Often, one of the hardest things for a freelancer to do is set a price  Especially when you’re just starting out, the tendency is to charge far too little for work to be sure to get plenty of it.  That tendency will wear off when the work starts coming in more regularly and the fear of losing potential work because you’re charging market rates or too much is outweighed by the need to earn a reasonable wage.  But how do you know you’re undercharging, and how do you go about setting a price?

It sounds easy enough to decide on an amount per hour that you want to earn, and you should think this way.  But as a freelancer, it’s more likely that you’ll be billing per project rather than per hour, unless you tend to work on long-term projects where you are paid per hour by agreement.  Freelance writers will probably bill per article, press release, grant or other project, where designers might bill by website, logo or other graphic creation.

In the beginning, you could very well end up working for far less than your ideal hourly rate, simply because you underestimate the amount of time a project will take.  If you quote a client a rate of $150 for a project based on your desire to earn $45 an hour, for example, and the job takes you 7 hours, or 12, you’ve undercut yourself by quite a bit.  Those are live and learn moments—it might take doing a certain type of project a few times before you come up with the right quote for the time you’ll be spending. Among new freelancers that’s a common phenomenon.

So how do you decide which hourly rate is reasonable? Don’t pluck the number out of the air. Look at your competitors and other people in your industry, even contact a few and simply ask about how their rates break down per hour, and set your prices accordingly.  Be sure to consider your experience when choosing your prices, but don’t undervalue yourself even if you’re just starting out.  Find a few freelancers in your field with years of experience and some fairly new freelancers. Think of their rates the far ends of the scale, and choose yours based on where your experience lands you in that range. As you gain more experience, your rate can climb the scale accordingly.

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