How to Price Your Freelancing Services

How do you decide what to charge as a freelancer?

This is a question I get often, and one that I’ve had myself many times. I’ve covered this in other posts, but there are many angles to it. It’s not a simple answer so we’re going to explore it further. 

In another post, I explained the role of supply and demand when it comes to pricing and how the more freelancers there are chasing the same job, the less money you can charge unless you have extensive experience to support higher pricing. 

If there is high demand for a certain job but only a few freelancers out there who provide that service, you’ll be able to charge more even when you’re just beginning. 

That’s a quick summary of how supply and demand can affect your pricing, but how do you figure out the actual dollar number that you’re charging for a service?

The quick answer is, try out some rates and see what clients are actually willing to pay. 

Ultimately you can only charge what a client is willing to pay. It’s like that with anything. You test the market and see what sticks, raise your rate until you run out of people willing to pay you that rate, and then figure out why. 

But let’s dive deeper into really figuring this out because you can’t just google “market rates for freelance writers” because you’ll get a wide range of answers. It’s not like certain employee jobs that have a lot of data on what people are earning on average. In freelancing, you could have digital marketing consultants charging anywhere from $30 an hour to $200 an hour. It just depends. 

We’re going to discuss hourly rates and flat rates and how to determine your prices for each. 

This won’t cover everything you need to know about pricing in every situation or service, because it’s a complex topic. That's why I’ve done multiple posts on it and I’ll do more in the future, but this will give you a good starting point. 

Let’s start with hourly rates. There are several things you need to do to figure this out. I’m going to use the example of a freelance video editor for a video since that’s how I started: 

Step 1: Audit your experience. Are you a beginner, intermediate, or expert? 

There are 2 types of beginners:  A beginner at their craft, (a video editor that’s still learning how to edit videos), and beginners at freelancing (but still skilled at their craft).  

When I started, I was a video editor who knew how to edit sweet videos but was brand new to the world of freelancing. I had been editing since I was 12, and I was good at it, but I was a new freelancer. 

And that matters, because it’s more difficult to charge higher rates when you’re new to business even if you’re good at your craft. 

When you’re new to business, the client knows that means you don’t understand how business works, and it will be harder for you to connect the dots about how your work helps their business grow. 

If you’re a beginner at both your craft and freelancing, then I can tell you now that you’re likely only going to be able to charge maybe $15 an hour regardless of what you’re doing. 

I recommend practicing for many hours until you’re really good at what you do before expecting to earn much money doing it. Hire coaches, take courses, learn, practice, and learn some more. See if some people are willing to pay you a small amount to start building a portfolio or do some free work for people while you’re still learning your craft. 

If you know your craft but you’re new to business, then you’ll still need to start lower but not as low. As a video editor, I started at $25/hour but within 1 year I increased it to $50/hour. 

It didn’t take too long to increase my rate but I didn’t have enough business experience to start at $50 from the get-go. 

Thankfully, in that first year I was able to get a lot of work that allowed me to build a bigger portfolio and justify raising my rates. I had some successful experiences with paying clients, and those reviews and testimonials make it much easier to charge higher rates. 

Also I got busier, so my time became more valuable as my schedule filled up. Then within a few months I was up to $75 and then I decided to transition into a different field within the video industry in order to keep increasing my rates. And we’ll get back to that later.  

Another way to figure out how to quantify your experience is how many past clients you have worked with. 

If it’s under 10 then you’re still in the beginner phase, 10-50 would be intermediate and above 50 might put you at expert level. 

It’s going to vary a bit depending on the industry of course, but that’s a good average of what I’ve seen with other freelancers and myself. To compare, I’ve worked with exactly 140 clients in the last 3 years that I’ve been freelancing full-time. I’ve been in the expert category since around 50+ clients. 

I’ve improved my craft and gotten faster and better at what I do, but mainly I’ve become much better with business. Learning how to communicate with clients and managing those relationships has become a big part of the reason why I am able to get clients at increased rates. The client doesn’t just want good work, they want a good experience working with you.

You’re always getting better and learning so “expert” doesn’t mean you have nothing left to learn, but it does mean that you know about business and your craft, and how to build good working relationships with your clients.

Step 2: Get a sense for what businesses are paying other freelancers for the same service you’re providing and at the same level of experience. 

Whether you’re beginner, intermediate or expert, you can search freelance marketplaces like Upwork to figure that out. Here’s how I would do it on Upwork:

First, search for Video Editors, then click on their profile and look at past work completed and what they were paid for it. 

Second, create a spreadsheet and write down up to 10 different rates from different freelancers that are at the same level of experience as you. 

Now you’ll have a good idea of the range of rates that freelancers like you are charging, and you can start testing from there. 

Step 3: Don’t work backwards like many blogs will tell you about figuring out your hourly rate. 

They’ll tell you to figure out what you need to earn in a year to live and how many hours you want to work and then figure out what you need to charge hourly. However, that’s not great advice in the real world. 

First, it doesn’t matter what you want to earn if clients won’t pay that rate. Certainly, if you’re freelancing full-time you do need to know what your minimum income needs to be to live, but that doesn’t mean you can just set your rate at that level if you don’t have the experience and portfolio yet to sell it. 

If there’s a gap, then you need to figure out what skills you’re lacking and work on those. Also, I don’t recommend building a freelance business off just an hourly rate since you’ll also be charging flat rates.

Step 4: Experiment. 

I wish I could tell you what to charge for your service but I’m speaking to multiple people in this video all with different backgrounds and types of services. 

If I worked with you one on one, then maybe I could help you figure it out, but all I can say is to test and see. Pick a rate and try getting a client that rate. 

If you’re unable to, then before you drop your rate, first examine your sales skills. Are you good at enrolling clients? Are you good with the sales conversation? To know more about what that is and how to know whether you’re good at sales, check out my podcast episode 17 about enrolling clients.

Then, if you're applying everything you learn there about how to sell your services and you’re still not getting clients, then maybe you’re charging too high. 

You’ll be able to tell based on how a client is responding to you on sales calls, interviews or even in messaging back and forth on whether they see you as an expert or not. 

They may put extra scrutiny into your past experience and want multiple reviews from past clients if they feel that your rate is at the level of an expert but they’re not convinced yet that you are one. 

In many cases when I’m on calls with potential clients, they come into it saying things like “we really like your experience and how much you’ve achieved” because they’ve seen case studies I’ve sent them and proof of my expertise on my Upwork profile before we even talk. I make sure they don’t have to put effort in digging for proof of my experience. 

If they seem to be searching for proof from you and asking a bunch of questions, then they don’t have enough info on you to feel confident.

Your reputation doesn’t precede you yet, so that’s a good indication that you should drop your rate a bit until you can build a portfolio that makes them feel immediately comfortable with your expertise.

Then once you’ve had a few clients at a certain rate, test raising it. The same principle applies to flat rates: you check out what similar freelancers have charged, you examine your experience, and you test test test. 

For example, I offer a Video Marketing Strategy as a kickoff project for most clients and it’s a flat rate of $2200. It used to be $500 when I first created the package. But I kept trying higher rates and clients were willing to pay it until it hit the point it’s at and I haven’t been able to take it beyond that, so I’ve peaked for this specific service. 

Now along the way, I’ve also improved the strategy to be more comprehensive and my expertise has increased since I was charging $500 so my strategies do offer more value then they did at the beginning.

They were probably only worth $500 at first. I don’t think I was undercharging. I maybe could have gotten away with $700 to start, but it doesn’t matter because it grew with my expertise. And my income from it grew because I also figured out how to create those strategies faster while still delivering the same quality. 

So that’s the other side of the coin, can you edit the same video in 30 minutes instead of an hour? Then you’ve just doubled your hourly income without raising your hourly rate. 

Always be learning how to do things more efficiently while maintaining quality and that will also make you more valuable and then you could charge higher too because you can tell a client, I’m charging $100/hour for this but I can get it done in 1 hour. The other freelancer is charging $50/hour but it’ll take him 3 hours. You actually save money going through me. I’ve had those conversations. 

So there’s some more insight into how to figure out what to charge. Again, I wish I could give you a simpler answer but it really comes down to being patient with the time it takes to figure out the best price and experiment.

Also, know that it will always change, and get comfortable with continuing to test and experiment. Just changes in the economy and inflation could affect your price, it’s an ever evolving thing and you’ll learn to be okay with that. Feel free to ask me questions and I can point you towards more resources. That’s it for today!