Deciding how much you should charge for the work you do is one of the hardest parts about going freelance. There are three approaches you can take.
Charge the same as the competition
Do some market research, see how much everyone else is charging and set your price around the same mark. The temptation is to price yourself slightly lower than the competition, especially when you are first starting out, to build up your client base.
There are a number problems with this strategy:
- The sum may be too low for you to live on, which means that to be able to feed yourself and pay the bills you will have to put in extra hours. When you’re first starting out putting in extra hours seems ok, but as the months extend into years this is a strategy for burnout and frustration.
- The people who opt for the cheapest price are people who always opt for the cheapest, quality be damned, so if you put up your prices later they will simply switch to someone charging less than you. So you’re either stuck with your initial low price, or you have to build an entirely new client base.
- You are susceptible to anyone undercutting you. You set a slightly lower price, then someone else who is starting up sets an even lower price, so you cut your rates again to keep your clients, and so it continues and you’ve got yourself a race to the bottom.