15 Minute Freelancer

47. Q+A on negotiating your freelance rates

February 04, 2022 Louise Shanahan Episode 47
15 Minute Freelancer
47. Q+A on negotiating your freelance rates
Show Notes Transcript

This episode is a Q+A on some gnarly freelance pricing issues, which popped up when Louise was a guest on a recent ContentUK panel on freelance pricing.

Find out more about ContentUK: contentuk.co

Mentioned on this episode:

Say hi to Louise:

Louise Shanahan is a freelance health copywriter and a big fan of finding your freelance niche. She's on a mission to help others build a freelance business that feels easy and works for them – in weekly snack-sized bites.

LinkedIn: Louise Shanahan
Twitter: @LouiseShanahan_
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Welcome to 15 Minute freelancer, your snack-sized guide to being your own boss and building a business and life you love. I'm your host, Louise Shanahan. My LinkedIn bio says I'm a freelance health copywriter. But for the next 15 minutes, I'll be tickling your ears with practical strategies, behind the scenes stories, and nuggets of wisdom so you can create a freelance business that works for you. Whether you're just starting out or you've been self-employed for a while, I'll be right here with you to help me navigate the ups and downs of freelancing life. So, grab a coffee relax and join me for 15 minutes of freelancing fun. Don't forget to hit subscribe!

Hello and here we are for another episode of 15 Minute Freelancer. Last week I took part in a panel on negotiating your freelance rates and in-house salaries for ContentUK, so I thought I’d dig a bit deeper into that juicy little topic for today’s episode. In case you don’t know, ContentUK is a community for UK content marketers, which is a great place to find resources, opportunities and conversations about all things content, so go check that out if you are in the world of content marketing.

So, the theme of that Q+A was negotiating your in-house and freelance content marketing rates, and as I say, I thought I’d revisit some of what I said there for freelancing more generally, while it’s still fresh in my mind, because these are questions that come up again and again and again, and maybe you’re asking some of these questions yourself. Some of this will touch on topics I’ve covered on this podcast before, but let’s be honest, when it comes to pricing, we can never talk about this enough, can we?

Let’s dive in. The first question that came up was what do you wish you'd known about setting your freelance rate when you first started out?

And to that I basically said you can charge more! I think that’s probably true of most freelancers. It’s really tough to know what to charge at first because unless you’re transitioning from an agency or in-house career where you dealt with freelancers a lot, you probably don’t know what the going rates are. I think when we’re just starting out we worry that we’re asking too much, we’re afraid of rejection, we probably feel like we need to just get some work under our belts, and so we tend to overcorrect. Obviously when you’re just starting out, you won’t be charging the same as someone who is more experienced, but in general, I think most people undercharge to begin with.

Some industries have day rate and project surveys you can look at to get an idea of what other people are charging, like, as a copywriter there’s the ProCopywriter Network’s survey. This is good way to get a rough idea of what to start with. However, I will say that once you’re a bit more established, these surveys are not always that helpful, because everyone’s rates vary quite a lot depending on the industry they work with, their level of expertise, their process, and how in demand they are.

Do you prefer to charge by the project or by time?

I think both work. I prefer to charge by project most of the time, because it focuses on the overall value of the work, rather than how long I spent on it. It also means both you and the client know what to expect. With time-based pricing, if you work really efficiently, you end up losing out, but if you’re really slow and inefficient, then the client loses out because they have to pay you more. It doesn’t really make sense. I like to be able to do the best work possible, without having an eye on the clock all the time. That said, if I’m working on a project where I think there might be a lot of collaboration needed or there’s likely to be a lot of back and forth with different team members, I sometimes use a day rate so I’m not worried if we need to change the plan a little bit. Sometimes you need that extra flexibility. Sometimes I want to give the client and myself the space to explore different avenues that might come up in the research, rather than thinking oh my project fee only accounted for X number of days so I’ll not bother investigating that any further. In this case, I usually give the client an estimate of the numbers it’s likely to take, and then I’ll let them know when we’re getting close to that. 

Now the next obvious question is, how do you actually figure out the price though?!

I’ve done a couple of episodes on this. There are many, many ways to figure out how much to charge for a particular project. One way to think about it is to think about what your work is worth to your clients. That means understanding what problem you solve for your client, how you do that better than anyone else, and then thinking about what the market can bear.

Then you might consider

-       how much you want to make each year/quarter

-       how many days a week you want to work

Divide the total amount you want to make by the number of days you want to work, and that gives you a benchmark daily rate. Then you can figure out how many days are needed for the types of projects you want to do, and use that to create a rate per project.

And don’t forget that when you’re setting your rate, you also need to factor in the time you spend on non-client work too, like admin, marketing and finance tasks, any expenses like your laptop and your Zoom subscription, and remember to set money aside to pay your taxes and put something aside for your pension.

Any tips on when to increase your rate and how to go about this?

Again, I’ve done an episode on raising your rates and I think people have different approaches to this. Some people do it every year or every six months, and maybe email all their clients to say hey I’m raising my rates in a couple of months’ time. The other approach, which is what I tend to do, is to raise your rates a bit with each new project. So there’s not really any conversation needed – those are just your new rates. 

It’s not controversial – most people get salary increases each year, we have to think about inflation, and as you gain more experience, you’re delivering work at a higher level. And your clients will be doing the same with their customers. It’s just a part of running a business. But it can feel a bit awkward. So if you need permission, please consider this your permission.

Other ways to increase your rate that don’t involve actually increasing your rate are to improve your processes so you can spend less time on each project, so your hourly rate would work out higher. Or you might reduce the scope of your services, agree a longer turnaround time, etc. 

How do you approach scope creep? Do you charge more?

Ugh this one is so hard! I personally find it so difficult to stick to the initial agreement, because it makes perfect sense to me that projects change a bit as you get into them. I guess the key is for us to remember that it’s not only on us to try to make up the time or somehow just manage all the extra work that needs to be done. 

Hopefully, if you have a really clear contract that sets out what’s to be done by when and how much that will cost, then you can simply refer to that any time a client needs something extra. Sometimes there might be small changes or slight delay or whatever that you might be happy to absorb, and I like to make sure I’ve charged enough that I’m relaxed about those little extras. If you already feel resentful because you haven’t charged enough in the first place, then you’re more likely to feel like you’re being taken for granted. And I think it’s important to try to anticipate what the client might need as early as possible, so you can factor that into your proposal and contract. 

You can also add in clauses to your contract to help avoid scope creep, e.g. you may have heard of a ‘pause clause’ and the way this works is that if a client is taking ages to provide feedback, then you can say that’s absolutely fine, there will be a small fee to restart things because I’ll need to rejig my calendar and I’ll need to spend a bit of time refamiliarizing myself with the project. 

And yeah, clear communication is really important. Just have the conversations with your client. Most of them aren’t trying to get one over on you, they just maybe work in a different way or have different expectations, so just have the conversation and figure out a plan together.
Have you experienced imposter syndrome when it comes to setting your rate?

I mean, who doesn’t?! I think everyone probably feels awkward talking about money at some point! The main thing as I’ve said before is your client’s budget isn’t about you. It’s not that you’re too expensive. It’s not that they’re being stingy. I mean, it might be, but in general, I think it’s more helpful to just take the emotion out of it.

I think it’s really hard because freelance pricing is such a closed book. Our processes are so different. A client might speak to three freelancers and get three completely different quotes. So it’s very hard to compare. I think you have to just figure out an amount that covers your bills or financial goals, makes you feel excited to do the work – maybe a little bit of a scary amount to say out loud. If you have clients who are happy to pay that, then you can start increasing it gradually. 

So it’s about having confidence, having a proven process, and then leading the conversation. You’re hired as a collaborator, not an order-taker, and I think when you can get into that mindset then the imposter syndrome will gradually be squashed back into its box.

Someone asked, how do I show value? I often get told I'm too expensive!

It’s about finding your Goldilocks number. If everyone says yes, your rates are prob too low. If everyone says no, you’re maybe getting a bit carried away. I’m sure I’ve heard people say that the sweet spot is getting rejected about 20% of the time. So yeah, if it’s a lot higher than that, maybe that’s a sign to rethink or find a market that’s a better fit. You know, if you’re trying to sell a £10000 web design project to a client that is still using the free version of Zoom, then it’s not going to work out, no matter how well you negotiate. 

Ways to show value would be having a proven process, having testimonials from previous clients, having stats that can show the impact that your work had, if that’s appropriate. It can be helpful to get positive feedback throughout each project as well as at the end, so you’ve got that smile file to refer back to as well. 

Final question – what are some tips for feeling ok with turning down work that doesn't align with your rates or goals as a freelancer. I'm pretty firm about it but a little voice always says "what if you never sign up another client again......."

Ugh, the perennial freelancer dilemma. What if I never get another client? But that doesn’t mean you should say yes to everything, it probably means you should do a bit more marketing to find more of your favourite clients. I try to remind myself that when you say yes to something, you’re saying no to something else. So if I say yes to this project, what am I saying no to? What will I not have time to do?

Having some values or criteria can also help guide your decisions. If you’ve really thought through them carefully and you know these are the kinds of clients you want to work with for a thriving business, it’s easier to say no to anything that doesn’t fit. Unless you want to do it of course! 

If you say yes to everything, you’ll have no time for the projects you really want.

Ok, that’s all for today, I hope that’s been useful. As always, let me know if you have any more freelance pricing questions that I can offer an opinion on – I’m definitely not an expert but I do love talking about this and helping people figure it out. You can find me on twitter @louiseshanahan_ or on linkedin. Ok doke! Until next time, happy freelancing!

You've been listening to 15 Minute Freelancer with me, Louise Shanahan, freelance health copywriter and content marketer at thecopyprescription.com. If you enjoyed this, please hit subscribe, leave a review or share it with a freelance friend. And if you've got a freelancing question you want answered on the podcast find me and say hi on Twitter, LinkedIn or Instagram. Thanks, and until next time, happy freelancing!