Freelance: how to set your prices

Freelance: how to set your prices

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Getting started in the world of entrepreneurship involves setting your own prices. They are generally hourly or daily, but can sometimes take the form of a fixed price for a service. But what prices should you apply? What should you consider when setting your rates? We have listed for you all the information you need to know to set your rates as a freelancer.

Carry out a market study

Before thinking about the prices you want to set for your services, it is important to carry out a market study. It will allow you to know the sector in which you want to get started, and thus to have a first idea of ​​the rates applied for similar services.

First of all, consider identifying your direct competitors, and looking in detail at what services they offer, but also where they are located. It is only after having defined those who are closest to you (both geographically and in terms of the services offered) that you should observe their prices. Please note that these are only indicators to help you get an idea of ​​the prices generally applied on the market. Don’t limit yourself to this if you feel your services stand out and require a lower or higher price.

Calculate expenses to cover

There are a number of recurring expenses to anticipate as a freelancer. You must identify these, to take them into account in your pricing. Indeed, if you forget to record certain recurring expenses, you risk not invoicing enough, and thus losing money.

The main expenses that you must identify are the following: taxes, social contributions, insurance, Internet, telephone, possible rent, purchase of equipment, training, travel, accommodation… There are a multitude of them, and they vary according to the services you offer. . Once you have defined a precise list, quantify these expenses, to have an idea of ​​the costs that you will have to reimburse before receiving the money that will go into your pocket.

Discover the best invoicing tools

Factors to consider when setting prices

Once the market study and the calculation of expenses have been carried out, you still have to define your added value and your customer references to set your prices. You will therefore have to judge your own experience, to know where to position yourself in the market prices. Customer references (if you have any) bring credibility to your services, and can therefore allow you to increase your notoriety and your prices. Remember to put them forward, they can justify prices that are sometimes higher than the average.

Do not hesitate to enhance the elements that make you unique, what makes your originality. All these differentiating criteria will allow you to set higher prices, but also to convince your prospects.

Daily rate, hourly rate or flat rate?

To invoice your services, there are 3 different methods: the hourly rate, the daily rate and the flat rate.

Hourly rate

This method allows you to calculate the price of a service based on the number of hours required to perform it. It is recommended for freelancers who can easily estimate the number of hours needed to complete a mission. You can calculate your hourly rate simply, thanks to these steps:

  • Define the monthly net salary you would like to receive,
  • Add the amount of expenses that you calculated beforehand,
  • Divide this amount by the number of hours worked during the month.

The result obtained corresponds to your hourly rate. Nevertheless, there are a few elements to take into consideration, the paid vacation system does not exist for freelancers, consider adding a small percentage to your remuneration to compensate.

Daily tax

The daily rate defines the rate you want to charge for a day of work, without mentioning a specific number of hours. It is thus more suitable for projects that are complicated to quantify in hourly volume, or for recurring day-to-day missions. If you need flexibility in your daily life, and the majority of your projects are substantial and take 100% of your time when you work on them, prefer the daily rate to set your rates.

Package

It is also possible to use a fixed pricing system for certain deliverables. You will be able to set a single amount for an exact service, regardless of the number of hours or days you spend on the project. Please note, to use this type of pricing, it is still advisable to have a fairly precise idea of ​​the number of hours required, because if you need twice as much time as expected, you risk not not find you there financially.

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