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ATD Blog

Ask a Trainer: How Do I Price My Freelance Design Services?

Thursday, July 9, 2020
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Hi Tim,

I’ve been following you over the last few years, and I know you’ve been freelancing for quite some time. I started freelancing fulltime last year, and I’ve been struggling with how to price my services. Should I be charging on an hourly or project basis, and what are the pros and cons of each? If I decide to charge hourly, how much should I be charging?

Please help! I feel like everyone does it differently, and I don’t know which way to go. What tips can you share about how to price my freelance e-learning design services?


Thanks for reaching out and congratulations on making the transition into freelancing fulltime. It’s a huge accomplishment. Like you, when I first started freelancing, I struggled with how to price my services. And you’re right—everyone does it a bit differently, and I know this can be a frustrating answer, especially when you’re trying to figure out what works best for you and your business.

So, how can you create the best pricing model when there are so many variables to consider?

Let me start with the bad news: There is no right way to price your services. Over the years, what I’ve learned is that every freelancer, every project, and every client is unique. Because of this, there is no one-size-fits-all model for how you should price your work and services. You can spend hours searching to figure out how others charge for their work, but that doesn’t mean it’s going to work for you, your projects, and your clients.

So, what’s the good news? Well, it’s that you have the freedom to make it up. Yes, I said that correctly. The answer is that you can price your work and your services any way you want. The real challenge is figuring out what’s going to keep your clients happy and your business profitable.

Here are three practical questions you need to ask yourself, which will help you determine how to price your series.

How Well-Scoped Is the Project?

Asking yourself this first question is important, as it can prevent you from getting into a situation where you’re working for free. Typically, most freelancers start by offering their series at an hourly rate. And this makes sense when you want to ensure you get paid for every hour you work. However, most clients want to control their expenses and are usually working within a strict budget. As a result, they tend to prefer project-based pricing.

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Whether you choose to price your services on an hourly or project basis should be less about you or your clients’ preferences and more about whether or not the scope of the project is well-defined. If the project has a well-defined scope, a project-based fee is safer for your profit margin, as you’re less likely to experience scope-creep. On the other hand, if the total scope of the project is ambiguous, going with an hourly rate may be a safer option.

Are You Contracting Directly With the Client?

This second question can help manage your expectations, especially if you’re working as a subcontractor. When you’re considering how much you should charge for your work, you also need to consider how many other people are “getting a piece of that pie.”

If you’re the sole person contracting directly with the client, this is something you don’t really need to worry about. However, if you’re contributing to the project as a subcontractor (for instance, you’re working through an agency or for another freelancer or company), you should take this into account when pricing your services. Yes, you may have to charge less than you would if you were working directly with the client. However, this loss is usually compensated by not having to juggle every aspect of the project and the client. You’re more likely to be one of multiple subcontractors, contributing in a very specific way.

What’s Your Value?

And finally, here is one that only you can answer for yourself, and it requires a bit of introspection. When you’ve spent decades working in corporate organizations, it can be difficult to rewire your brain to think of yourself as a business trying to achieve a profit margin rather than just an employee receiving an annual salary.

To determine your value, you need to ask yourself and answer:

  • How much do I need to make?
  • How much do I want to make?
  • How much are my services and talents worth?
  • How much value am I bringing to my client?

The answers to these questions are always going to be different, and it’s important that you consider them each time you’re engaging with a new client.

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I hope these tips help. I know these aren’t one-size-fits-all solutions; however, if you can answer these questions, you should be able to make the best decision for you, your business, and your clients.

Best of luck!

Tim



What other tips do you have for pricing freelance services? Share them by commenting below.



Check out the new ATD Ask a Trainer Video Series on YouTube. Each month we’ll publish a new episode in which Tim Slade answers questions submitted via social media.



Do you have a learning question you’d like me to tackle? You can email them to [email protected] Also, visit the Ask a Trainer hub to check out all of your questions and my answers.



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Please note: Content shared in this column is provided by the author and may not reflect the perspectives of ATD.

About the Author

Tim Slade is a speaker, author, award-winning
e-learning designer, and author of The eLearning
Designer’s Handbook.

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