It’s tough being a freelancer. Not only is it getting more competitive as more professionals choose to go independent, but there’s a good chance you’re competing with people from all over the world. Globalization and online services are a match made in heaven, but you need to do your research if you’re going to work for yourself and get the compensation you deserve.
There’s a tremendously wide range of hourly rates for freelancers in every sector. For web designers and designers, the hourly rate can range from $30 to $100 an hour. The rates can be even more extreme if you compare designers in emerging markets and professionals who live in Silicon Valley.
What this means is that the average web designer will struggle to set a justified rate for their services. Being a freelancer, you have to learn to be a good decision maker, particularly if you are offered long term contracts. When switching company and negotiating rates you have to decide what is right for you, is the rate on offer fair? Is this a company in which you’re going to enjoy working with? If it’s a short term contract, do you have the correct skills to dive straight into a fast moving project and provide the value my employer is looking for? All of these decisions are faced by freelancers on a regular basis and its integral to your career and happiness to choose the right path.
JMC Academy, a highly rated creative design academy in Australia, offers some great tips to help you make the right decisions in those crucial moments. You don’t want to leave money on the table, but you also want to get the best clients and attract them with a great deal. Calculating the precise cost of every hour of work is overwhelming when you’re just getting started. So, here’s what you need to consider while setting your freelance rates:
Calculate The Hourly Rate
Calculating your hourly rate is simple if you know where to start.
- Start off with the median income for a web designer in your country. So in the United States, this would be $72,000.
- Now, you need to figure out if your skills are better or worse than average. Adjust the annual rate by that amount. So, if you’re 10% better than the average web designer, aim for $72,000 a year.
- Next calculate how many hours you will work a year. For example, assume you will work 30 hours a week and take nearly
- 200 hours off for vacations, holidays, and sick leave. That means you have 1360 hours of work every year.
- Divide the annual salary target with the number of hours. In this case it is $72,000 / 1360 = $53.
- Assume you spend one-third of your earnings on overhead (internet bills, electricity, taxes). Raise your hourly rate by 30% and round it off. This will leave you with the precise hourly rate for your services – $68.9.
Not all projects and clients are the same. While some project require you to spend time learning a new skill, some customers are more demanding than others. You should also prepare for negotiations when you start a new contract. Be willing to adjust the hourly rate within a set range (+ or – 10%) for new clients.
Consider Fixed Rates
Charging a fixed rate per page or per project could be a better way to negotiate a deal. Once you’ve built up a portfolio of great work and demonstrated an ability to work efficiently, it may not make sense to charge customers by the hour. A fixed rate for the project allows you to spend more time on certain aspects of the design and deliver better quality for your clients.
It’s a convenient solution for your client and it’s likely to boost your income as well. However, it is important to be clear upfront with your client the amount of amends that you will allow within the fixed price cost, getting this clear and out in the open upfront will avoid any later stress from client feedback.
It’s important to take the time and do your research before you set your hourly rate. Be realistic and don’t be afraid to demand a higher price if you think you can deliver better quality.