Most freelancers that are new to the game get confused about how to value their services. Freelance service pricing strategies are mostly based on time, which means that determining freelance rates can depends on number of hours, days, or months spent on the project. Also, setting freelance project fees – with some projects – would be best if a fixed price is agreed upon. Finally, a new emerging pricing strategy called value-based pricing is gaining more popularity recently. All of these will be discussed here.
Freelance service pricing strategies based on time consumed:
In most
project and freelancing fields, time is what being sold along with the service
itself. This is why setting freelance project fees based on time is the most
popular. However, this can vary according to the field being discussed. For
example, writers and typists prefer a per word rate rather than hourly or
weekly rate. On the other hand, software engineers and designers prefer time-based rating, mostly monthly or weekly one.
Hourly based freelance service pricing strategies
- This one is the most preferred by clients when determining freelance rates since it’s the easiest to understand and negotiate over. In addition, it’s most useful to the client in many aspects.
- For instance, setting an hourly freelance project fees gives the most freedom in projects that are not easy to define or structure.
- From the employee’s end, hourly based freelance service pricing strategies is also beneficial. First of all, the more hours you work the more money you get.
- Moreover, determining freelance rates based on hours worked gives a competitive advantage against highly priced more established peers when setting freelance project fees.
- With all these advantages, nonetheless, determining freelance rates hourly doesn’t come without troubles.
- First of all, you will need to carefully track number of hours spent on a project.
- Moreover, setting hourly freelance project fees doesn’t exactly reward fast efficient work and you will be tempted to stretch the project as much as possible. This can create some trust issues with the client especially if they have some sort of experience with the work being done.
Daily rate fees
- Determining freelance rates based on days worked doesn’t differ much from the former method.
- However, here both parties assume that 6-8 hours is allocated daily for the project. Setting freelance project fees is mostly found in larger companies and in projects that are time consuming.
- When determining daily freelance rates:
- it first let you focus more on task at hand than on rating.
- It also gives you the freedom to charge more for it’s not common to declare the exact number of hours consumed.
- What also differentiates this type of freelance service pricing strategies is that it’s more accurate than counting hours.
- Here also, however, you will encounter problems:
- some major time tracking issues. it’s easier this way though.
- Not to mention that in this way of setting freelance project fees you won’t have many days in a year to charge for.
Determining freelance rates for a week
In this type of freelance service pricing strategies, you start tracking hours each week. Most of the time, it is assumed that you will be working for 35 hour/week. Of course, when setting freelance project fees using this method, you have to clarify about number of hours out of those 35 hours you will be allocating to a specific project.
- What is distinguishable about this method of determining freelance rates is that there isn’t much time tracking involved.
- Also, it’s easy to charge more since it’s not cut clear how many hours are spent.
- When it comes to long-term projects, moreover, this method stands out the most among freelance service pricing strategies.
- In contrast, and just like it’s the most beneficial, it’s also the riskiest.
- Most importantly, clients will not charge you for an additional week if somehow the project took an extra day or two.
- Besides, some clients will see behind this way of setting freelance project fees still derive the hourly rate from the weekly rate so it’s possible they will not like it.
Monthly retainer freelance service pricing strategies
- Setting freelance project fees like this can be cumbersome.
- A whole month can pass without any call from the company, but you still need to allocate time for them.
- Also, work can bite away much of your time for the same fixed price.
- It should be mentioned however that freelance service pricing strategies from this variant can give you predictable fixed income and suitable for big project.
Other freelance service pricing strategies
Time based freelance
service pricing strategies will not be suitable for some freelancer and fields.
Therefore, other ways are used.
Setting fixed freelance project fees
- Unlike time-based pricing, here you will be encouraged to work fast and efficiently, the client will be happy with speed in this case.
- Although there are no time-based freelance service pricing strategies, your time is still used here, so you have to be careful not to underestimate the project.
Value based pricing
- When determining freelance rates this way, there are no limits to how much money you can earn, the client will not be overcharged either.
- But setting freelance project fees based on value can put many factors out of control and requires many delicate financial decisions.
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