadmap.