As a freelancer with many years’ experience in proofreading, translation, and teaching, I sometimes get asked how much I charge for my services.
The question typically comes from friends and acquaintances at various stages of their freelancing journey. One is setting up a proofreading service and wondering what prices to advertise. Another has been teaching English on the side for years and is wondering if they’re underpricing themselves.1 Another friend has been approached for a translation job and is wondering what lump sum to ask for.
My reply: I charge a lot for my services, far above the market rate. Because—after years of trial and error and toiling for little gain—I’ve worked out how much I’m worth.
In today’s newsletter, we’re going to get numerical and philosophical. We’re going to get to the heart of what you do and what value you offer. Whether you’re a freelancer or a full-time-jobber, we’re going to work out how much you’re worth.
Don’t trust the market
When I started out as a freelancer, I did what any resourceful newbie would do: I asked everybody’s friend Google how much others were charging, and—believing myself to be above average—priced myself in the upper end.
The problem with this approach—which only became apparent much later—is that the market collectively tends to underprice itself. Everyone wants more work, and to get more work they have to be priced “competitively” which means they should charge less than the competition, so they lower their price, which means others are now less competitively priced, so they lower their price… on and on in an ever-continuing downward spiral of deflating rates and poverty for all.
For years, I used the market as a guide and put in the hours for moderate pay. Until a set of very fortunate circumstances—which I can’t divulge due to client confidentiality—resulted in me entering a segment of the market where rates were—not double, not triple—but five times what the rest were getting. I was gobsmacked.
One day I was earning what I thought was a small but “good enough” income, what I thought was normal for this line of work. But the next I was earning five times as much for doing the exact same work I was doing before. I hadn’t miraculously gotten better overnight. I was just being paid by someone who valued my work more.
This changed everything.
How much are you worth?
That experience led to a complete overhaul of my pricing approach. I stopped looking to the market. Instead, I began using the high price I was being paid for doing that particular job as a proxy for how much my time was worth. I stopped asking, “What will the market pay?” and started asking, “What are my opportunity costs?” What will it cost me to give up this obscenely well paid job in order to do this other thing instead?
As a result, my rates skyrocketed. And to my surprise, my client base didn’t vanish. As it turned out, there were people out there who valued my service as much as I did. Of course, not everyone is willing to pay the price. But I’m also no longer willing to undervalue my time to cater to what the market will pay.
My new pricing strategy came about by happenstance, but over the years I’ve refined it into a series of questions to ask myself each time I have a new offering to price:
What is my opportunity cost? What will I have to give up in order to do this thing? What am I being paid to do that other thing I’ll have to give up?
What am I offering? What do I offer that the rest of the market don’t? Anyone can say they’re a teacher/manager/writer, but how are they contributing as a teacher/manager/writer? What skills/experience/insight/je ne sais quoi do you bring to the table that others don’t?2
Who do I want to sell to? Who is your target customer? Is it a cash-strapped 20-something, or a 40-year-old executive earning six figures a year?
How good am I at it? This sounds like Question #2 but is actually a different question entirely. You can bring something unique to the table, but still not be very good at it. Maybe you have unmatched language skills. But if this is your first translating job, you’re not going to produce excellent work no matter how much of a language whizz you are. Ask yourself: Is this something you’re a novice at, or a seasoned pro?
How much do I want to work? If you’re happy to put in 60-hour weeks, you can afford to charge a bit less to attract more clients, broaden your base (See Question #3). But if you want a 4-day work week, you’re going to have to charge more per job to make a decent living.
And the most important of all: Would I do it for free? I’m a staunch believer that one should always be financially compensated for their labour, but there are things in life which pay in non-monetary terms. Is this one of those things?
I ask myself these six questions, then use the answers to determine how much I’m worth for that particular task.3
If you’re not a freelancer, you may be thinking these questions aren’t relevant to you. But I’d argue to the contrary. Your salary/company earnings should reflect how much you’re worth, and these six questions can help shed light on that.
What do you think?
There you have it: my no-longer-secret pricing strategy that I hope can help you figure out how much you’re worth. Go ahead and ask yourself the six questions, then let me know:
How much are you worth?
Give me a number if you want to, or simply share what you’ve learned about yourself/what you offer the world from this exercise. Send a reply, leave a comment, share this with someone who’s worth more than they think.
Until next Friday… Stay thoughtful,
Val
Photo by Angèle Kamp on Unsplash
If you’re also wondering, the answer is probably yes.
And if you’re not bringing something unique to the table, you should consider asking yourself if this is something you want to be doing with your life.
In fact, these questions aren’t just useful for pricing decisions. They’re also great for deciding what jobs to choose, which career to pursue, which skill to learn, what endeavour to invest your time in.