From Negotiation to Payday: How to Set and Secure Your Freelance Rates
When you decide to take the leap of faith and enter the world of freelancing, one of the trickiest parts is setting your rates. If you decided to ask for too little, you undervalue your work and can cause yourself financial burden but on the other hand, if your rates are too high, you may risk scaring off potential clients.
So how do you find the perfect rate for you? While it may seem impossible, there are ways to determine your ideal rate for whatever stage of your freelancing journey you’re in.
In this article, we’re going to help you put the pieces together in the pricing puzzle so you can move forward with confidence and ease.
1. Understand your value
Before you can start setting rates, it’s crucial to know what you bring to the table and what that means for the work you do. So to begin, consider these two things:
Identify what knowledge and experiences set you apart from your competition. Think beyond your current professional skillset to include volunteer experience, educational background, and other knowledge that you’ve gained through your personal experiences.
Example: You’re a corporate event planner, but you volunteer regularly at a nearby shelter and have experience facilitating group events. You can translate that into consulting for other volunteer-led organizations.
Identify your expertise. What skills make you unique in your space? These can be technical skills (software proficiency, project management, etc.) or “soft” people skills, like a knack for making clients feel at ease.
Example: You’re a graphic designer who’s worked in retail before. Your eye for noticing trends in fashion could help make you a standout for creating custom lookbooks for a personal brand.
Your expertise and your skills have immense value—don’t undersell yourself out of fear! A specialized skill set can easily justify a higher rate for your work.
2. Research, research, research!
And we mean actual research! Ask people you know in your field, read books or articles (like this one!), and search online (not just AI, really search for the good stuff) so you can have years, if not decades, of others’ knowledge and experience before you set pricing. Take notes and use your research to benchmark your pricing.
Browse platforms like Upwork, Fiverr, and even LinkedIn to see what your peers are charging.
Note: It doesn’t mean you have to mirror their price points, but it gives you a great idea of where your potential clients are getting their budgets from.
Join industry-specific membership groups or communities to gather rate insights.
Note: If membership fees are out of your budget right now, see if the organization hosts any free or low-cost events that are open to the public. Many of these organizations (like the American Marketing Association) use free events for recruitment, but you don’t have to join right away — you can attend the events just to network, ask questions, and gain new perspectives.
Ask!
While it may seem simple, if you have a mentor, a friend, or even a friendly stranger in your industry with more years as a freelancer, ask them if they don’t mind sharing their pricing or even their service guide. Remember YOU are what makes your services unique, so don’t compare your success to your competitors — just research and move forward.
Choosing to stay informed will help you remain competitive while ensuring you aren’t underselling your services.
3. Factor in your business expenses
Going freelance is not cheap. There’s no guaranteed income from month to month, but there are guaranteed expenses. As you consider your pricing, also include your personal and business-related costs to make sure you’re sustaining your quality of life as much as realistically possible.
Calculate your monthly expenses: your software, tools, marketing costs, taxes, etc.
Don’t forget your other incidentals! Do you drive to your clients? Include transportation costs like ride-share fees, gas, and even oil changes. Don’t forget food, too! Creative energy requires fuel, which means you have to feed yourself enough to support all that brainpower.
Add a buffer to help you cover unexpected costs or downtime between projects.
Freelancers usually don’t get PTO (paid time off), so make sure you include a cushion that allows you to support yourself if you get sick or just need a break to recover before your next project.
Your rate should reflect not just the time you spent delivering your services, but also the expenses required to operate your business sustainably.
4. Create a rate structure that works for YOU!
There’s more than one way to charge for your services. Explore some of the different ways to charge below:
Hourly Rates: Similar to hourly work as an employee, this is ideal for open-ended, ongoing projects or a client that wants regular consulting services with no particular end date.
Project-Based or Packaged Rates: This type of service is usually based on the client’s specific needs/wants, and typically has a set timeline and end date. This is better for clearly defined deliverables (i.e., a new website or landing page).
Retainer Agreements: This is going to vary based on your industry, but this option provides steady, ongoing income with set monthly fees.
Think of an in-house IT manager who is on-call for a business or a resident art teacher for a local museum. While they’re not employees, they are on retainer and under contract with their clients.
The beauty of freelancing is that you don’t have to choose just one! Having these flexible options allows you to meet the needs of different clients without compromising your worth.
5. Negotiate your rates…CONFIDENTLY.
A lot of us can be fearful of negotiating with clients, especially if you’re a new freelancer. But negotiation doesn’t have to be intimidating! Keep these strategies in mind when you’re at the table:
Start with your highest reasonable rate. This leaves you wiggle room to negotiate if needed.
Note: You want to start with your ceiling because it’s a lot easier to negotiate down than up. If you tell your client your lowest price, that’s what they’re going to agree to.
Know your “walk-away” price. Set a boundary you won’t cross (AND STICK TO IT). This ensures you don’t accept lowball offers.
Note: Setting boundaries is a popular term these days, but seriously — give yourself a hard out. You can never increase your income if you’re constantly settling for scraps; you’re worth the price to the right people.
Highlight value over price. Instead of focusing just on the numbers, communicate clearly to your client(s) the benefits your work will provide.
Note: If you’re dealing with C-Suite/Executives, use their language, showcase how your work will help them meet their business goals, and communicate their ROI (return on investment).
Example: “By hiring me to update your company’s logo, you can increase brand awareness, build trust with your customer base, and show your employees that you’re willing to modernize, leading to better retention and increased sales. "
Negotiation is about finding common ground, so stand firm on what’s fair for you and don’t be afraid to say no when necessary.
6. Be transparent
The best way to stay consistent is to remain transparent with your clients. When you’re discussing pricing with potential clients:
Outline the scope of the work and what’s included in the fee.
Note: Think of how you get a price breakdown from the mechanic when you get your car or home systems serviced. Give your clients a breakdown in your proposals or quotes so they know what they’re paying for. You don’t have to give them every line item, but explain how you got to that total.
Stay ahead of conflict by being upfront of any additional costs like rush fees or revision charges.
Note: You can also include this in your contract to cover you legally. Make sure to have an attorney review it for clarity and legal standing in your state.
Staying transparent from the beginning builds trust, sets expectations, and reduces friction during your negotiations.
Crafting a Rate that Works for You
Settling on your rate/pricing is an ongoing process. It takes a unique balance of research, self-assessment, and negotiation. Always remember that your rates will evolve as you gain experience and scale your business. The key is to remain adaptable while never compromising on your worth.
Have questions about setting rates or need some personalized guidance? Connect with us for a mini-consult so we can talk it out and unlock your earning potential!
Want to keep learning about the art getting paid to freelance? Check out these reference articles:
Forbes. (2023). How to Set Your Freelance Rate. Retrieved from Forbes.
Upwork. (2023). How Freelancers Can Calculate Their Hourly Rate. Retrieved from Upwork.
LinkedIn. (2023). Freelancer's Guide to Negotiation: Setting Rates That Stick. Retrieved from LinkedIn.
Written by Marlesa Willis, Co-Founder of The Marls Collective, passionate about helping entrepreneurs know their worth and never compromising on it.
