Ask the outside expert: How to set freelance rates
- April 19, 2009 - 10:19 PM
Q I recently began to freelance as a graphic designer but am having trouble establishing a set rate for my work. What are some ways to determine what to charge for my services? - T.T.
A Pricing is based on three factors: cost, competition and customers' willingness to pay. Your direct cost is based on how much time you spend on the project. In addition, you should cover some indirect expenses, for example supplies, pickup and delivery, meetings with the client and your office. Also, because customers make comparisons on prices, have a sense of what your competitors charge; you don't need to have exact numbers. Just aim not to be the lowest or the highest in the market, but to be seen as fair and reasonable.
The last factor, willingness to pay, is the most important and the most difficult to determine. Start with your value proposition: What do you do well? And how much is that worth to customers? Some customers value quick turnaround, special skills/technology you offer, or your willingness to work with their staff (rather than just do the work and drop it off).
This is where you match your unique offering with customers that value it. You need to talk with your customers to understand their needs (maybe better than they do) and build a relationship with them. Your product is tough to describe; you can show them past work, but they still want to know that you can deliver their project, on time. That peace of mind comes from them being confident in you, so invest in the relationship. If you do it well, your ''prices'' will be a good investment for your clients.
DIRECTOR, SCHULZE SCHOOL
UNIVERSITY OF ST. THOMAS
OPUS COLLEGE OF BUSINESS
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