The 4 ways to price your work: (hourly/daily), project-based, retainer-based pricing & value-based pricing

Pricing is the most difficult part for any creative person. We feel uncomfortable charging money for doing something that we love and that’s totally normal — I battled with the same belief for years, but not anymore. My goal with this article is to share with you the various ways you can price your projects easily — whilst always being profitable.

The first paid gig that I worked on in 2008 was for a whopping?*drum roll please*?￡60 a day and I thought that was incredible to be paid for what I’d happily do for free — but soon enough I realised, this wasn’t sustainable.

People think?pricing?= your?skills?+ the?amount of time?spent?on the project. But this is far from the truth.

How much you charge always depends on WHO is buying.

You might be thinking Nick, how do I actually go about charging for my services? Let’s dive in with an example.

Imagine you have two clients reaching out to you. One is a small restaurant owner who needs video for the restaurant ads. The monthly revenue of the restaurant is ￡5,000. Only the owner and her partner manage their small restaurant & their budget is ￡500. The second client is a restaurant owner who has 15 people team & makes ￡50k a month and their budget is ￡8000.

Now you can clearly see you will do the?same work?for two people but the?valueof your work is different for both of them. The impact that your work can bring to both clients is different, so before saying your price you need to understand?whois the client, what their?needs?are, and what is their end?goal. Remember, how much you charge always depends upon who is buying —?price the client, not the job.

So here are different ways to charge as a freelancer.

1) Hourly rate?— Most freelancers charge based on the hours they put in the work. Just imagine you work for 10 hours and your hourly rate is ￡100 so you’d charge ￡1000 for the project. The negative side of charging like this is if you work fast — you get?paid less. You get punished for being efficient, which is crazy right? Pricing hourly is totally common if you’re at the early stages of your career. There are some unique cases where charging hourly is a benefit, but will talk about it a little later. For now, let’s talk about the next model, which is a flat rate.

2) Flat rate or Project-based?— with this, you charge a fixed amount for the work. Imagine the client wants 10 videos and you charge directly ￡15k for the client. It’s a flat rate (or ‘buy-out’) for the specific work. This is an amazing way to charge as a freelancer if you do the work in just one day you will still get paid ￡15k. Equally, if you spend 15 days shooting these videos you will still get paid the same amount.

But sometimes, most of the clients add some more work that is outside the initial scope of work, like “can you also edit a 15-sec video for me?”. It’s a small and quantifiable change, so here you can charge hourly for the additional cost. Another tip is that you need to mention any overtime will be priced hourly in your proposals. If you need a hand with this — we have our pricing tool,?The Quote Generator?which is designed to help you price your projects based on industry-researched hourly rates for you and your team.

3) Retainer-based pricing?— Retainer clients are the clients who pay you a fixed amount on a consistent basis, typically each month and anywhere from a 3–12 month contract. For this type of pricing, you’d agree to a set price and deliverables for that time period. For example, ’20?videos for ￡5000 a month, anything out of scope I charge hourly’.?You can ask them to book you for 3 months in advance and give them a discount on that commitment — because the security of that consistent income offsets the time you would’ve spent looking for new work.

What if you charge ￡5000 for a retainer client and you only have 3 clients that have booked you for the next 6 months, which is paid to you 3 months in advance. That’s ￡90,000 in 6 months without looking for any new clients and around ￡45,000 upfront — not bad. Now you have the flexibility to hire people, automate the work processes & transition from a freelancer to creative studio. If you are interested in taking your freelance career to the next level,?Freelance Mastery?can help you to do this really fast, by providing you with all the necessary tools, resources, and community to support you along the way.?Click here to join.

4)?Value-based pricing?— Value-based pricing is for pro-freelancers. It’s a concept of charging based on the?value?it brings the?client.

Let’s simplify this — Imagine that you’ve created a promo video for the client that they can use internationally to promote their business and you charged them a measly ￡2000 flat rate. But they can use that video for years to come with different ad campaigns and maybe they will make hundreds or thousands of dollars from that single video. Now you can see the price of the video needs to go up because they are making a huge amount of money from that single video. Value-based pricing is similar to that — you charge based on the value which means you calculate what that value is to the client.

Value isn’t determined by you, it’s determined by the client.

Instead of saying the price upfront, ask deeper questions and find out the value that your service will offer their business, and on the basis of that, you price your service accordingly.

Learn more about value pricing & how to implement it here

Final thoughts

1. If you are a beginner freelancer I suggest you stick with either hourly rates and flat rates.
2. Once you have a portfolio under you, look for 2–3 retainer-based projects to act as a stable income.
3. If you are a seasoned freelancer and confident with your ability to understand and sell, then you should focus on value-based pricing.
4. You can learn everything in detail join the Freelance Mastery course — the #1 freelance course which helps you to land high-paying clients, fast.

Access Freelance Mastery ???www.nkcourses.co.uk