Do you know your worth?
As an independent consultant or freelancer, you have the flexibility to choose your assignments, what you specialise in, and most important – you have the power to decide how much you charge.
This freedom can be a bit of a double edged sword, because not knowing how to price your services can make or break your business. Here’s how to work out how much you are really worth and therefore how you can arrive at a good hourly rate or project pricing.
To get started, it helps to have answers to some questions before you begin your assessment. Keep in mind that the hourly rate numbers need to add up to whatever you’d like to earn each month, at the end of it all.
Have you invested in you?
As a professional, you have likely attended some courses or gone to full time school or university to gain the right credentials. You will need to weigh in on this, the pedigree of your alma mater and more, when you assess your worth to a client.
Someone from a tier 1 institution or an Ivy League college is likely to be able to demand more than someone who attended a lower ranked institute. However, worth isn’t just about ranking, it is also about word on the street. If your college or school has a good reputation among clients in your sector, you should be worth more.
Do you have affiliations or memberships?
Being a member of an industry body, or keeping up with certifications doesn’t come cheap. Such affiliations and qualifications also indicate a certain level of quality and output. And you should definitely be able to charge for this.
As someone who relies on their income from projects to run their life, you also need to consider the revenue versus expenses aspect of things and be sure you cover the costs of these memberships across projects over the year.
What about experience?
Clients appreciate experience. If you bring sectoral expertise or years of experience working in the field, you are likely to inspire more confidence from prospective clients. They will value you over a rank beginner. If you are able to showcase your work and experience well, you should be able to charge more.
Again, you will need to check how rates vary based on experience, by asking around (speak to peers, old clients and people in the field).
What options does the client have?
When it comes to zeroing in on the right price and your worth to a particular client or business, the numbers may deviate a bit from your norm. Look at it this way, if a client needed to get a particular kind of job done they could pick from an agency, in-house talent, a freelancer or a consultant like you.
Perhaps their requirement will take a little extra effort compared to your regular assignments. Factor this into your pricing.
What do your competitors charge?
When you size up the competition, don’t limit yourself to just independent consultants like yourself. Check all alternatives in the market, go on forums and online marketplaces to get a feel for the kind of rates people are charging and the amounts clients are offering on open projects.
Armed with this information you will have a baseline to work with and will know you are worth at least this much if not more. Sometimes however, in the interest of staying competitive you will need to also understand what others with similar experience and expertise charge and be sure you don’t price too prohibitively high.
At the end of the day, knowing what the competition charges cannot be what decides your worth. It is just information to keep in mind while setting your pricing. Your own worth is a function of your qualifications, experience, expertise and track record.
Does your hourly rate need assessing?
Do you know what your competitors charge?
Until Next Time, Belinda
I am Belinda Bow
I love all things marketing and I thrive on seeing a business become re-energised and flourish. I am excited about life and I adore my family.
Within these articles, you’ll find some helpful tips and some real guidance to help you make the most of your business, and gain a good understanding of all things marketing.