Being familiar with jobs that pay an hourly wage, most university graduates thinking about doing freelancing “gigs” after graduation (short term contract assignments) first think about how much they should charge per hour for their work. For example:
- Ghost write blog articles – “I will charge $15 per hour.”
- Do social media postings for small businesses – “$18 per hour.”
- Landscaping and lawn care – “$14 per hour.”
- Photography for a friend’s engagement party – “$20 per hour.”
Offering hourly pricing is the biggest mistake I see most new freelancers make
Charging by-the-hour for your work, or accepting a by-the-hour contract that a client offers you, is seriously problematic. Here’s why:
1. You have no idea if the per-hour rate is an accurate match to the value you will provide. So what do you do? You default to what you would have been paid as a wage earner. Worse, you price based on what you think you are worth per hour.
What happens? You grossly undervalue your worth and the value you will offer. You under-price…often by 2x, 3x, 5x, or 10x too little. “I earned $14 working at a restaurant, including tips. I will charge $16 an hour to my clients because now I have a degree. Phewwww!! That was easy!”
2. You are thinking like an employee. A freelancer is not an employee. A client wants help with something, a problem solved, or something built for them. They do not want an employee. That is why they are hiring a freelancer!
What happens? If you price on a hourly rate, your client will be confused and uncertain because they don’t know how many hours the help, solution, or building of something will take. They aren’t thinking about hours and hourly rates. They are thinking about getting something done. Your job is to help them get this done, not confuse them! See the problem? A confused and uncertain client is not a happy client who trusts you and your work.
3. You think you don’t have enough experience. As per point 2., most clients really only want to know if you can get something done for them and how much it will cost to do so. That’s it. “YES / NO” and “$_____” – one single number. Your lack of perceived experience lowers your confidence and results into defaulting back into “employee” thinking.
What happens? “I will price at $12 per hour to compensate for my feelings of lack of confidence. That way, my client will not expect much from me and if I fail, it won’t cost them much.”
Result? A good client will automatically think: “$12 per hour !?!?! Ummm…no thanks. This person is like a fast-food worker. I will find someone else to solve my problem – someone who can clearly get it done!”
And the result for you? “Clients won’t even pay me $12 per hour!! Nobody wants me. I must be really worth very little to clients and employers. Back I go to the minimum wage job I did last summer!”. Pricing on an hourly basis can quickly degrade confidence in both yourself and in the freelancing path itself!
Successful Freelancing: Offer “solution packages” to clients
Instead of thinking about “hours” and “price per hour”, think “solutions” to clients in the form of “packages” that:
- help them do something better, faster, or in a new way.
- solve a problem for them.
- build something for them.
A re-framing of the examples at the beginning, from a “package” approach:
- Ghost write 12 blog articles that will engage your social media audience – $1,100
- Build your business’ social media “followers” by 100% of current levels. – $2,500
- Keep your lawn cut & edged and flower gardens weeded until September 30th – $1,400
- Photography for your engagement party – $400
Can you immediately see that two things have changed?
1. You have offered clear solutions to clients needs. The wording is definitive of a resolution of something. The client will feel relief just when reading the proposal. “This person will be able to solve this for me. Good!”. They may not yet approve your package price, but better they are a relieved potential client than a confused and uncertain one, no?
2. Your prices are now closer to, and more indicative of, the “value” your client will experience as an outcome of your work on their behalf. They are happy because the price clearly indicates that you will take this work seriously and you can do a good job with it.
Can you see how much more money you will make by offering packages instead of charging per hour for your work?
In the first example – ghost writing – you might have taken 24 hours to write 12 blog posts. By charging $15 per hour you are “earning” $360. By offering a package of 12 articles for a fixed price of $1,100, you are now “earning” nearly $46 per hour for the same 24 hours of work. A 300% increase in your earnings! And if it takes a bit more than 2 hours to do each blog article because you don’t have much experience? Who cares! You can take longer because you are getting paid so much more on an hourly basis. By focusing on the solution and not the “hours” and “price per hour”, you will not only free yourself from pricing stress but also do a better job for your client, resulting in an increase in experience, confidence, and income for yourself!
Action: Do this right now
For whatever service/solution you are thinking of offering:
- Can you think of a “package” solution that you could offer?
- Are there other freelancers you can google who offer packages similar to what you could offer?
- Are there businesses offering packages similar to what you might offer?