Freelancers: are you charging what you’re actually worth?
So, you’re a freelancer. You’re doing a job you enjoy, maybe even love and – for that reason alone – some people seem to think that wanting to get paid for the work you do makes you just plain greedy. How dare you have a good income and a job you enjoy! Who said you could have it all? Graphic designers. Web designers. Content Marketers. Creatives in general. Whatever your freelance craft, you’ll know what we mean.
This mindset seems to underpin the whole “if you work for free we can give you exposure” offer that every creative person gets from time to time. The problem is, it’s also common for creative people to secretly feel that everyone else is right… That maybe you really don’t deserve to get paid for what they do.
It’s certainly a moment – when you issue your first invoice, charging a client hundreds or thousands of pounds for something which came out of your head. For some creative people, that process never gets any easier – they’re always second-guessing themselves, always questioning the value of their own work.
Here are some ways for freelancers to approach the whole business of pricing, so you can feel confident enough to charge what you’re worth.
ASK THE FREELANCE COMMUNITY FOR ADVICE
There is a lot of help and advice around. Many people who do what you do will have written blogs about how they price their work. Go check them out. There are forums like freelanceuk, that are full of people who do what you do – skilled creatives offering each other advice based on their own experience. So, join the community.
Canvas a range of people, like this, and see what the commonalities are in their approach. Maybe it’s normal practice, in your business, to charge by the day or by the hour, even. Maybe it’s more usual to charge per job. You won’t know this until you’ve asked around.
Creative people and successful freelancers are, very often, happy to offer a leg-up to those coming along behind them. Just remember that when you’re established, so you can offer other newcomers the same help.
FREELANCER DAY RATES
If you’re just starting out as a freelancer and don’t yet have that portfolio of great jobs to show people, then you may wish to be modest in your pricing. But, you still have bills to pay and a cat to feed; so don’t under-sell yourself.
Outsourcing to external suppliers can be cheaper than having an in-house team – since it saves all the additional on-costs of employing staff; no holiday pay, no sick pay, no pension, no tax. No, you have to shoulder those costs yourself.
If you’ve done your job for an agency or an employer – whether you’re a copywriter, a designer, a photographer or any kind of creative – then you will have been paid a wage. A useful rule of thumb is to calculate a day rate that is double what your daily wage was.
So, if your take-home pay (after tax and NI) was £100 a day, your freelance day rate could be £200. This means that you can cover your own on-costs and still have a decent profit left.
Another method is to simply work out what you need to earn in a year to be comfortable (not surviving, not bumping along on the breadline, but comfortable). Let’s say you need a top-line of £50,000 (for a round figure).
Now, here’s the science bit: If you work five days a week for 50 weeks (you deserve a couple of weeks’ holiday) that comes to 250 days a year. So, divide £50,000 by 250 days and you’ll find you need to earn £200 a day.
But, you can’t guarantee that you’ll be working every day – so look upon this as your minimum, the floor beneath which you can’t afford to go.
TEST THE MARKETPLACE
The reality is that you’re worth what a client is willing to pay you – there are no hard and fast rules to this. So, it’s worth testing the water.
Many clients enjoy a good haggle so pitch high! You already know the figure you won’t go below so, anything above that, is a bonus.
You need £200 a day, so you pitch £300. They haggle you down to £250. They feel good because they’ve saved themselves £50 an hour and you feel good because you’re making £50 an hour more than your minimum.
And – here’s a thing – now they’ve settled at a price that’s higher than your minimum – that figure becomes your new minimum. If a client has paid you that much, that’s what you’re worth!
If you’re lucky to be getting regular work from a single client, you need to increase your prices annually. Firstly, the cost of living goes up year-on-year but, more particularly, you now have a year of extra experience which means you are worth more than you were 12 months ago.
A 10% increase is a reasonable sum for this.
IT’S OKAY TO SAY ‘NO’
When you’re a freelancer, ‘no’ seems to be the hardest word. Maybe there’s that fear of the starving artist gnawing away at the back of our minds. Whatever it is, a freelancer’s instinct is to say ‘yes’ to everything – however ridiculously close the deadline, however tight the margins on the fee. Any work’s better than no work, right?
Imagine this: you’re doing a job you’re not interested in, for very little money, just because it was all that was on offer. Then, an email drops into your box from a client you’ve been chasing for months, offering you a brilliantly interesting job, at a great rate but – disaster – you can’t take it because you’re committed to this other job.
It could happen.
So, if you really want to do a job, the money is of secondary importance; but, if it’s a tricky or boring job and it doesn’t pay much – do yourself a favour: just say ‘no’. You never know, they might come back with a better offer!
OVER TO YOU
Do you charge what you’re worth? How did you arrive at the figure? Maybe you could offer some advice to those creatives still struggling to believe that someone, out there, might actually want to pay them for the things they’ve made up in their head and with their hands.