Freelancing |Freelancing Rates

One of the ongoing discussions when it comes to freelancing is the rate of pay that freelancers are capable of earning. The focus of this is often that many people feel that buyers are offering “slave wages” and that the freelancer is forced to accept these wages. Depending on your outlook, it may be appropriate to think that buyers control the market. However, the market should be controlled by the freelancer. Freelancing professionals that are willing to sell themselves short tend to work on jobs that are well below an acceptable rate.

Establishing rates

It is incumbent upon every freelancing professional to sit down and carefully review their expenses. These expenses should include their tax burden, electricity, Internet expenses, and insurance expenses. It should also include a fair amount for equipment and software. Once these expenses have been determined on an annual basis, the freelancing professional should then calculate what is required to meet these basic expenses on an hourly basis. In fairness, this should be calculated using a 40 hour work week if it is your intention to work 40 hours. These expenses are considered “fixed” expenses. They are your cost of doing business. Once you’ve reached this calculation, add on a reasonable “living wage”. Now you have a realistic rate at which you can work.

Another thing to keep in mind, is that not every geographical area requires the same level of income. It’s critical that you understand when you’re placing bids for jobs that you highlight the reasons you are worth the wage you are. If you cannot justify your own rate, do not expect buyers to pay it. If you are US freelancer, and your “ideal” rate comes in at $25, you must be prepared to produce work that is of a quality that justifies $25. You must also be prepared to defend that rate. Whether you do this by offering an “ironclad” quality guarantee, you offer some sort of a “bonus”, or you simply specify why you feel you are higher rate is justified in what he is offering a quality guarantee, explain to your prospective buyer why you’re worth that rate.

Basic economics

Another important criteria for providers who are establishing their rates is to look around at “typical” rates in your local job market. Remember, unless you are doing extremely technical work chances are there is somebody locally who can do it at a different rate than you can. Most buyers utilize outsourcing as a way of saving companies money. If you feel that a buyer is being unreasonable in negotiations, it’s not out of the realm of possibility to defend your rate based on their savings in “overhead” costs. Remember, brick-and-mortar offices not only require office space, but they require furniture, equipment, electricity, and having somebody on-site means additional paperwork burden they can chew up many hours in a month. Don’t hesitate to play this up when talking to clients.

Buyers aren’t as stupid as you think

If you can’t justify your rate based on the quality of your work, there are many buyers who will pay for it. This is been proven time and time again by successful freelancers. Most buyers are aware that if they do not have to be concerned with the quality or the integrity of a freelancing professional, in the long run they will save money. While the initial “rush to save” might produce a knee-jerk reaction of hiring somebody with a $10 rate versus a $20 rate, in the long run, the $20 rate may in fact save them money.

Freelancing professionals need to blow their own horn. For instance, if you’re a writer and your per hour rate is far in excess of that of other freelancing professionals, there are several ways you can point out to buyers what the benefits of paying a higher rate are. These benefits include perfect English, no need to edit, and a guarantee that deadlines are going to be met. If a buyer hires somebody for $10 and that $10 provider takes six hours to do a job that $20 provider can do in three, the out-of-pocket expense is the same. The upside of this is that the $20 provider in some cases is likely to stand more firmly behind their own work. This isn’t to say that the $10 provider isn’t as professional as the $20 provider. What it does mean, is those with higher rates tend to offer a more solid guarantee of quality.

Summary

It is really simple to blame others when you are not getting the rates that you feel that you rightfully deserve. However, freelancing professionals are responsible for setting their own rates. If you refuse to justify a higher rate, buyers are going to continue to take advantage and you will continue making lower than anticipated rates. Some feel that to get there first freelancing assignment they need to accept a lower rate. In some cases, this may be true. However, there are alternatives (which we will discuss in another post) to providing credentials without having to first land that “cheap paying” assignment.

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