This guide is mostly for freelancers who sell services like writing, designing, consulting, etc, and not products.
1. Get the client to make an offer
Use this method especially if the request is slightly different from usual and you have no idea what’s considered “fair” charges for it.
Your conversation should typically go like this:
• Client: Hi, how much do you charge for X?
• You: Thank you for your interest! X will take me x days/weeks/months to complete and involves (brief steps). My rates are flexible and I am happy to receive an offer on your end.
• Client: Great! We typically pay [amount].
Four things can happen here:
• the client gives you a better-than-expected rate;
• the client gives you an okay rate (good);
• the client gives you a low rate;
• or the client insists on getting your rates (see other methods).
Your reply would be along these lines:
• Better-than expected rate: Great, that is more or less my usual rate (you’re bullshitting but the client doesn’t need to know).
• Okay rate: Great, I accept the offer.
• Low rate: I’m sorry, but that is below my usual rate. My usual rate is [higher-than-usual amount]. Can we meet in the middle and settle on [a lower amount that is worth your time]?
The assumption here is you’re not desperate for the work. If you are, and you will work for the lower rate just to make ends meet for now, go ahead and accept the offer.
2. Ask fellow freelancers in the same or similar fields
If the client insists on getting your rates and won’t make an offer, ask your peers for help.
If you’re in the field of writing, here are some guidelines:
• Per word, page or project.
• For editing, proofreading, translating, speech-writing etc.
• For website, brochures, newsletters, articles, reports etc.
• Across different industries and niches.
• And more.
So you can see how varied the rates can be – no wonder setting them is a hard process for new freelancers.
If you’re lucky enough to get replies from your contacts, you can use the rates as a benchmark. Eventually, you’ll want to set your own rates.
It’s a good idea to start joining groups related to your field now, even if you’re just starting out.
Share information and be helpful when you can. Start cultivating those relationships early. Freelancing tends to be a solo activity, but it doesn’t have to be.
3. Find out the market rate
The “market rate” ranges so much between platforms, specialisations and many other factors that it’s hard to pick which are the “right” ones.
This method therefore is not recommended. Maybe this method could work for other industries? It could be if the industry you’re in follows set rates.
However, freelancers attached (even loosely) to a company or agency will find it easier to find out their average market rates. For example: Coway agents, property agents, Grab drivers, etc.
4. Calculate your own rates
Some people would advise this method first, before everything else presented in this list. Sure, if it works for you. It’s just incredibly hard.
Method 4 forces you to think of how much you value your time, and heck that’s a hard process for the soul.
Tina Isaac, one of the core members of the Malaysian Writers Society, said this regarding rates-setting:
“Work backwards. How much do you want to earn from freelancing per month? How many hours can you dedicate to it? Say you want to earn RM4000, and you work 40 hours per week, that means your hourly rate is RM25 (RM4000 divide by 160 hours). If the project takes about 10 hours to complete, then charge RM25 x 10 = RM250.”
That sounds simple right? Straightforward. However, there are both advocates and haters of this particular method. It’s fair to highlight the haters’ arguments:
• You’re limiting your earning potential because you’re already capping your income.
• You’re not paid for admin work essential in running your business – getting leads, answering emails, etc.
Valid points too. Well, let’s not choose sides. If you lean towards this method, you can give yourself a high monthly income and include admin hours when billing clients.
5. Just pull a number out of your ass
Well, this method is strangely effective, if somewhat risky.
• Client: Hi, what is your rate for X?
• You: Thank you for your interest! X will take me x days/weeks/months to complete and involves (brief steps). The total cost of the project is [amount that is favourable for you].
From here on, there are three possible outcomes:
• Client agrees: Great! Now you know you can charge this rate and get away with it. Next time you can use this as the benchmark, or maybe even quote a higher amount.
• Client negotiates: Good, at least you know this type of work with this specific client cannot fetch this rate. Depending on the counter-offer process and the final rate the client is willing to pay, you may or may not proceed with the job.
• Client ghosts you: If you want the job, follow up in a couple of days. Sometimes they really did miss your email.
This method works best if you can show the client how solutions-oriented you are. Here, you’re selling efficiency and quality, not just your time.
It’s a good idea to send a combination of your work samples, testimonials and qualifications to back up your claims. “Here’s how I solved a similar problem in the past” works way better than “I can do x”.
This article first appeared in ringgitohringgit.com
Suraya is a corporate writer-for-hire and the blogger behind personal finance website Ringgit Oh Ringgit. She is more of a minimalist, less of a consumerist, a konon DIY enthusiast, a let’s-support-small-businesses-over-big-corporations kinda girl. Prior to her current role, she worked in various capacities within the non-profit industry.