As a digital entrepreneur, one of the things you’ll have to deal with is going to be about how to price your services as a new freelancer.
Before you go about setting the fees, certain things will have to be put into consideration.
For example, you’ll want to find out, the amount of money the service you’re rendering is worth, when compared with the amount other freelancers are charging.
You’ll also ask yourself questions like, what time and resources will I use before getting the work done completely.
You’ll want to contemplate your worth as the expert here, considering your level of exposure and experience.
And finally, your pedigree as a freelancer in search of new customers and referral will also play a significant role as you work on pricing your services the right way.
Now besides all these factors, as a new digital entrepreneur, you’re also going to have people who will want to pay you a token…
Because they feel they are doing you a favor working with you, as you’re new and inexperienced.
Considering all these, pricing your services for a win-win deal could be very dicey and difficult for you as a freelancer.
And when it’s not properly handled, you can end up making your customer very happy while you go home sad. or vice versa.
When such unbalanced satisfaction arises, there’s bound to be issues…
For example, where the customer loses, he may never come back to you, refer you, or he may even bad mouth your work to others.
On the other way round, if you keep losing out in price bargain as an entrepreneur, you may end up getting out of business as there will be no funds to run your business.
So this is the more reason why pricing your freelance services the right way is very critical to your success as a freelance entrepreneur.
Because in a situation where you can’t charge the right fees, you’re already setting up yourself for failure.
Now, here are things to consider before pricing your services as a freelance entrepreneur
What exactly is your goal. Like what do you want to achieve with your business at this point in time?
Answering this question is very important to all new entrepreneurs because it is key to charging the right fees.
Answering this question is very important to all new Freelancers because it is one key factor that will help you in setting the right pricing for your services.
For example, if your main business goal at this point is to attract clients that will help you boost your portfolio and get referrals, you will want to charge less fees so you can attract as much clients as possible.
On the other hand, if you’re a hungry entrepreneur with urgent need to make money fast, your charges will be different too.
So, in order to get things in the proper perspectives, you need to find out your goals first and then charging the right fees will be much easier.
PS: Let me quickly address something here. Most entrepreneurs will want to measure their success based on the amount of money or fame they make.
This can also affect the fees they charge. So this is not the right way to go about it. Because everything should depend on your own goal.
At the end of the day, your success should be measured on your ability to achieve your set goal, not on arbitrary things like money or fame unless that’s what you set out to achieve as your goal…
And even if your goal is the money and fame, you have to use certain key factors to measure that properly.
Your Industry Rate
What is the average industry rate for your services? Does your industry have a certain range of charges for the particular services?
Is there a specific range of fees for New Freelancers, Mid-level experts, Advanced experts etc, applicable in your industry or niche?
What are your competitors charging? When you get the right information on this, you can then work on using this to shape the pricing structure for your services.
Your Cost Price
Ask yourself, what will it cost me to deliver one complete set of this service/product, taking into consideration, the time and resources you will need.
I wouldn’t advice that you should have a cap (fixed price) on your bills. Especially as a start up entrepreneur.
Because this does not really matter for a start.
You can get to cap your bills when your brand becomes much bigger and more renown.
But for a start, you can keep your fees open and flexible to the extent that even when you have a certain minimum amount for any of your services and products, you can still reduce or increase a certain percentage based on the capacity of the client or nature of the work.
Your Client’s Budget
In the previous point, i mentioned that you need to keep your pricing structure open and flexible…
Reason for this is because, as a beginner freelancer, you will most likely come across clients with very diverse budgets. And they will definitely have to be considered.
For instance, there are going to be clients with a huge capacity to stay loyal but without much funds to pay up your exact charges.
I mean clients that can end up linking you with other clients.
There’s also going to be others who’s got the bucks. But are still open to getting even lower charges from you.
Further more, there are going to be clients who’ll look at you as incompetent if you offer them smaller bills. (Trust me I’ve met a few of these ones).
To avoid shooting yourself in the leg, you need to have a flexible pricing structure and then a the start, focus on charging your clients based on some background knowledge of who they are, their capacity to pay you and what they can afford.
This is the smart way to scale.
As a freelancer, don’t ever make the mistake of charging all your clients exactly the same fees, when you’re starting out…
Except in some cases where you’re working with a very similar and micro defined network of clients.
Instead of trying to put up all your clients in the same category, you can even ask about what each client can afford, as they approach you for your services.
I mean asking about their budget here. (Note that this is not applicable to all kind of clients).
And you can tell them upfront that you’re open for further negotiations on the prices.
To me this is the best way you both can get started on a business journey that will end up a in win win situation.
Location will always affect the ability of your potential clients to afford your business in some cases.
Take for instance, as a service provider, there will be situations where people located in the rural areas may not be able to afford some particular prices compared to people located in urban centers.
If you continue with this pricing system, they may see you as ripping them off with your services.
On the other hand, if you set your pricing too low, people in the urban centers might get to see you as being too cheap and offering inferior services.
To get around this, you have to set out the geographic location of your target audience clearly, understand the purchasing power of the people within this demographic and then set up a pricing system that will work for them.
Now, here’s where we’ll end this tutorial on how to price your services as a freelancer. I hope you’ve learned a lot?
Do you have any question or comments? Let’s hear you!