One of the most difficult aspects of freelancing is trying to put a dollar amount on what you're worth.
Deciding how much you will charge for your freelancing services is probably one of the most frustrating tasks associated with freelancing of any kind. Whether you are offering your services as a staff writer, designing logos, or coding software, you need to put a price on how much your services are “worth.”
There are two main models of setting freelance rates: Hourly and per-project. What you choose depends on your own situation, as well as what your clients are used to paying.
Charging By the Hour
One of the biggest advantages to charging by the hour is that you are paid a regular “wage” for the work you do. You work a certain number of hours, you are paid a certain amount. Where things get sticky, though, is when you and the client have to agree on what constitutes a “work hour.”
Think about it: If you work a salaried or hourly job in a more traditional, on-site setting, you are paid for the amount of time you are at work. It's pretty straightforward. When you are billing hours as a freelancer, though, things are a little fuzzier. Do you count your brief lunch break? What about the small talk you engage in before you get down to brass tacks with someone? And, is there a way to honestly ensure that you aren't surfing the web when you should be working on a freelance project for a client?
If you do decide to charge by the hour, you will need to consider what seems a reasonable hourly rate. One of the downsides to charging hourly is that a client may balk at a high hourly rate. Yes, it's common for a freelance graphic designer to be paid between $75 and $150 an hour. But when you tell a client that rate, it seems awfully high. Psychologically, it is often easier for a client to pay that rate if you quote a price for a completed project.
And, you will need to keep track of the hours you work so that you can bill for your time. There are software programs that track this information and then help you invoice clients later, making the process easier.
Charging on a Per-Project Basis
Personally, I prefer to charge on a per-project basis. It's easier to set a base freelancing rate for each post, for developing web content, and for completing a project. The main downside to this method of setting freelancing rates is that you have to be able to accurately estimate how much time it will take you to do something, and then translate it into a quote for the finished project. If you're wrong, and it takes you longer than expected to complete the project, you are out of luck.
Another issue, especially if you are working with someone long term, is that of raised rates. If you decide to raise your rates, it can be difficult to explain the situation. You might need to change the way you accept freelance jobs, or quit working with clients who won't pay your higher rates.
The upside to charging on a per-project basis, though, is that you are paid for the project. You don't have to worry about what constitutes a “work hour.” Instead, you are paid for what you actually do. I like this, since it is fairly cut and dry. I don't have to worry about which client I should be billing for which hours, and it's easy to switch back and forth between projects without worrying about whether or not I'm keeping track of how many minutes or hours have been spent.
What Works Best for You?
Weigh your options, and decide which method of setting freelance rates works best for your situation. For many freelance projects (especially writing projects), it is fairly easy to have a set price for certain types of work. In some cases, though, if it's a large project that could take months, and require research, it might be a good idea to charge on an hourly basis, to make sure you are compensated for your time. You can also create a hybrid method of charging, setting a base price and then letting the client know that you will charge a specific hourly rate for research or interviewing.