If you want to get paid more for your freelance work, you have to be willing to negotiate.
If you are looking to negotiate freelance rates, there are a few things you can do. In this article, we'll take a look at a few questions you can ask yourself to gain insight on what you truly want (and deserve) in terms of freelancing rates.
How to Negotiate a Higher Fee
How do you go about negotiating for more money? There are lots of ways to do it. Here are three tips to help you out.
1) Have a price range
Don't ask for too much right away. Instead, start with an amount that is reasonable. If you feel like you deserve more, you'll likely earn it.
2) Ask for a percentage increase.
This is a common negotiation tactic. By asking for a percentage increase, you're essentially saying "I'm worth X% more than my current rate."
3) Negotiate based on value.
What's the most valuable thing you could provide to your client? Then, ask for a percentage increase based on that value. For example, if you're providing a service that costs $100 per hour, you might ask for a 10% increase.
You can also ask for a flat fee instead of a percentage increase. Flat fees are usually lower than percentages because you're paying for the same amount of time regardless of the number of hours worked. However, flat fees are often more expensive than percentages because you're committing to a fixed price without any room for negotiation.
Should Freelancers Set Their Rates Hourly Or By Project?
The answer is simple:
It all depends on your preferences and how you position the value of your services to a potential client.
I've been freelancing (on the side) since 2011 and full time since 2018 and I'm still learning. I've learned a lot about myself and my business. I've also learned a lot about how my services and worth should be positioned when negotiating.
At the start I took writing gigs that paid per article. This allowed me to control my hours and have more flexibility.
At some point, I took on hourly-paying jobs simply because they were offered to me at a rate I thought was worth considering.
But between the two, I prefer the per project setup simply because it allowed me to be a "pure freelancer", that is, someone who has complete control over his time.
How to Price Your Services as a Freelancer
The most important thing for any freelancer to do is to establish a pricing structure that works for you. This means that you need to find out how much money you want to make per hour, and then multiply that by the number of hours you plan to spend working each week.
If you do this you'll find out exactly how much you charge for your time. And then you can multiply that number by the hours you spend working each week.
This gives you an hourly rate which you can divide by 52 weeks to give you a weekly rate.
Now you can add together all the rates you've earned over the last year and divide them by 12 months to give you a yearly rate.
You can also add these two numbers together to get a total rate. This is the amount you should charge for your services.
But there's more to pricing than simply multiplying your hourly rate by the number of hours you work each week. There are other factors involved such as taxes, bonuses, commission, profit margins, discounts, etc.
These are all important factors when calculating your hourly rate. But if you want to be really accurate you should calculate your hourly rate based on the value of your time.
This means that you should multiply your hourly rate by the value of your time rather than the number of hours you actually work.
What is Minimum Acceptable Rate (MAR)?
It refers to the lowest rate you are willing to do work for.
Some use this formula:
((Personal Overheads + Business Expenses) / billable hours ) + Tax
How to Become Better at Negotiating Freelance Rates
When closing clients, you need to have good negotiation skills. If you’re not negotiating, you’re missing out on a huge opportunity.
You may be thinking “I already negotiate my rates.” But do you really? Do you ask for more money when you feel you deserve it? Or do you settle for less because you’re afraid to lose the project?
Rate negotiation isn’t about winning or losing. It’s about finding a mutually beneficial outcome. And there’s nothing wrong with asking for more money. In fact, it’s perfectly acceptable to ask for more money.
But you have to be smart about it. You have to make sure you’re asking for more money based on value, not price.
Here are three ways to become better at negotiating freelance rates:
1) Know Your Worth
It’s easy to fall into the trap of thinking that you’re worth X amount of dollars per hour. But that’s not how much you’re actually worth.
Instead, figure out what you’re worth. What would you charge if you didn’t have any competition? What would you charge if everyone was bidding against you?
2) Be Honest About Your Rate and Skills
Don’t lie about your rate. Don’t say you’re charging $50/hour when you’re really charging $30/hour.
Be honest about your skillset and experience level. Tell your prospective client exactly what you can do for them.
3) Position Your Pricing in Terms of Value
Many freelancers are trapped in the world of hourly rates. While that's perfectly fine, it creates an income ceiling. You need to step up your game and think in terms of how you can scale your skill and hours to get the most impact.
So don’t just accept whatever rate they offer you. Instead, frame it with the value you can provide for them.
For example, a sales page might take you a few hours to make (which could pay measly if your paid by the hour). However, the potential sales they can get from a winning copy from you is your main hook, and they know this as well.
So don't sell yourself too short, know the value you can provide. From there, you can start positioning your pricing strategy.
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