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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:

1. Can you think of a “package” solution that you could offer?
2. Are there other freelancers you can google who offer packages similar to what you could offer?
3. Are there businesses offering packages similar to what you might offer?

 

Freelancing means learning new stuff: Up front as you begin, and continually as you build professional skills at everything from communicating by email to pricing your services. “What should I charge clients?!” is one of the biggest challenges I have seen freelancers struggle with. It causes many to feel really uncertain, distressed, anxious, and in many cases, really unsure about themselves and their abilities!

Pricing services causes this much emotional trouble? Really??

Yes, really. And it is because there is a ton of stuff going on in our minds about what different prices mean. During 15+ years of being in school and in our part-time and full-time jobs, we learned to be great employees. However most of us never learned to be great at employing ourselves. So we don’t actually have a mental model for what our work is worth and this causes us uncertainty when faced with the challenge of pricing our services as a freelancer..

Pricing challenges are in our heads

I have heard the following many times, including in my own head when I started out freelancing my training, consulting, and coaching services:

• “But I couldn’t charge clients that much money. I would feel guilty!”
• “But I don’t know how much work it will be, so I must charge per hour!”
• “But I don’t want to lose a customer by charging too much!”
• “But I am not very experienced, so I should charge a low price!”
• “But what if I can’t deliver on the promises I make for that package price?”
• “But every customer is different. I can’t charge a package price!”
• My favourite: “But I wouldn’t pay that much, so I couldn’t charge that high for a package!”

Can you think of one or two more that are not on this list? Our mind spawns “But…!!!” objections to seeing things in a new way and changing how we think because we are human beings. It is just the nature of our minds to find reasons to reject things that are too new or big, particularly when we don’t have experience at something (ie freelancing!) and a solid mental model to work within.

Let’s break these “blocks” down analytically, then look at the deeper stuff in our heads that may be driving these beliefs and blocks. This will give you the understanding you need to either blast through them or dissolve them with courage and the decision to see yourself and your freelancing work in a new way.

Analytical Tear-Down

As a freelancer you are really running your own business. You must charge prices that reflect not only the value of the work you do (Part 3 of this series will address this), but also the fact that you need to make a living doing this work.

Four things to internalize to help you overcome pricing beliefs:

1. Your package prices must include all the time you use for:

• Finding clients.
• Proposing a package to them.
• Waiting for them to decide if they want your services.
• Doing the work.
• Communicating with your client before, during, and after the project. Yes, the time, focus, and effort it takes to think about the work and communicate with clients about it.
• Invoicing your client.
• And your package price must include time for you to do your accounting, banking, learning new tools and skills, networking, etc.

You are not just charging a client for the actual hours of work you do for them, but also for all the effort and time before, during, and after the client work is done that contributes in some way to the overall value you offer.

Can you see why you can’t just charge by-the-hour for the “work” you do?

2. Employees do a narrow set of sub-divided tasks in a physical workplace that has all its costs paid for by the employer. As a freelancer you do a wide range of tasks for a project and for your freelancing business. And you must include a cost for your “overhead” – everything that goes into your business life: Your “office” space, transportation, accounting, billing, technology, internet, and more.

Again, can you again see why you can’t just charge by-the-hour? Employees have to pay nothing to do their jobs and are usually trained for a narrow set of tasks. You, on the other hand, must pay for everything and do a wide range of tasks! So you must charge more for the services you offer.

3. Your freelancing client needs a solution, as discussed in Part 1 of this series. You must deliver that solution. If you do not charge a high enough price your client will not believe that you are “professional enough” to do it. To them, their work is “high value” and is usually something they can’t do, which is why they need an external freelancer. You must charge them for this “high value”.

4. The MOST important fact to internalize: You are NOT the client. What you would pay or what it would be worth to you is irrelevant to your pricing. What your client will pay for a package of services that provides a solution to them has nothing to do with what you would pay.

This is so important that I will give you an example:

Let’s say you know how to build web sites. You could whip up a WordPress template-based web site, including putting in some stock photos, pre-written content, and doing some CSS tweaks in…oh, about 4 hours. If you were to charge a client $1,250 dollars for a “web site package”, you might say to yourself “I can’t charge that because I wouldn’t pay that huge price for the work myself! That’s over $300 per hour!!”.

Do you see the problem? Your client can’t build web sites easily and quickly. In fact, they don’t know WordPress at all! And they don’t have the time to learn how, nor do they want to learn how. The simply want a nice looking web site. To them, $1,250 is GREAT value for the relief of not being able to do it themselves, for having it done quickly by you, and for a professional looking site that you could do better than they could do it!

Give yourself the biggest pricing gift of all as a freelancer: Remove yourself from the pricing equation. The prices you charge clients have nothing to do with what you would pay. The prices you charge are only, and always, about what your client perceives as value to them.

A real example:

Summary: Use this “analytical tear-down” to push as many pricing objections out of your mind as you can! This is war – a war against your own mind, which wants to keep you focused on a preprogrammed “employee” mental model. Win this war and you are well on the way to being a successful and well-paid freelancer!

The Deeper Stuff in Your Head

This part is actually shorter but likely harder to deal with than the analytical tear-down. You see, deep in our minds are fears, traumas, and uncertainties that affect our confidence, willingness to learn and grow, and ability to make decisions and make stuff happen. Yes, we all have them, but few people talk about them. Thinking about that “buried stuff” makes us squirm. Talking about it makes us feel even worse.

So how might we resolve a conflicting message we perhaps heard all through our growing up years from a parent who said:

“The only way to success is by getting a good job! You MUST get a good job or you will be a failure”.

This is an example, only, but our subconscious is littered with learned “truths” that are both not “true” and linked tightly to our emotional states.

This is where courage comes in: Freelancing takes courage. Offering to help a client is about you stepping out strongly in the world as a independent professional. It takes courage.

Whenever one of the deeper beliefs, traumas, and uncertainties arise to your conscious mind and begin to sap your confidence, enthusiasm, and energy, are you willing to find the courage to challenge it?

For example:

“I choose to believe that I can be successful as a freelancer, for however long I choose to. Other people’s beliefs about a job being the only way to success is their truth and their reality. My truth and reality are different. I can and will be successful at freelance work.”

I make it sound easy, and for many of the things in our head it is actually very doable to “blast through” and re-write your ingrained beliefs. However, there can be stickier and more challenging beliefs, traumas, and blocks to transcend, and there are techniques for dealing with these. If you are stuck with one or more sticky challenges, hire a good coach to help you get free of it.

Every freelancer faces a number of barriers in their own mind that must be overcome in order to be successful. Are you willing to overcome what is “in there” in your own head?

A mind free of “But, but, but…!!!” is a key part of freelancing success!

Action: Do this right now

Stop what you are doing. After reading each of the following questions, focus on something in the distance with your eyes for a few minutes. What comes into your mind? Can you analytically blast through any objections or courageously declare to yourself that you won’t be held back by deeper stuff?

1. What beliefs make you feel strong and confident? (feel free to write these down if it feels good to do so)

2. What beliefs and “truths” other people told you make you feel weak and scared?

3. Can you find the courage in yourself to face the negative stuff in your mind and decide not to have your emotions, thoughts, confidence, and motivation be impacted by it?

Be strong!