2148: How to Set Your Freelance Rate by Daniella of I Like to Dabble on Side Hustles

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[00:00:30] This episode is brought to you by Accenture. When your advertising operations fall out of sync, everything else follows. Spotify and Accenture are working together to reinvent the rhythm of ad sales. Using automation, analytics and smarter workflows to simplify campaign delivery and access better data across the business. The result? Less time spent on operations, more time connecting brands with the moments and fandoms that matter most. Learn more at Accenture.com slash Spotify.

[00:01:00] This is Optimal Work Daily. How to set your freelance rate by Daniela of iliketodabble.com When you're starting out freelancing, it can be really tricky to figure out how much to charge, especially if you don't have much experience. Thankfully, there's a few tried and true methods for how to set your rates as a freelancer that you can use as a starting point. These tips will work whether you're moving to freelancing full-time or just starting a remote side hustle. Check the going rate for freelance services.

[00:01:30] This is the most popular method to set your rates as a freelancer. Do some research and find out what the going rate is for your services. If you're not sure where to start, search on social media for folks advertising similar services. Facebook groups are especially handy for this. Look for buy and sell groups or ones where your ideal customers might discuss service options. Be sure to surf these places too for researching freelancer pay data. 1. Freelancing Females Rate Database

[00:01:58] 2. Get access to crowdsourced freelancing pricing data on Weethos 3. You can also use Upwork for average pricing data as well as look at what other freelancers are charging by surfing on the platform. And 4. The freelancers union also has some great community resources. Setting Competitive Rates as a Local Freelancer If you're catering to local businesses, make sure you do a SWOT analysis of your competitors

[00:02:26] to identify whether your services are in line with them or if you need a different fee structure. Finding the going rate for some specialties can be a challenge. Many industries, especially web design, don't list their rates openly. That can make it difficult to see what others are doing. If you feel comfortable, identify a few similar businesses and call them for a quote. You can also ask around to see if anyone in your network has worked with your competitors in the past. Determine Rates via an Hourly Wage Method

[00:02:54] This works for any rate model you choose. If you're just starting out, completely unsure about what the going rate is for your services, or want to pick up some side work, having a goal hourly wage in mind is incredibly helpful for setting and accepting rates. Your hourly wage isn't just the amount you make per hour working for clients, though. Freelancers have additional expenses, like freelance tools and services, and admin time to account for, too. Consider your abilities and goals with freelancing, then come up with an hourly wage that you feel comfortable with.

[00:03:24] This doesn't mean you can't strive to earn more. It's just a starting point. How to set your rates using an hourly wage Next, determine how many hours of billable and unpaid time you do on average. If you haven't been tracking your hours, it's time to start. In the meantime, you can estimate that 60-80% of hours worked are billable. Take your goal wage and multiply it by the amount of hours you work each month. Then add all your expenses, like tools and bank fees, to the total.

[00:03:53] Finally, divide that number by the amount of billable hours you usually work. This is how much you need to charge per hour of work to make your goal wage. Use that number as a base to set your freelance rates. Freelance hourly rate calculators Freelance hourly rate calculators can help you easily determine your rates for your services, and there happens to be a ton of them available for free use online. In this post, you can find links to the Freelance Rate Calculator Google Sheet, the Freelance Hourly Rate Calculator,

[00:04:22] and the Freelance Hourly Rate and Fixed Price Project Budget Calculator. Why you need an hourly wage in mind There are plenty of opportunities out there for freelancers to take on additional work from clients with fixed budgets or consulting for agencies. If you have a minimum wage in mind, you can quickly decide if consulting work is worth your time. Another reason to know your wage is to help you increase your rates in the future. If your expenses go up or you feel you're not earning enough,

[00:04:50] repeat the formula with your new numbers and increase your rates accordingly. Other Factors to Determine How to Set Your Rates as a Freelancer Knowing how much other folks charge and what your base rate should be is a good place to start, but there are other factors that determine how to set your rates as a freelancer. 1. Your Experience How does your experience stack up against the competition? If you're completely new, you might want to consider offering introductory rates to help establish your reputation.

[00:05:19] On the other hand, if you're an industry veteran moving into freelancing or consulting, you may be able to charge above average and cater to clients looking for experienced professionals. 2. How Quickly You Work If you charge for your skills by the hour but work twice as quickly as your competitors, you're effectively giving twice as much value for the same price. While this might be a great way to wow your clients, it's also a serious indication that you should charge a higher hourly rate. This is why I'm a big advocate of flat rates.

[00:05:48] You're not limited to how much you can earn per hour, and if you happen to be slower, you won't hurt your reputation either. 3. Availability Are you constantly booked up, or do clients run when you send your rates? These can be indications that your pricing is too low or high. Keep in mind that low rates can help your business at the start, but eventually it makes sense to work fewer hours for higher paying clients and earn the same amount. Then you can spend the rest of your time finding new customers who will pay your increased rates.

[00:06:18] 4. Discounts for Reliable Work The most stressful part of freelancing, in my opinion, is not always knowing where your next meal will come from. Having a couple steady clients can create a huge sense of security and reduce your unpaid time spent looking for work. If it makes sense, consider offering discounted monthly or bulk rates for clients who commission your services consistently. 5. Final Tips for Setting Your Rates as a Freelancer

[00:06:44] As someone who's been freelancing for over 10 years, I have a lot of experience trying to set my rates effectively. It's not always easy, especially when you're starting out and still building confidence in your work. Here's some final tips to make it easier. 1. Don't focus too much on what other people are doing. Set your rates based on what you feel is appropriate. 2. Let your work from your portfolio speak for itself. 3. There will always be clients that balk at the price, even if your rates are reasonable.

[00:07:13] 4. Reputation Matters as a Freelancer And clients will pay more and offer consistent work more often when you're reliable. 5. Consider Factoring in some vacation time into your rates so you can comfortably take time off. Hopefully this guide helped you set your rates as a freelancer. And just remember, you can always adjust your rates later if your initial structure isn't working. So don't stress out too much with your initial pricing. Sometimes you have to learn as you go.

[00:07:44] You just listened to the post titled, How to Set Your Freelance Rate, by Daniela of iliketodabble.com. Evening. Buyer's remorse. Buy a new car? I'll be moving in. Let's get started. Uh, sorry. I think there's been a mistake. I bought it from Carvana. You what? Yeah, great price. I even have seven days to love it or return it. So there's no... No. No buyer's remorse. More like buyer's rejoice.

[00:08:12] I guess I'll let myself out. Congratulations. I mean it. Buyers rejoice. Buy your car today on Carvana. Limitations and exclusions may apply. See our seven-day return policy at Carvana.com. This episode is brought to you by Accenture. When your advertising operations fall out of sync, everything else follows. Spotify and Accenture are working together to reinvent the rhythm of ad sales. Using automation, analytics, and smarter workflows to simplify campaign delivery and access better data across the business.

[00:08:42] The result? Less time spent on operations, more time connecting brands with the moments and fandoms that matter most. Learn more at Accenture.com slash Spotify. And a big thank you to Daniela, who is a software engineer and sidepreneur who has gone from zero to 12 income streams in four years, paid off over $40,000 of debt in the process, and moved 2,100 miles cross-country with her wife Alexandra to live in their dream location.

[00:09:09] Prior to that, she was going through back-to-back layoffs, had no savings, and was living paycheck to paycheck. Now, she teaches thousands of others how to start and grow their own side hustles and businesses, get their money right, find remote work that aligns with what they really want to do, and live their best life. So, come by iliketodabble.com to learn a lot more. And that's it for today. Hope you enjoyed the post, and that you'll be back again with me tomorrow, where your optimal life awaits.