How to determine the value of their work

One of the most difficult decisions made by a freelancer is setting prices for their services. If you make a mistake in the price, you will have to pay a very long time. The wrong price can ultimately lead your business to failure.

There are many different opinions about how a freelancer should calculate the cost of services. Not one of them does not evaluate a specific situation or specialty of a freelancer. However, there are some general principles, adhering to which, any freelancer will be able to determine what he should demand from customers.

In general, the cost of freelance services should be based on three factors:

1. Own needs
2. Cost of services to competitors
3. Market needs

Own needs

The cost of your work must meet your needs. In addition to personal expenses, there must be a surcharge and any costs associated with the project that you incur. If you have been in business for a long time, then your rates should be sufficient to cover overhead costs. (Many freelancers forget about the surcharge when they start working.)
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Overhead costs include:

• advertising your services
• Accounting
• office equipment
• software cost
• data storage
• professional education
• medical insurance costs
• Vacation and sick leave

Cost of services to competitors

The price your competitors ask for providing the same product or service is another key factor determining your pricing.
There are a number of resources where you can find out the prices of your competitors, for example:

Income research freelancers . Many professional communities conduct periodic income surveys, often containing incomes of freelancers. Try to find the latest research related to your specialty.

Comparison with the earnings of office workers . The personnel department and staffing agencies frequently update office salaries. You can get this information from a human resources specialist or from publications intended for staff.

Sites of competitors . Many freelancers publish the cost of work on their sites. If you use this method to find out the cost of services of your competitors, do not be lazy to check more than one site.

A good way to set your own prices, in accordance with competitors - the golden mean. It is unlikely that you want to set the price for your services higher than that of a competitor, but you shouldn’t underestimate too much.

Market needs

Freelance is particularly sensitive to the basic principles of the market - supply and demand. If many freelancers offer the same services that are not in demand, prices tend to go down. On the contrary, if there is a large demand for specific services and these services are offered by a small number of people, prices will increase.

As a freelancer, you may have to periodically reassess and change the cost of work to meet the current market situation. Over time, you can even notice certain trends in their field. You can tailor your business model using these trends.

If you are a freelancer in a specialty where the number of offers exceeds the demand, you may need to think about changing the service offered. Think about providing a complex of different, but interrelated services that have no equivalent in other freelancers.

Share your pricing strategy

Have you been a freelancer for a while? Share your pricing experience for your services.