What to Charge Small Businesses for Your Freelance Services

What to Charge Small Businesses for Your Freelance Services

31 million small business in the U.S. are underserved and need your help

What does it depend on?

Among other things, it depends on your level of skill, your speed, your ability to sell, what you want or need to earn, what the product/service is, the level of difficulty or irritation, whether it’s a one off project or ongoing work, if it’s urgent or there’s a tight deadline, if there’s an element of sensitivity or expertise involved, the type and size of business that’s paying, what the other person is willing or able to pay, what’s normal in your region.

A word on “insulting”

Less vague is this. Erase any notion of being “insulting” in discussing prices. That is not a thing in the world we are playing in. It’s all a negotiation — with yourself, with potential clients, probably both. Just work on getting used to starting the conversation about services, prices, etc. because that is how you will close sales, get work, and build a client base.

Get good at sales and making proposals

The faster you get comfortable with sales, pitching, and proposing conversations, the faster you’ll be able to easily ask for what you’re worth. You want to get to the point where you can make proposals on the fly. A template for what I call service marketing, one way to build a 100% referral business, goes something like this: 1) “Yes, I can help you with that.” 2) “This is how…” 3) Make a proposal: I can do x in y time for z compensation, and a, b, c, is the process. D, e, and f are some variations you may also want to consider.

The small business market is an excellent place to build a freelance business
Let me say it again: 31 million. 31 million overlooked and underserved businesses. That translates into an endless stream of potential clients for any one writer. We small businesses are not being contacted as often as you’d think by freelancers (rarely, in fact) — and not with compelling offers that speak our language. Fix this and you’re ahead of the minimal proactive competition.

Also, small businesses may not always have lots of work, but we usually have lots of contacts — customers, vendors, other small business owners — and we do tend to talk, swap ideas, and support each other. Ask for testimonials of your work and for referrals, even introductions, to others we may know who need the same kind of help.

Bonus earning secret

Waste not, save everything! Reduce your time but not your fee by reusing, recycling, re-tweaking, and repurposing ideas and content for small businesses in different industries, with different customer bases, and in different geographic areas.

Finally, here are the top ways to think about what to charge small business clients.

Trust your gut

It can be as simple as this. Does the price feel right to you given your circumstances and all the depends? Is it a price that makes you feel good about doing a stellar job? If you’re ever resentful about the amount of time a job takes for money you’re charging, it’s time to look at your prices (assuming you’re in the right line of work).

Refer to industry websites

Refer to industry websites, such as the rates chart of the Editorial Freelancers Association. The rates for a wide range of editorial services, including writing for hire, are fair, flexible, and reasonable and match my personal experience both charging for my work and hiring others for this work. In fact, this chart is especially useful when I hire freelancers for clients. If clients question the numbers, I say, “I hire skilled professionals at rates in line with the Editorial Freelancers Association,” and link to the site.

Ask other freelancers

Ask other freelancers in your area what they charge similar customers for similar jobs. If you don’t know any local writers, turn to those in Facebook or LinkedIn groups for their advice.

Pick a learning rate and grow

If you’re just starting out — as a freelancer, coach, or other type of solopreneur — one idea I love that I’ve heard from others over the years is to pick your learning rate and grow from there. One coach that used this approach started his rate at $50/hour. Every five new clients, he raised his rate $5/hour until he was making the hourly rate that worked for him and matched the going rate in his area. He thought this was an honest way to charge as he sharpened his coaching skills.

Pick an ideal rate and stick with it

Here’s how to find an ideal rate for a sustainable freelance business. A sustainable business is a system that can be easily maintained over time to comfortably provide you with the living you need, working as you wish, while practicing your craft and serving your customers. It gives you the time off you deserve and the money you need to account for the risks of self-employment and the benefits package you’re not getting at a job.

A good first rule of self-employment is to consider that you’ll only be working 20 hours a week at the work itself, 20 billable hours, if you will. Any other time is spent on administrative, marketing, sales, business development, planning, and strategy tasks, i.e., not waiting around worrying about work coming in or not. Then, account for time off for vacation, holidays, sick days, and personal days, which, in this ideal world we’re planning, you’ll be taking and enjoying guilt-free. Let’s make that six weeks off, leaving you 46 weeks a year of working 20 paid hours or 920 billable hours per year.

WooCommerce or Shopify

If you want to make the U.S. median household income of about $67,000 per year, that’s $72.83/hour. But if you imagine a job with insurance, education, and other perks, you might be thinking about a number closer to $91,000 per year, which requires an hourly rate of $98.91/hour.

This is the rough math you should be working with when thinking of an ideal and sustainable freelance business. Adjust the numbers for your needs and geographic region.

Offer a menu

A menu of services with stated flat fees can work well for small businesses who often want zero surprises about what things will cost them.

Hire others

When a potential client has a job that is out of your wheelhouse or below your going rate, it’s helpful to know other freelancers you can hire to do the work for you. Think of employment agencies that charge a month’s salary or more for finding the right person for a firm. Think of temp agencies that charge clients a 50%+ markup on the work of the people they send out. I take a 20% markup on those I hire for others. If this makes you queasy, realize that you are doing both sides a service. You’re doing the client a service by knowing who the right person is to get the job done right at a rate they can afford. You’re doing the freelancer a service by guaranteeing timely payment (yes you are) and handing them work they didn’t have to find on their own while you handle the relationship and communication components. (Note: Once this route is developed to a certain size, you’ll need to issue your contractors 1099s at the end of the year.)

Try sliding-scale rates

Sliding scale fees are prices that vary depending on how much a customer/client earns, what income bracket they fall into, or how much disposable income they have. You’ll find sliding scale fees most often in healthcare, therapy, and counseling fields, where it’s used by some organizations to provide needed and valuable services to all regardless of insurance coverage or ability to pay market rate. It could also work well with small businesses if you’re open to charging flexibly, based on, say, number of employees, annual sales, or another metric.

Use a range of prices and pricing approaches

For myself, I think in terms of a range of prices for a range of consulting, editorial, and project management services and situations. My broad range is $60 to $150 per hour, with most work falling in the $75 to $90 per hour range. Some services I offer are flat fee (e.g., building basic websites for authors) or percentage based (e.g., print brokering). I specifically use a sliding-scale model for coaching to make it available to as many people as possible.

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