Freelance income should be set strategically to ensure you’re not undervaluing your services. If you’re a graphic designer, web designer, photographer, or creative agency, pricing your services right is the difference between thriving and barely getting by. Freelance income should cover your costs, reflect your expertise, and allow long-term profitability. But beyond pricing, you need to clearly communicate the value you bring to your clients to justify your rates. Let’s break down the best pricing strategies to make sure you’re getting paid what you’re worth.
1. Know Your True Costs
Pricing starts with understanding what it really costs to run your business.
- Factor in software subscriptions, hardware, insurance, taxes, and office expenses.
- Don’t forget non-billable hours—marketing, admin work, revisions, and consultations all take time.
- Pay yourself a fair salary! Pricing too low means working more hours for less return.
Pro Tip: Use your cloud accounting software (FreshBooks, Xero, or QuickBooks Online) to track monthly expenses. Learn how to generate reports that give you a precise view of your business finances. Understanding these numbers will help you confidently set your pricing with reasonable margins.
2. Factor in Taxes and Profit Margins
Don’t just break even—profit should be part of your rate.
- Set aside 25-30% of income for taxes.
- Add a profit margin (at least 20%) so you can grow and reinvest in your business.
- Adjust rates annually to keep up with inflation and rising costs.
Pro Tip: You’ll definitely want to use the project tracking features on your cloud accounting app for this. Track your time, expenses and efforts for each project. This way you’ll have a more informed base on which to base pricing for future projects. You might find this article helpful? Effortless Expense Tracking for Creative Professionals.
3. Research Industry Standards
Your pricing shouldn’t be a guess.
- Look at the competitors in your niche and location. Make sure you’re examining those who offer the same level of training, professionalism, and expertise that you do. Also look at rates for comparable professional services.
- Consider industry reports, freelance communities, or survey past clients to see what they expect to pay.
- Don’t undercut yourself. Cheap rates attract difficult clients and undervalue your work. Over time, you’ll get burnt out and resent your client.
Pro Tip: Here’s an example: In the accounting industry, bookkeepers used to be looked at as data entry clerks. With rapidly advancing technology, highly trained professional bookkeepers are now Client Advisors. They offer much more complex accounting and reporting services. Yet, many small business owners want to pay data entry rates. Know your worth!
4. Set Yourself Up as an Expert
Your pricing should show your skill, not just your time.
- Position yourself as a specialist, not just another freelancer.
- Showcase testimonials, training, and achievements that prove your work creates value on your website.
- Include logos of professional organizations you belong to.
Pro Tip: Instead of just listing what you do, emphasize the results. For example, “I design websites that help businesses increase conversions by 30%” sounds stronger than “I build websites.”
5. Choose the Right Pricing Model
How you charge affects how much you earn.
- Hourly rate: Good for short projects but caps your earning potential. It also becomes uncomfortable when the service you provided took more time than estimated. No one likes surprises.
- Flat rate project-based: Provides upfront clarity and better rewards for efficiency. The added advantage is that clients can budget for your service.
- Retainer model: Steady income from ongoing clients; great for agencies. Again, you’ll want a simple yet effective project management feature in your cloud accounting app.
- Value-based pricing: Charge based on the impact you create, not just time spent. Highlight your unique approach and problem-solving skills.
Pro Tip: Clients are more likely to choose higher-priced services when they see the extra value. Show how your services save them time, improve their brand, or increase revenue.
6. Create Packages That Reflect Your Value
Packaging your services helps clients see the full scope of what you provide. People LOVE choice! Let prospects choose their budget while reflecting your value.
- Offer tiered pricing—basic, standard, and premium packages—to let clients choose their budget.
- Define deliverables. Explain what each service in the packages does, and the benefits of each package.
- Emphasize value-added services such as strategy consultation, revisions, or priority support.
Pro Tip: Adapt each package to fit your prospect’s industry. Look at not only what they ‘need’. Instead, develop additional services you feel would help them for your standard and premium packages. They might not realize you offer that service, nor what the benefit is.
7. Highlight the Value You Bring
Your clients are not just paying for a deliverable—they are paying for your expertise, efficiency, and problem-solving skills.
- In your first conversation, find out what their needs are, their frustrations, pain points and goals.
- When discussing your packages, explain how your work helps their business grow. Show how it resolves their needs, frustrations, and pain points.
- Include examples of past projects and the tangible results you’ve helped clients achieve with particular services.
Pro Tip: Try to be benefit focused when discussing each of your services. Have a pre-made script or ‘cheat sheet” if needed.
8. Say No to Lowball Offers
Not every client is the right fit.
- If someone wants a discount, instead of just saying no, redirect the conversation: “I understand budget is important. Here’s how we can adjust the scope to meet your budget while still delivering strong results.”
- Position yourself as an expert, not a bargain brand.
- As a last resort, build in a ‘safety valve.’ If you really want that client, add a give-and-take option. “If you do this for me, I’ll give you …..” It could be a small discount, a credit on future services, etc.
Pro Tip: Avoid clients who expect premium work at budget rates. You will end up resenting having to do the work for them. This can negatively affect your performance, and your mental health. Better to disengage and utilize that ‘newly found time’ to work on your business and getting better clients. This article on the True Cost of Scope Creep also reflects on
9. Raise Your Rates with Confidence
Your skills improve, and your pricing should too.
- Announce rate increases professionally—give clients 30-60 days’ notice.
- Justify the increase by highlighting improved expertise, expanded services, or rising costs.
- Testing higher prices on new clients. For existing clients, raise prices in increments to get to your value price. Always reposition your services by clearly showing how you add value.
Pro Tip: Be sure to include a clause in your contract that prices increase annually by at least 5% at the least. With your annual increase notice, let clients know your costs of doing business are increasing just like theirs. Highlight the milestones you’ve made working together in their business. Also consider something like “With this rate adjustment, I’m able to dedicate more time to strategy and offer higher-quality results.”
Time to Take Control of Your Freelance Income
Your freelance income should reflect your skills, effort, and expertise—price it accordingly. The key is not just in setting rates, but in helping clients see why your services are worth the investment. Need help structuring your pricing to showcase your value? Click the PINK button to schedule a chat.
