How to determine the value of your work

One of the most difficult decisions of a freelancer is to set a price for their services. If you make a mistake in the price, you will have to pay for a very long time. The wrong price can ultimately lead your business to failure.

There are many different opinions on how exactly a freelancer should calculate the cost of services. Not one of them evaluates a specific situation or specialty of a freelancer. However, there are some general principles, adhering to which, any freelancer will be able to determine what he should demand from customers.

In general, the cost of freelancer services should be based on three factors:

1. Own needs
2. Cost of competitors
3. Market needs

Own needs

The cost of your work should satisfy your needs. Moreover, in addition to personal expenses, this should include an allowance and any expenses associated with the project that you incur. If you have been in the business for a long time, then your rates should be sufficient to cover overhead costs. (Many freelancers forget about the allowance when they start working.)

Overhead includes:

• advertising their services
• Accounting
• office equipment
• software cost
• data storage
• professional education
• health insurance costs
• Holidays and sick leave

Cost of competitors

The price your competitors are asking for the same product or service is another key factor in determining your pricing.
There are a number of resources where you can find out the prices of your competitors, for example:

Freelance income research . Many professional communities conduct periodic income surveys, often containing the income of freelancers. Try to find the latest research relevant to your specialty.

Comparison with earnings of office workers . Human resources and recruitment agencies often update office salaries. You can obtain this information from a human resources specialist or from publications intended for human resources workers.

Competitor Sites. Many freelancers publish the cost of work on their sites. If you use this method to determine the cost of the services of your competitors, do not be too lazy to check more than one site.

A good way to set your own prices, in accordance with competitors, is the golden mean. It is unlikely that you will want to set the price for your services higher than that of a competitor, but you should not underestimate too.

Market needs

Freelance is especially sensitive to the basic principles of the market - supply and demand. If many freelancers offer the same services that are not in demand, prices tend to go down. On the contrary, if there is a great demand for specific services and these services are offered by a small number of people, prices will rise.

As a freelancer, you may have to periodically reevaluate and change the cost of the work to meet the current market situation. Over time, you can even notice certain trends in your field. You can tailor your business model using these trends.

If you find yourself a freelancer in a specialty where the number of offers exceeds demand, perhaps you should think about changing the service offered. Think about providing a range of different but interconnected services that have no counterpart to other freelancers.

Share your pricing strategy

Have you been a freelancer for a while? Share your pricing experience for your services.