Choose the best pricing model
Keeping an open perspective on pricing will benefit you in the long term, especially if your freelance business evolves, or you gain experience and end up not being satisfied with how you’re pricing.
It’s time to converge on all we’ve said in the guide so far about the different pricing models. Each one obviously comes with its own pros and cons and this article is designed to help you easily choose the best one for your business or maybe just for your upcoming project.
Now you’re ready to choose one. To help you out, we’ve out together the top 3 things to keep in mind when making your decision:
Skills and expertise
The pricing model you choose should showcase your skills and expertise as well as your client’s needs.
You’re a world-class professional:
you may be able to charge higher fees with value-based pricing. It's definitely more complex and doesn't apply to every type of project, but it may apply to yours if it directly contributes to a client's profit.
You have less experience:
hourly or project-based pricing may be more appropriate. By pricing per hour, you can be flexible when the client's scope creeps. Whenever your customers request a change in the project's scope, you’ll be paid for the extra time.
Resources required
Urgent projects:
that may require more experience, value-based or project-based pricing may be your best bet. Whenever a project is time-sensitive, there is always the option to pre-define a "rush" rate, which is normally higher than your normal hourly rate.
Long-term projects:
we obviously suggest going for a retainer
Complex projects:
hourly billing may be more appropriate to negotiate a better rate.
Simple projects:
simple and can be completed quickly, you will want to emphasize the fact that you acquired the skills necessary through experience and competency development. If you are able to clearly demonstrate the benefits that your work will bring to your client, value-based pricing may be an option to maximize your profit.
Business goals
Think about your business goals and what you hope to accomplish as a freelancer.
Is freelancing something temporary for you? What’s your vision for your business? Answering these simple questions will help you understand how refined or simple you want your pricing to be.
Using value-based pricing or a retainer encourages collaboration and mutual benefit with clients, so it may be a wise option if you’re looking to build a long-term relationship with them.
"According to data from Paychex, freelancers in the US stay freelancers for an average of 4 years - slightly higher compared to Europe"
If freelancing is just a journey for you, you’re not alone. We highly suggest opting for hourly billing or project-based pricing if you are planning to complete a short-term project and move forward.
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