How do I determine my rate as a freelancer?
Did you recently start to freelance or are you thinking about becoming a freelancer? Fantastic! Undoubtedly, you’ve got a few questions on your mind, such as: how do you set your rate? On the one hand, you want to be taken seriously, so it can’t be too low. On the other hand, you don’t want to miss out on interesting opportunities by profiling yourself as (too) expensive. The most important thing remains that you need to be paid fairly for your time and expertise. We wrote this blog to give you a few pointers and, to show you if, when and how you can negotiate your rate. Let’s get into it!
What to consider when setting your rate?
First of all, there’s no way around certain costs when you are self-employed. In order to do your job, you’ll have to make some expenses. Think of telephone costs, accounting costs, transportation costs, and so on. There will also be (monthly) bills, such as taxes and social contributions to consider. In other words: make a clear overview of all your expenses.
You should also think about the profit you want or need to make. Decide for yourself on a minimum amount that you must absolutely charge to cover your costs. You can and should never set a rate below that.
Your accountant should be someone who helps you with these kinds of things. They’ll know exactly what expenses you make, and which need to be covered, so you can define how much profit you want to make as a surplus.
Once you’ve taken all of the above into consideration, you can determine your fee. It never hurts to speak with other freelancers in your sector and to ask them what they feel is a competitive salary. Obviously, you can consult addon just as well.
Is there room for negotiation? Where?
It’s good that you’ve decided on an amount but that doesn’t mean, of course, that you are automatically going to get it.
Find projects that are aligned with your interests and skills. That’s always the most important aspect. Start a conversation with the customer and negotiate your expectations, fee, and targets. Be flexible and check all possibilities. Sometimes it pays off to lower your rate in order to book a job that will shine in your portfolio.
Your experience matters. The more you’ve got, the more there’s room to negotiate a higher rate. Clients know that your previous years of experience will provide added value for them, so they won’t challenge you. Be smart about it and highlight the things that set you apart from other freelancers. This way, clients know exactly why they should pick you.
Don’t forget to check the current situation in your sector and the rates of other freelancers. It will hurt you if you set a rate that goes way below or over that of others. Check this regularly, as society and the economy fluctuate frequently.
Then there’s urgency. Are clients pressed for time? No problem for you, but that means that you can ask for more in return. Is the project a long-term one, for an indefinite period? Be reasonable: the certainty of a long assignment means you could lower your fee.
Lastly, your rate can vary according to the client. There’s a big difference between big, corporate businesses and start-ups, for example. If you’d really like to be a part of the start-up company’s story, be prepared to lower your price. They don’t have the same means as the big boys do. However, don’t be shy but communicate transparently and just ask them what they are prepared to pay you. Then negotiate. For instance: if they expect you to travel a lot, you’ll have to make expenses, so take those into account.
addon to the rescue!
Not a smooth negotiator by nature? No experience in this field and already stressed by the mere thought of having to talk about these kinds of things? No worries, addon to the rescue! You can leave all of that to us, if you’d like.
Part of our service is that you can freelance through us without having to deal with negotiations of any kind. Based on our intake interview, Youssef will know your strengths, your minimum price and your requirements. It goes without saying that this is where our personal approach is extremely visible and can be of added value to you.
Youssef will proceed to get into it with the client and reach an agreement that all parties are happy with. He knows when there’s room for negotiation, and when there isn’t. He can advise you on increasing your fee based on seniority, for example. He knows which steps to take, who to talk to, et cetera. So, if negotiating is not your cup of tea, Youssef can and will help you out.
If you’d like to hear from a freelancer who is affiliated with us, you can read their testimonial here: https://addon.career/working-with-addon-a-senior-freelancer-testifies/ .
To sum up…
… We hope we’ve provided you with some clear answers on how to set your rate and when and why to negotiate or not. Like we said, a lot of it depends on your own situation (expenses, and such) and on your sector or client (big business v. small company, the economy, …).
Most of all, we hope that those of you who don’t feel comfortable negotiating themselves, feel encouraged to reach out to us, and let addon help add the right fee to your digital ambition.
We are Youssef – founder of addon – and Hajar and Adam – recruiters. The three of us establish the smooth sailings of our organisation. As we want to keep our personal and human values high, we welcome anyone who wants to contribute to our story and mission. Don’t be shy to contact us: we’re approachable, available and we can’t wait to meet you!
