Double your hourly rate. Seriously. Okay there’s a bit more to it, but that’s the gist of it.
The art of pricing your services correctly is something that takes experience and experimentation to get right. I have 2 methods for increasing your freelance rate:
When you’re starting out, most freelancers have the common sense to work out their costs and then price themselves slightly higher than that, because, you know, business. This is a completely fine way to get started as long as you don’t plan on growing your freelance business in the future. And if you’re not growing, you’re dying.
The approach you should take to pricing is that you don’t know what it should be, and when you don’t know something, you should experiment. My advice is to start with your minimum and double it. If that’s a price that makes you uncomfortable, that’s a good sign. If not, double it again. Accept your first client project and pitch your services at that price. If it’s an easy sale, don’t congratulate yourself just yet. You just fucked up. A 100% conversion rate or lack of negotiation means you severely undervalued your services. But that’s okay, that’s why we’re experimenting, right?
For your next client project, double your prices again. Feeling embarrassed? Good. Your aiming for the client to give you some pushback to signal that you’re close to a potential sweet spot with pricing. It’s okay if they laugh at you. The price of something should make you slightly uncomfortable, but willing to pay for it anyway — that’s where the real profit lies. Aim to negotiate on every sale.
Once you’ve got some pushback, the next time you’re pitching your services you should put a bit more effort and learning into the pre-negotiation sales. Learn to express the value of your solution so well that when it comes to negotiate again, it’s easier or it’s non-existent. Then we’re back to step 1, double your prices again. You’re now in a constant cycle of improvement of either your selling ability or negotiation skills — and the only thing to come out of that will be more profit and easier sales. This will teach you to identify the motives for your client to hire you and how best to solve their problems for them. This is at the core of being a successful freelancer.
You’re aim is to get to a point where you feel like you’ve exhausted your pre-negotiation sales skills (N.B. you haven’t) and negotiation is always tough but the sale happens anyway. Sales should be difficult so don’t shy away from it, it’s part of your job as a freelancer.
It’s pretty obvious, but most freelancers don’t do it. Identify problems your client has in other areas and offer to fix them too. Get good at identifying problems before they happen, or finding new ways to grow their business for them and offer solutions.
Freelancers are notorious for just doing as they’re told and nothing more. You can actually improve the perception of yourself by being more than just a job list ticker. Integrate yourself into your client’s business and help them make more money to share with you!
You can also sell more whilst alleviating risks for your clients, such as ongoing support or some form of warranty for the work you’ve done. As long as you’re focused on providing value for your client and not just squeezing them for more money, your intentions will come across well and will help increase your project success rates and hopefully result in more repeat work.