Pricing is one of the cores of any business or entrepreneur. It is how goods and services are evaluated, ordered, exchanged and valued. Therefore, it is very important that such a crucial step is discussed to avoid situations where a partner is made to feel like he/she has been undervalued or shortchanged.
How does pricing apply to Freelancing?
Freelancing is just like any other craft or service providing career that deals with pricing and in this case, it’s quite sensitive because the service provided is mostly intellectual works and properties which means, in as much as we try to place monetary value on works of intellect, care needs to be taken concerning how we price it, what we charge and what we settle for in order to avoid demeaning payments, losses that can lead to discouragements and quitting.
Be that as it may, how then do we effectively calculate pricing as a Freelancer?
Of a truth, pricing can make or break you as a Freelancer and Entrepreneur. It can be quite tricky and difficult to decide how to price your business due to a lot of factors that are most of the times client-conscious especially as budding Freelancers trying to get clients or as experienced Freelancers trying to survive competition; still, there are effective ways to calculate pricing without being at loss and still being considerate of your clients outside pricing styles like hourly-rates, competitive pricing, etc.
Below listed are three of our most effective pricing methods for Freelancers;
1. Fixed Project fees – This is one of the most effective ways of pricing as a Freelancer. Most of the times, it’s helpful and productive having a fixed price for projects and services offered so as to avoid inconsistencies when you charge and most importantly, it helps to avoid having to sound clueless about your own pricing when clients request for your quotations either verbally, by mail or other avenues. Having fixed project fees also helps you to access your incomes at the end of the day because you are able to trace and review how the money came in and through what kind of project. It’s also very important to note that this pricing method is both Freelancer and clients friendly because as a Freelancer, you have the opportunity to define your cut limits with your clients as it is comfortable for you. There’s always bound to be cuts; so, it’s basic that your fixed fees give room for cuts. In other words, when your fixed price is cut, you should still be able to speak of no loss but gain.
2. Value-based pricing – Of course, most freelance works are value-evaluated but that’s not what we mean when we say Value-based pricing. This is an effective pricing method for Freelancers, especially content writers, contributors and more and this is done when the Freelancer evaluates the value he/she will be gaining from a supposed client or platform in relation to the service he/she is providing. It means that sometimes, a Freelancer is liable to offer a service in exchange for a value in return. For instance, a Freelancer can choose to write for a platform in exchange for exposure, products to use and review, events and more. In this regard, a Freelancer may weigh the situation and price based on value.
3. Cost-plus pricing – This is another effective pricing method that takes into cognizance the amount you’ll be spending on the project as a yardstick to draft your pricing. In other words, it means your pricing is built on how much you’re certain to spend on the project/service itself and this, if not done thoroughly could lead to an undercharge or sometimes, an overcharge. For me, I think it’s still better to overcharge than to undercharge because the former gives room for a great bargain at no one’s expense. Also, when using cost-plus pricing, it is important to take note of all your costs and not just variable cost. In other words, you are to calculate everything that needs to be calculated.