If you’re easily offended click away now…
Because we’re going to talk about one of those ‘taboo’ subjects: money.
Normally we wouldn’t dream of delving into the depths of something as crass as cold hard cash. But we’re freelancers and while we may love what we do, we still have bills to pay. So, until the banks decide to take ‘exposure’ or the empty promise of ‘future work’ as currency, you’re going to have to ask your clients for money.
This snapshot gives a taste of freelance day rates based on benchmarking reports:
However, there is a lot of variation to factor in, such as experience, specialism and location, which all impact your rate. Take copywriters for example, experience ranges from less than one-year to 39-years, 51% specialise and day rates range from £278 in Yorkshire to £447 in Wales.
For a quick and dirty way to calculate whether freelancing is a viable career option for you, work out how much you want/need to earn and divide it by the number of days you have available -- for example if you need to earn £35k and can only work 3-days a week your day rate would be a minimum of £224.
It’s important that your prices reflect your position as a freelancer. As an employee you are entitled to holiday and sick pay, as well as pension contributions. To ensure you receive these same core benefits, you must account for them within your fee.
Equally, you should consider additional benefits…
For example, imagine you broke and arm and couldn’t work. As a freelancer, you need to get back to work as soon as possible – therefore it might be worth getting private medical insurance.
Also, think about additional business expenses you pay that your fees need to cover, such as:
Many freelancers choose to price their service(s) according to how much time it takes – either charging per hour or per day. But this positions your offering as a commodity rather than a professional service. Therefore, a better idea is to price the overall project taking into account the value of your skills, knowledge and experience (and everything mentioned above), and set the expectation that what you deliver will be of high-quality.
Retainers are great for helping you to predict and protect your cashflow. But it has to work for you and your client. Make sure the arrangement is crystal clear by thinking about the following:
And then check-in on an ongoing basis to ensure the client is seeing value from the retainer -- ask what is/isn’t working and what (if anything) could be improved.
Without the predictability of a monthly paycheck, freelancers can suffer from fluctuating income. If you’re not tying clients into retainer agreements, de-risk the likelihood of ‘famine’ by ensuring that no one client accounts for more than 25% of your income. With your workload evenly spread you can afford for demand with individual clients to fluctuate because overall it totals roughly the same revenue.
Also, be sure put some savings to one side. If the worst was to happen and you had a month billing nothing, you want to feel confident that you can still pay your bills. How much you put to one side is completely dependent on your financial situation and your risk appetite.
You could argue that publishing your fees makes them known to your competition so they can undercut you.
But in my experience, the freelance world isn’t like that -- it’s more ‘community’ than ‘competition’. And if you’ve taken the time to calculate your rates properly and have confidence in your pricing, you shouldn’t fear a competitive situation. Besides, the best clients value your work and don’t make decisions based on price.
To publish rates on your website acts like a first-level qualification. If a prospect is looking to spend £5 on a logo and they see your packages start from £500, clearly it’s not going to be a good fit. Equally, if a prospect is trying to decide between two freelancers charging similar amounts, you have the opportunity to show all the additional value you include -- such as the number of amends, turn around time, briefing time included -- and highlight your process so they understand your rates and visualise what it would be like to work with you.
For more information about how to price your B2B freelance marketing services, take a look at ‘The Complete Guide To Becoming A B2B Marketing Freelancer’…
And when you’re ready to say ‘hello!’ to some new clients, apply to join Marketpool as a freelancer and get your first match…