One of the hardest thing to do when you start out in your business as a creative is determining your rates. When I started out I wasn’t sure where to position myself in the industry, I didn’t know what other people were charging and I was clue less on putting a price to my services.
So the first thing I did was do research. I needed to know if my services needed a fixed fee or I needed to have an hourly rate. Luckily a few things popped up on the internet that helped, which included a site called SA Freelancers Association. They gave me an idea of what I can charge based on my years of experience in the industry. After that I had to kind of figure it out myself based on advice from other creatives I’m close with who have been running their own business and also on how much I actually needed to make to sustain myself.
So to determine your rate you need to consider the following:
What are Your Competitors Charging?
Knowing & understanding the going rate in your industry and what your competitors are charging will make things easier. It will help you position yourself as someone who is affordable or is expensive when possible clients compare their prices. So you need to try and find out who are your competitors, then contact them as a possible client and try to find out their going rate. This way you can see if you need to go higher or lower based on how different your services are from them.
What is the market price for your industry?
The SA Freelancers Association has a number of information that shows what is the average fee of different industries in the creative business. Studying this information will help so you don’t go over board on your fees and make sure you are fair. Sometimes lowering your rates too much means you are undermining the industry just to get more clients working with you & you can’t over price as well exploiting your clients. So understanding the going rate means you are fair to your client, people in the industry & yourself.
Who is Your Clientele and How Much Can They Afford?
This is one of the most important things. You need to understand your clientele. Who is going to be interested in working with you, what can they afford. Your prices need to cater to your clientele. If you are too expensive for them it means you will not book work, because they cannot afford you. If you do get a client that can afford a little more then you can up the rate but it’s important to cater to a clients budget, especially when starting out.
Hourly vs Value-Priced
There are certain services that you need to work on an hourly rate and some need to have a fixed price. If you know exactly how much time goes into delivering certain work then you can give those a fixed price, a price based on the time & effort that will take you to deliver. An hourly rate works best when working with retainer clients and you can never really determine the man power that will go into the job. Things vary depending on the type of services that you offer so it’s best to think about it carefully to determine a fair method for you & your client.
Is Free Ever Okay?
Working for free shouldn’t be an option. You can lower your fee to accommodate a clients budget but try to stay away from working for free. What I usually do is check what is the clients budget and determine how many hours can I spend on their project. So they get what they can afford.
Showcase Your Services in Packages
One of the best advice I’ve ever gotten was to showcase my services in packages. Not only does it save time to respond to quotation requests, but it also gives your client options that they can get from you. Another great tip is to offer a little bit more with just a small fee difference in each package. This will motivate your client to always go for what seems better with not much difference.
I’ve received quite a few emails on advice on how to determine your fees when starting out so I do hope this post will shed a bit of knowledge on how to figure it out.
You won’t get everything right from the get go so don’t be hard on yourself. In business we learn as we go