Have a Base Hourly Rate

This should really be your first step, because this sets a baseline for you to consider when quoting a rate in every other area. Yes, there are times that call for moving the needle up or down. Yes, there are projects that are fun vs. projects that are quite demanding. Having a base rate first, however, will always give you a starting point.

Here are a few questions to ask to come up with this base rate:

• What is your time worth to clients? Consider experience, talent, portfolio of work, testimonials, influence and reach.
• What is your time worth to you? If you are inundated with work, your rate should reflect it. You will need to turn work away, so setting a higher rate will both demonstrate that you are in demand and naturally keep requests for work lower. On the other end, if you have no clients and are actively seeking gigs, a lower rate will encourage more contracts.
• What did you make in the workforce? This can be helpful even if you are doing freelance work in another field. If you felt it was way too low, you can take that into consideration. This was your last salary, and a good barometer of value. You should, however, multiply this amount times two or more to take into account the differences in expenses and benefits between being an employee versus a freelancer.
• How much money do you need? It doesn’t mean you will get it, but consider this when setting your rate. If you need $50 per hour to support your family and still work a reasonable amount of hours, you need to look at whether you can justify that amount. Bottom line, you need to make enough to live off of. And remember when examining this that a much larger chunk of income goes to taxes as a freelancer, not to mention health insurance and other benefits. A good way of calculating this is to figure out how many hours you have available to work. Then figure out how much you need to make per month or year. Divide the amount you need to make by the available hours for that time span.
• What are others offering similar services with similar experience levels charging?

A place to start is Salary.com. Unfortunately, many job titles that would apply to a blogger’s work are not in their database. But poke around and look for a close fit. Here, for example, is what I should make as a web writer:

Again, I would need to adjust that because this is based on salary plus benefits minus extra expenses of being a business person.

Here is what a marketing manager makes closely, probably the closest fit to social media marketing consulting:

To give you an idea of what I am referring to about the difference between employed and self-employed, this is Salary.com’s breakdown of the median salary plus benefits. And this doesn’t take into account the extra expenses of being solo or the extra tax costs:

I would also ask around, or poke around other’s web sites to see what services they offer and what they charge. If someone is a friend, they might consider sharing that information.

My hourly base rate is between $100 and $150 an hour, but it can vary wildly. For example, if you are talking about ad rates, a whole other set of considerations comes into effect: visitors, page views, PageRank, feed subscribers, what is included with the advertising, how targeted or desirable the readership is, and so on. Setting ad rates will be a post for a later date.

If it is something that will intimately connect with your brand (such as being a spokesperson), that has a premium attached to it too because that goes beyond providing advice into sharing a part of who you are.

Setting Rates for Gigs and Projects

This is where things get more complicated. You will need to decide if you always use that rate as a flat rate, or whether it changes depending on the task.

For writing I almost never work on an hourly rate. Almost no publications and sites work that way. It is more typical to have a per word (I typically charge around $1 a word, but I also have 18 years of writing experience) or per project rate. I still take into consideration what my hourly rate is when I set these. I also do a lot of writing for sites with a revenue sharing model because I love getting paid for one article for years and years. That doesn’t even allow for a rate to be set, but you can easily determine after a while that the effort isn’t paying off. It just takes some time to tell.

And when I say writing, I am referring to writing for other sites or publications.

I also once did a per project rate. I still do it on occasion (for example, my SEO Makeover). One reason I do it for that is to make it more attainable to bloggers. I also very clearly bullet out what is included. I have found when I charge per project, some clients require what is planned and expected. Some others will push the envelope, require well above the project’s original plan. Still others simply don’t clearly understand what more they will need.

For that reason, when I quote now I quote an estimate of hours and my hourly rate. It’s somewhat of a hybrid of a project based quote and an hourly quote. It will include a detailed summary of what is included in the rate, as well as a total estimate of the dollar amount. It states how many hours I anticipate the work taking.

I rarely go over that amount, but that is protection in case a client needs much more work done. I don’t agonize over hours or care if I am a little over. If I am getting way over because of multiple revisions, calls, add-ons, I let them know and then it reverts to the hourly rate.

Variables in Setting Freelance Rates

There are so many variables in setting rates that it’s hard to nail them down. So I will talk about some general guidelines. Don’t be afraid to take every gig on a case by case basis, consider your hourly rate, and consider any number of factors for that job before you finalize your rate.

For example, you might consider charging less for a fellow small business person or mom. You might charge more for a task that you are qualified to do, but that is very grueling.

You might charge less for a non-profit. I would say that is always great to do, but also do your homework before you do that. Non-profit does not always equal no money. A great way to research first is to visit GuideStar and examine a non-profit’s IRS 990 form. When you dig down into one, they are required to list all sorts of details about their finances. Find the page with the salaries of their top five employees. If you see six figures there, I would absolutely treat them the same as a company.

So setting a rate obviously isn’t easy. You might find you tweak it or modify it as you go. But I hope this helps give you an idea of how to get started setting a rate.

I would love to hear any suggestions from those of you who have rates set about how you went about it, or any questions from those of you who want to set a freelance rate.

There is also an excellent freelance hourly rate calculator to help you set a rate, or at least see a list of things to consider when calculating it.

_{Photo of money, © Zsuzsanna Kilian}