How do I set my rate for a new project?

[TechieAlok]

Hello everyone!

I'm relatively new to freelancing and I have a question about setting my rates. How do you determine your pricing for different types of projects? Are there any specific factors you consider or tools you use to come up with a fair rate? Any advice would be greatly appreciated!

Thanks

 

[fisicx]

You work out how much you need each month to pay the bills. You then work out how many hours you will be working each month. Divide one by the other to get an hourly rate.

But take into account NI, Tax, Insurance, marketing costs, software and hardware and everything else work related.

Which means your hourly rate to survive might be £60 but with all additional costs you need to charge your clients £90/hour.

 

[Shopclicks]

But take into account NI, Tax, Insurance, marketing costs, software and hardware and everything else work related.

And a profit margin. Otherwise you just have a job.

 

[HFE Signs]

As above, but also do your research on what others are charging so you're not underselling or outpricing yourself.

 

[Annoying Donkey]

What is the value to your client...?

Back in my IT consultant days, my basic rate was £500/day. I was offered a short term job that I didn't want to take. So I quoted £5000 per day, expecting them to go away...

They accepted. I later found out they would have accepted much more as they were up for millions in fines if the work wasn't done...

 

[TechieAlok]

You work out how much you need each month to pay the bills. You then work out how many hours you will be working each month. Divide one by the other to get an hourly rate.

But take into account NI, Tax, Insurance, marketing costs, software and hardware and everything else work related.

Which means your hourly rate to survive might be £60 but with all additional costs you need to charge your clients £90/hour.

Hi Fisicx, thank you for those tips.

 

[TechieAlok]

What is the value to your client...?

Back in my IT consultant days, my basic rate was £500/day. I was offered a short term job that I didn't want to take. So I quoted £5000 per day, expecting them to go away...

They accepted. I later found out they would have accepted much more as they were up for millions in fines if the work wasn't done...

My clients are really smart haha. So I have to be very careful while quoting my hourly or daily rate. Also, project wise rates would vary I believe. What do you suggest? would it be a good idea to quote a fixed amount per project or hourly rate would be more beneficial to me?

 

[fisicx]

My clients are really smart haha. So I have to be very careful while quoting my hourly or daily rate. Also, project wise rates would vary I believe. What do you suggest? would it be a good idea to quote a fixed amount per project or hourly rate would be more beneficial to me?

Depends on the client and the project. I charge more for Norwegian clients than I do for a charity in Africa.

Building quotes is a skill. I've been doing it for about 20 years and still get it wrong sometimes. Project creep is your enemy. Every time the client says 'can you just...' tel them how much it will cost. Might only take you 5 minutes but it's a hour on the quote (because the 5 minutes doesn't include the emails, clarifications, whinging and prevarications by the client).

Fixed amounts can work. But you have to be very precise on what they get for the money. Might take you two hours to determine the figure so you add those two hours to the project fee.

There are no rules on how much you charge. Only you will know what you can get away with.

 

[JamaC]

The question is how good are you at what you do?

Set a price according to what you think you are worth.

You can't match the price of the average Joe in your field when you are top tier at what you do

Same vice versa, you can't charge an arm and a leg when you are average at best

Although many do both


I find people are often afraid to set prices higher than the standard within their field and try to stay in the safe zone (average) of pricing. Always remember there are customers who don't want cheap or average, they are willing to pay that bit more for experience, better quality etc

Naturally, people associate higher costs with better quality. I struggled with this at one point but now I stand confident on what I charge. If its too much then my services are not for you