Many people leave formal employment for the flexibility of being a freelance professional or consultant. One of your first challenges will be to set a fee for your services. What should you consider when putting a price to your skills and knowledge?
Most consultants find that they are facing increasingly tough competition and a dwindling client base in the face of companies tightening their belts. This makes naming a fair price for your services even more crucial to making a living and retaining your client base.
Separating business and emotion
If you are just starting out, you're probably nervous and may feel that you don't have enough experience to set a "high" rate. Letting go of these insecurities and acknowledging your value, will help you strike that balance between selling yourself short and not aiming too high.
Remember that you probably have many years of experience in your particular field and many businesses are lacking in this particular area. Your expertise is therefore in need and it is your right to make a good living off the advice and knowledge you have to offer.
Many people name the lack of a formal qualification, such as a degree, as another barrier to charging a lot. But years of experience and a proven track record is just as valuable, if not more so.
Here are some tips to help you set your rate:
- Look at what others in your field are charging and set your rates in this bracket. While you have to be competitive, your fees can't be too low. Potential customers will feel that this indicates limited experience and that you may not be as good as someone who is much more expensive.
- Consider setting slightly different fees for different types of customers. A small business may have a smaller budget, while larger companies can afford to pay a little more.
- Have an hourly rate and a package rate (for the whole project). This will give a customer more options to choose from and will help you have a few months of guaranteed work rather than waiting for them to get back to you after each phase of the project.
- Further to this, you may even consider partnering with someone who is strong in a related area. For example, if you are a web writer, team up with a website designer to offer your client a finished product. Your partner may also have his own client base, which increases your potential for finding more work.
- On a practical note, don't forget that you have office and other expenses to cover, such as petrol costs, car wear and tear, etc. This will also affect your rates.
Now that you have a good idea of what to charge, you can set about finding clients and retaining them over an extended period. Don't forget to keep these clients as references when you're pitching for another job.
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