Recognizing Your Value as a Freelancer
One of the crossroads I found myself at while working as a freelancer is knowing what to charge individuals or companies for my services. For someone who is just starting out, it might be hard to determine what is fair and what might be a bit outrageous.
Each of us has unique skills that can be used differently for each project. It’s good to know your strengths and weaknesses so that you know how to best proceed with any project a client has approached you with.
No matter if you freelance on the side or full-time, at the end of the day you’re asking the employer to pay you what you feel your time is worth, and you have to determine what that value is. If you’re someone who enjoys working, perhaps you’re willing to go a bit lower. If you’re someone who values your time more than money, you may charge a bit more — within reason. If at any point you feel that your pay isn’t meeting your worth, change it.
But there are different projects that may call for different ways to charge a client.
So, knowing how to recognize your value as a freelancer and know what is a fair rate to charge will go a long way.
Calculating a Minimum Hourly Rate
While this might contradict what I just stated above, it’s important to be able to have options for clients and for the workload they may ask of you. You need to be able to have a low rate at times to draw in more potential clients.
It also allows those potential clients to know that you won’t go any lower, so if and ask — and they will ask — you have the grounds to say no and the proof to back it up. Not to mention it sets a precedent of integrity to your work as well.
To determine this amount, it will require some monthly expenses and some math.
Sit down with a list of those expenses, basic needs (food, health insurance, etc.) included. Go through all of them to determine the total amount of said expenses. Once you have that total figured out, divide it by 5 — the standard number of workdays in a week. Then divide, again, that number by 8 — the standard number of hours in a single workday. This should give you an idea of what you should charge, at minimum, for your services.
For example, say your expenses are $1,000 total.
Divide $1,000 by 5 to get $200.
Divide $200 by 8 to get $25.
So, if you made your lowest rate $25 per hour, you’d be able to make enough in 40 hours to cover your basic needs for that project.
This can be adjusted accordingly to meet your specific needs.
Determining a Maximum Hourly Rate
If you’re trying to figure out the maximum rate you could charge to be most comfortable in life, that requires a bit more speculation.
Say you want to only work 30 hours a week rather than the standard 40, and you only want to work 50 weeks out of the year, giving yourself a 2 week break, but you wanted to earn $50,000 per year. You’d have to charge an hourly rate of $33 to $34 to meet that desire.
To determine that rate, divide your desired annual income by the total number of weeks you’re willing to work.
Then take the weekly amount and divide it by the number of hours you’re willing to work each week. And don’t forget to factor in any overhead either, such as subscription services for work like Adobe Creative Suite or administrative duties like getting paperwork and invoices in order.
And if you’re still unsure about what to charge as an hourly rate, here’s a wonderful calculator to use that will help you better determine your needs.
As I mentioned before, freelancing is about determining the value of your time. It’s something that only you can decide how to best approach. And there is more to consider though than just time, like skill level, the project’s difficulty, whether it’s a one-and-done gig or the recurring kind; most important of all, your ethics and morals. Don’t sell yourself out (or short, for that matter) because the money may sound good. If the client doesn’t seem trustworthy, chances are they aren’t.
Use your judgement to make the best decisions and work with clients whose projects excite or inspire you. It will make you go that much further, and help you best recognize your value as a freelancer.
