How much am I worth as a freelancer?

How much am I worth as a freelancer?

It’s always inspiring to talk to people who work outside of your industry or field, especially as a freelancer. We had the pleasure of attending Freelancer Union’s June Freelancer Spark event in Brooklyn with attendees from all different industries, from writing to photography, from film production to education, and beyond.

One of the most interesting take-aways was that no matter what industry you work in or years of experience you have, the problem of “what do I charge and how do I communicate my value?” is a universal one that all freelancers struggle with. Here are the lessons and solutions we defined as a group together in battling this challenge.

1) Don’t set your bar too low

Whether you’re a novice or a seasoned freelancer, never undervalue yourself. This may seem obvious, but seriously. Jot down your skills, knowledge, experience and accomplishments, then compare it to other professionals in your space. You’re likely way more of an expert than you give yourself credit for.

freelancers

One of the freelancer attendees said that when determining your rate, the standard is to set it at 30-40 percent more than an annual salary rate someone would be paid for the same role. For example, a salaried employee making $50,000 a year, working 40 hours/week, would gross $24 / hour, minus taxes. So, as a freelancer, you should charge $31-35/hour.

Now, before you start feeling weird about this, remember freelancers pay 30 percent self-employment tax (in the US), plus the federal and maybe state (depending on your local laws) tax that salaried employees pay. The freedom and flexibility is worth it, but you need to incorporate that expense when determining your rate.

If you’re still unsure what you should set your rate at, give this handy this freelance hourly rate calculator from Motiv at try.

Great, so you now know you’re a valuable asset. How do you communicate that?

2) Talk about your value in your client’s language

If your client is revenue-driven, explain the impact your work is going to have on their bottomline. Use numbers, calculate return on investment (ROI), and lead with that when speaking with them about rates.

If they’re extremely metrics and growth driven (like all venture-backed startups are), calculate how you’ll grow their reach and convert new users, and share clear graphs to communicate that.

freelancer work call

If you’re trying to communicate the value of creative work such as content, photography or graphic design, learn to make correlations between the experience their customer will have and how much business will result from your work. Learn to systemize through conversations.

If you have the hunch that your client has the money to pay you what you’re worth, but is looking for a deal, remind them that they came to you as an expert. An effective approach is to do break down the details of the project with them. Be assertive and ask questions.

Create line items and identify how much time each will take — be very specific and add a dollar amount to each item. At the end, you’ll have their estimated budget, your fee, and you will have proven that you more than know what you’re talking about.

3) Connect with clients who value you work through referrals and vetted platforms

One very big and very prevalent issue among freelancers today is that so many customers, even corporations with large budgets want more for less — likely a result of the availability of “cheap” work online. But you shouldn’t feel defeated. At the end of the day, even if they don’t know it initially, companies want high-quality work. They want work that’s going to attract customers and drive sales.

One way to find the customers that will value you is through referrals. If you’re in negotiation with a potential client, have them talk to a current or previous client who can vouch for the impact your work had on their business.

freelancer via pond5

Entrepreneurs and CEOs listen to other entrepreneurs and CEOs. It’s science. Ok, it’s not science, but proof is proof and referrals are an effective way to capture a decision-maker’s attention and build trust.

If your potential client is still trying to undervalue you, consider being very direct with them. “Ok, you can work on a low budget, but the work is going to be subpar.” This might be scary, but as a business owner, the client will likely respect your honesty and the fact that you’re looking out for their greater good.

When looking for new work, start with friends of friends and friends of clients. Consider joining a freelancer’s network of people who are in fields that compliment the work that you do. You’ll not only be able to trade war stories, you’ll share work with each other and build a community of referrers and clients around trust.

Another option is to join a community such as CloudPeeps, where clients come to us because they trust that we’ve hand-selected the best of the best to work with them, and they know they’ll find quality talent that they value.

On the other hand, freelancers (or Peeps) know that they will be valued by CloudPeeps clients and be paid a fair rate. A slight plug for our services, sure — but this is what we’re passionate about: connecting businesses with freelancers who value each other and want to create meaningful work together.

4) Don’t negotiate your rate in the first meeting

If you’re meeting with clients in real life or over the phone, the goal of your first meeting is to better understand a client’s goals, objectives and business. Don’t negotiate right off the bat.

freelancing laptop

Rather, take the information that you’ve gathered and use that to identify their real needs and how much time and resources it’s going to take you to reach them, then determine a rate that will go into negotiation – or hopefully not.

Once it comes time for negotiation, lay all circumstances out upfront. If you’re paid hourly, determine the maximum number of hours per month your client has budgeted before you get started. This will prevent you from over-working and going without pay, as well as scope creep.

In many situations, a client will ask you to continue working and extend the budgeted number of hours per month, as long as they have the budget. It’s helpful to know what you’re walking into, especially when planning your month out.

5) Position yourself to demonstrate your value

Have you won an award? Put it on your website or profile! You can showcase your value without seeming overly self-promotional or spammy. Have confidence when speaking about results you have and will achieve.

Take these achievements, and create a consistent online presence that’s reflective of your value on your website, blog, social channels, portfolio and of course, your CloudPeeps profile.

Mail.Ru Group sells its 40% share in one of Russia’s largest freelance marketplaces

6) Know when to take “pro bono” projects

One of the attendees said something that really resonated with me, “be mercenary to people or corporations with money, be generous with artists,” paraphrased from Molly Crabapple’s 15 rules for creative success in the Internet age.

If you’re going to work for free to gain experience or to help a friend, just make sure it’s something that you’re passionate about. Something that you really believe in and want to work on. Also, if they can pay you something, but it’s 1/3 of your normal rate, consider taking a trade instead to avoid public perception that you operate on a low rate.

7) Let your personality shine and be empathetic

This tip is less about valuing yourself and more about being valuable. If people like working with you more than your competition, they’re going to pay you what you’re worth. Be enjoyable to work with. Be empathetic. Put yourself in a client’s shoes when speaking with them.

Try to plan ahead and predict any issues that may arise, then be proactive in preventing them or have a solution. This is going to make you more valuable than someone who may have the same technical skills, but not the emotional IQ that’s necessary for freelance work in today’s environment.

Read Next: The secrets to budgeting as a freelancer

Image credit: Shutterstock

This post first appeared on the CloudPeeps Blog

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