How to set rates with your new freelance business

Another day, another article about rates… No seriously, it’s a hot topic for a good reason! Rates and money in general can be very overwhelming. Pricing your services, making sure everything that needs to be paid gets paid, making sure you’re actually making money for yourself—these things are not easy to figure out.

The lack of understanding, the overwhelm, and even the anxiety surrounding money talks doesn’t mean freelancing is not for you. It only means you have something to figure out to make freelancing sustainable. Here are 3 ways to consider to help you start.

Is it okay to work for free?

Short answer: YES!

Long answer: Yes, and you need to know the limits, the reason you’re working for free, and what you’re getting out of it. If you’re not getting any money, might as well get something that will help you advance your business— for instance, a testimonial.

Working for free is something many freelancers are against. If you’re starting from square one with literally zero experience and a tiny network, it’s not a bad idea to do one or two projects for free. As long as those projects won’t take months!

This could serve you in many ways. It might give you a taste of what being a freelancer is or give you a source of testimonial. You could also ask for referrals, or maybe it can lead to your first gig! You have to know when you’ll stop working for free or how much free work you are willing to give.

How do you know your rates?

A quick Google search will tell you that per word rates range from 20 cents for newbies to $1 for experienced writers. This means, if you’re a newbie writer, you can charge $200 for a 1,000-word blog post. It’s understandable if you’re not sure how to sell your services at that rate. Here’s how you can navigate through this:

1. Connect with other freelancers and have open conversations about rates

I personally don’t think I would’ve charged $350 per blog post if I’d never chatted with fellow freelance writers and journalists. There are many Facebook groups where freelancers have open conversations about the business—money included. Those groups are heaven for new freelancers! 

2. Read ‘Year-In Review’ articles from others 

This could trigger some jealousy and envy, which is totally normal. We’re all human. However—and this is more important—it could also trigger inspiration and persistence. A lot of freelancers share year-in-reviews usually in the form of blog posts.

In a nutshell, it shows how much they made that year, what type of projects they worked on, which projects made them the most money, how many hours they worked, and what their future goals are. This will give you a peek into what other freelancers charge and will help you better frame your business.

Year-in-reviews are helpful, but note that there are so many things happening in one’s freelance business that don’t get included in those reviews.

3. Listen to your gut

Freelancing is so vast and there is really no playbook for it, researching rates can be overwhelming. You’ll see a lot of numbers. One way to get the ball rolling on a number for your service(s) is to charge what you’re comfortable with and go from there.

If you’re a writer and you’re comfortable charging $50 per article, and then one month in, you realize it’s too low, make it $70. Or $100. The best part of freelancing is that you have the freedom to grow and make necessary changes whenever you please. You don’t need someone else’s permission. 

Why we advocate for setting rates you’re comfortable with

There are many ways to set rates when you’re new in the freelance business. You have to be comfortable with your rates. Mainly because this will make the process of marketing and selling your services easier.

Most newbies’ number one goal is to find a paying client. However, you won’t be able to find those clients if you cannot sell your services at a rate you’re comfortable with. If you feel like a fraud giving them numbers that feel high for you, go with your gut and let your research guide you to find a number that is value-based.

At the end of the day, what other people charge doesn’t have anything to do with what you charge. Use their numbers and their rates as a guide, and maybe even as inspiration. When it comes to setting rates as a newcomer in the freelance business, what matters is that you feel good about your number.

Tammy Danan
Tammy Danan

Tammy Danan is a storyteller who reports on environmental and social issues. She also covers productivity, creative pursuits, and the future of work. Her words have appeared in VICE, Audubon.org, ZEKE Magazine, Shutterstock, Toggl, among others. You may find her on Instagram @SlowFreelancing.