We are moving more and more into the “gig economy”, a world where more and more people who are freelancers are always hunting for the next client and that next job.
You can make a good living in the freelance world, but only if you avoid pricing yourself too low. But unfortunately, this is often the case among so many freelancers in an effort to secure that next assignment where there’s so much competition.
If you are a freelancer and have been under pricing yourself to increase your chances of getting that next gig, below is some information about the perils of taking low paying gigs and some things that you can do about it.
The Advantages of Freelancing
Despite the many low-paying gigs associated with being a freelancer, there are actually a lot of advantages of being a freelancer.
For example, you can set your own schedule, search for the kind of work you want, work from home, avoid a lot of office politics and more.
However, the real advantage of being a freelancer should be that you are able to make a decent living for yourself.
Although this area should be at the top of the list, it’s often one of the disadvantages due to the low paying gigs that so many freelancers accept.
The Big challenge for Freelancers
The biggest challenge for most freelancers is that, although they may be very skilled at what they do, there are always other freelancers out there, claiming that they can do what you do at a ridiculously low rate.
How do you cope in an undercutting market? It’s often very difficult to compete with such low ball pricing strategies.
There are even times when freelancers are more apt to take on a low-paying gig right after losing a job – and understandably so. You may need to bridge the gap until you can do better, but this shouldn’t be the norm.
A Special Note to Freelancers
Nobody is going to rush to pay you more than you ask for, of course the client is willing to cut costs where possible.
In the client’s eyes, you are just a resource on the Internet but even so, you are the authority in deciding what rate you need to charge.
They trust you to set an appropriate rate, and if you set a rate that is very low, they may well conclude that you are not very good at what you do; or even worse, they may not feel that you value your services enough to charge adequate rates that are reflective to good quality work.
With the average annual income of entrepreneurs and small business owners ranging between $34,392 to $105,757, it’s important to price your freelance services to reflect the value of your work and livable wages.
Be Clear About What You Need
Figure out how what you need to earn each week beforehand. How many hours can you put towards earning that amount?
Divide that amount by the number of hours, and that’s the minimum pay rate you should be aiming for. And you never, ever want to drop below that rate unless there is a good reason.
Of course you want your prices to be reasonable and not priced so high that you price yourself right out of the market.
But they should be based on practical, livable wages that someone with your expertise should be paid.
That’s why having an understanding of pricing for your industry and knowing what’s too low and what’s too high can be very beneficial from the very beginning.
Be Clear About What You Can Offer
What is your skill level?
Do you have a portfolio of successful projects with which you can impress a new client?
Are you up to date with the latest trends in your field?
Do you have good reviews, and can new clients find and read them?
These are all telltale signs that clients look for before they make decisions about whether or not they should hire you.
For example, if a client receives 100 bids from freelancers and 10 of them offer significantly higher prices than the others, those prices could be justified by having the following:
- Reviews on the websites and social media pages.
Additionally, freelancers who are active on social media platforms and engaged with the latest trends and news also provide a telltale sign that you are involved with and knowledgeable about your industry.
This builds confidence and trust before a potential client even responds to your inquiry.
This is a great way of justifying that you are well worth the price points that you have quoted.
So if you think about it, if a client has to choose between 100 freelancers and only a few of them have a good online presence, that alone will help clients weed out those who have not taken the time to prove themselves and be found online.
Make Yourself Find-able
To stand out from all of the other freelancers, you need to do some things that they may not be willing to do.
For example, you should develop your brand (“as the person who can provide a product or service really well”) and show it off on the best freelance sites.
You can do this by simply setting up a very strong and impressive freelancer profile that is full of defining attributes to build confidence and trust.
It’s a great way to help potential clients weed out freelances whose profiles don’t build confidence and trust.
Competing With Other Freelancers
Now that you have done your homework and are better prepared, you are now equipped to face off with other freelancers who are trying to underbid you. However, here’s what you don’t want to do.
You don’t want to:
- Start doubting and questioning the facts that you’ve learned about pricing in your research.
- Start worrying that you may not measure up to other experts in your field and thus start reducing your prices.
- Fall into the role of an employee-boss relationship with your client, where they dictate all of the terms.
- Avoid making the proper calculations that best justify your price before ever submitting a proposal.
- Working twice as hard and adding so many additional hours that you come close to working at minimum wage and very close to burning out.
To conclude, the biggest take away is believing in yourself. You do good work, right? Therefore, you are worth reasonable pay. You don’t have to apologize for charging a rate that lets you survive, or even thrive.
Going forward, you should implement the suggestions in this guide while also making the proper shifts to your mindset that will prevent you from ever under pricing your freelance services again.