dollar sign

Money is always a touchy subject, isn’t it?

Equal pay for equal work done by men and women is still an issue. Companies don’t seem to want employees sharing salary info. Independents rarely share billing information either, and we’re always wondering if we’re charging too little or too much. And those who hire us aren’t likely to say, “Hey, you aren’t charging me enough for what you do!”

Although freelancers should charge for value rather than time, if we don’t know the value of a project, our proposals are often based on how much time we estimate it will take.

Meanwhile, hiring companies want to know how much we charge per hour, inevitably leading to a comparison. The “Walmart Effect” encourages those who see dollars rather than value to go with cheaper options, even if someone who charges less per hour might end up taking more hours to do the job.

My local IABC Professional Independent Communicators group surveyed our members in 2014 about pricing. I was surprised to find that some of those who responded (28.1%) had never raised their fees, even among those who had 15 or more years as indies! And two people with an average 12 years in business had actually lowered their rates.

Tell me what business you have been to lately that still charges you what they did several years ago, or less. A bank? A grocery store? An airline? Don’t make me laugh.

I’ve found some great posts with advice related to pricing:

  • Seven reasons low fees hurt your business, including attracting problem clients who probably won’t pay on time either – Ed Gandia and the International Freelancers Academy
  • Recognize when you aren’t charging enough. “If nearly every single client hires you based on your low price rather than on the quality of your work, you are definitely not charging enough for your service.” – Freelance writer Laura Spencer in a post on increasing your rate, doubling your income and saying ‘no’ to bad clients
  • Don’t aim to be the cheapest. “In the long run, to be the cheapest is a refuge for people who don’t have the flair to design something worth paying for, who don’t have the guts to point to their product or their service and say, ‘this isn’t the cheapest, but it’s worth it.’” –  Seth Godin on the “tyranny” of the lowest price
  • Raise your rates. “If no one has questioned your rates in a while, it’s time to raise them.” – Copyblogger, in a post listing 53 freelancing mistakes
  • Need some advice on HOW to raise your rates? – Entrepreneur’s Grant Cardone has three strategies for raising your prices, including the magic of alternatives
  • Understand your value and say ‘no’ to outlandish requests for your time and effort. – a Forbes piece called “Why you’re not charging enough for your work, and how to change that
  • Learn from undercharging and ask more next time.Freelancers Union, in 5 reasons freelancers undercharge for their work
  • Build value first, always go high and 35 other negotiating tactics to help you get paid what you’re worth – Copyblogger
  • What to say when a prospective client says your price is too high, including my favourite: “Oh, what price did you have in mind?” – writer Anne Wayman
  • Why calculating your freelance rate is so important, and how to do it, on Contently’s The Freelancer (new)
  • How to move from an hourly rate to a project rate, by Sarah Greesonbach on The Write Life.

If you’re an independent, when was the last time you raised your rates? If you hire independents, do you expect their rates to rise each year? Do they?

(Updated and links checked March  2019)

Related reading:
A PIC session in 2013 included some tips on pricing
Download PIC’s fee survey report under Resources
How retainers can provide a set income (from Copyblogger)