Freelancers: How can you justify rates that are “above market”?
Finding out how to set your rates is one of the most challenging things that freelancers face. Between the fear of selling yourself short and the anxiety caused by setting rates too high, striking a balance can be quite difficult! Here, we give out a few tips that can justify “above market” rates and giving you an idea of how freelancers should set their rates.
Let’s first of all clarify what we mean by “above market” rates. In fact, as a freelancer, there is really no such thing as a “market rate.” Indeed, rates are largely set based on your individual value, which is derived from the value of your work as a whole, provided that it aligns with your client’s needs. In addition, there are some truly shocking extremes in terms of rates: on the one hand, there are freelancers who are working out of countries where the cost of living is so low that they can get away with offering scandalously low rates to their clients, while on the other hand there are some superstar freelancers who can charge €10,000 for an hour just by speaking at a conference. Finally, no matter the line of business activity in which the freelancer specializes in, there are so many different elements that form the basis for a rate that it is almost impossible to quote a “market price.” Here are some of the most relevant aspects.
It might seem obvious, but nonetheless… higher rates can be justified based on a freelancer’s experience, no matter the industry sector in which they work in. The more you practice, the more value you add in your work, and therefore the greater your claim on a higher price rate (hourly or daily) will be justifiable. Let’s take the example of graphic designers: a junior freelancer will charge between $250 and $300 per day, whereas a senior will be billing in the region for $600 for the same number of hours. (Note: these are average prices in France and are only used as reference points, because some people will be charging $60 per day, while others will charge $2,000!) If you’re highly experienced, you can therefore justify doubling your rates.
Along with experience, different freelancer's skills can be used to set their respective rates. First and foremost, it is a question of specialization that enables each freelancer to calculate an appropriate hourly rate. The more specialized you become, the higher the rate that you can charge, particularly if your niche is extremely specialized and sought-after, in which case it is a simple question of supply and demand. After that comes the level of expertise, which can also help set a higher rate. Accordingly, a web editor who specializes in microbiology will undoubtedly be able to set a higher rate than an experienced community manager, even though their respective qualifications have nothing in common!
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3. The position of your potential clients
Everyone’s rates should be adapted to suit their potential target clients. In fact, the most important thing is to set a minimum rate below which you will decline to work for: for example, $30 per hour, as well as the desired average hourly rate (e.g., €$0 per hour). You will have noticed that there is a significant gap between these two rates! Equally, if a large corporate customer offers you a one-off, one-day job, you may be able to request $60 per hour. On the other hand, if an SME offers you a long-term position, you may be happy to remain close to your $30 hourly minimum. The name of the game is adapting to your client base to set your rate depending on the amount of value that you add as an individual, as well as the guaranteed benefits that the role offers for you, as in the above example.
4. The nature of the request
This is very straightforward: if you are asked to perform urgent jobs, with very tight deadlines, you should charge a higher rate. Similarly, if a role demands a great deal of flexibility from you (e.g., to be available four hours per day, four hours per week, without knowing your exact schedule until the day before, you would be entirely justified in suggesting rates well above those offered by another freelancer with similar experience and skills, but for a more ‘firm’ commitment).
5. Social standing
Undoubtedly, your social status can’t possibly justify a high rate in its own right: if you are just starting out as a freelance translator and offer extremely general translations, there’s no way you can expect to earn $100 per hour. That said, given that a freelancer is a business that has to deal with the same overheads and tax as any other business, your status needs to be a factor. In other words, your business must be remunerated in such a way that you can live off your earnings!
Learning how to set your rates is a skill that you naturally pick up with experience, more or less anyway. Everything is a question of positioning (in relation to all the factors described here), and rates charged by freelancers are therefore relatively subjective, based on the nature of the task that you are offered. As such, smart and skilful calculations are needed to justify higher rates.