To be honest, I’ve been there as well. I didn’t have an idea about what I should really consider when establishing my rates. I have sent many price estimates only to find out later that they were completely wrong.
That changed when I started to deeply analyze the work that I do. Firstly, I clarified how much money I actually need to cover my expenses and make profit at the same time. Keep in mind that the expenses include taxes, software and subscriptions, phone and internet, courses etc. Then I moved on to consider everything I will outline in this article.
Hopefully, the information will help you decide for a rate that is appropriate for your needs, reflecting your experience and acceptable for the client.
Knowing the value of your work is key
If you don’t know the value of your work, you won’t be able to tell what it’s worth. This is not something that only beginners struggle with. Even designers with several years of practice fail to recognize the value they bring to the clients. Usually because they are so overwhelmed with work that they don’t have a moment to stop and really think about it.
To figure out the value, you also need a bit of confidence. Underestimating yourself is never good, especially when it comes to larger scale clients. These usually have a bigger budget for the project and higher expectations. If you send this client a price offer that is too low, they may start thinking that your value is low as well. Because of that, they conclude a contract with a more expensive designer, even though the value they bring might be absolutely the same as yours.
As I said, going to a forum or Facebook to check the price of other designers to get inspired is no good. Imagine offering this rate and a potential client asking you about what it consists of and why they should pay this much. Now, you are at a dead end, because you can’t justify it. This makes you look unprofessional and unreliable.
With time and practice, you should get a clearer picture about the value you bring. There is no shortcut. Don’t hesitate to contact the clients you’ve done some work for asking about the benefits your outcome has brought them. Without feedback, this task is impossible to do.
Never compare to anyone
Everybody’s story and background is a bit different and pricing should reflect that. If you’re a freelancer, never compare your price with the rates of agencies and employed designers. An employee has a much lower rate. They don’t have to look for clients and don’t pay for the equipment, apps, electricity and more costs that a freelancer must consider when compiling a pricing strategy.
If you calculate the rate of someone employed in a design studio, you might think that you couldn’t get by with this amount. However, realize that the money the employee makes is net profit. They can do anything with it – and without further worries that include dealing with taxes.
Another extreme is when you compare yourself with the prices of agencies. These are going to be much higher than a regular freelancer’s. This is because of the costs they have to take care of. They have to pay their employees, offices rental and much more that sometimes vary to a great extent.
If you’re sure that you do better work than agencies, go on and set an even higher rate. However, you will have to be able to justify it. If your justification makes sense to the client and they are sure of your quality, you’ll get the job.