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I am a front-end and Wordpress developer and after a while of undercharging to attract customers, I am ready to raise my rate.

As a freelancer, how can I determine what I should charge clients? What should I take into consideration?

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    Hi Tyler, welcome to Freelancing SE. We can't really tell you what the market rate is as it just depends, so I edited your question to focus on how to determine rates, which will be more useful now as well as in the future when trends change. Hope this helps! :) – jmort253 Aug 9 '13 at 4:57
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As a freelancer, how can I determine what I should charge clients?

One easy way it to shop around - do some market research. What do other freelancers in your area (profession, location and similar circumstances) charge? You will get a range of rates from people, which should give you a good starting point to position yourself and your rates.

What should I take into consideration?

You need to consider your expenses and overheads - everything that you pay out in order to complete a job. This, divided by the amount of time you estimate a job to take, will give you a estimated break-even rate - a rate that will end up with no profits or liabilities (assuming your estimates are correct). This is your rock bottom rate - possibly a rate to attract customers with, but not a long term rate that you can profit from.

At this point, you need to figure out how much of a profit you want / can make, taking into consideration the current rates you got from your market research.

Position yourself too low and you will get customers but no profit.

Position yourself too high and you will not get many customers, but you will get high profit for each. This is risky, as you may not get any customers and those you get may look elsewhere.

Position yourself somewhere in the middle, where you can both get happy customers and get a healthy profit.

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If you were to sell a widget, the floor selling price would be calculated as:

minimum selling price = cost to manufacture + required profit

where

cost to manufacture = unit manufacturing cost + proportion of fixed overhead costs

where the total of fixed overhead costs are amortised across all manufactured widgets.

Delivery and transport (etc) are then added on top, as a separate line item.

Update: See also the excellent blog article by Christopher Penn, titled "How to set your consultant billing rate" identified by @jmorte253 on Meta


Pricing up the provision of services is exactly the same... you need to know the fixed costs of running your business, and the unit cost of producing each widget (webpage, website, hour-of-consultancy) etc

And expenses incurred get added as disbursements (with or without a markup as agreed)


The trick is setting your prices so that your required profit at a level that you are happy with, and at a price that the customer is happy with.

If you set your profit too high, or your overheads are too high, or your unit costs are too high you will lose out!

There is no definitive answer to the question, though, as individual circumstances (of supplier or customer) will affect the prices.

Note: although the question is tagged as there are other pricing models available for website development. Certainly I would expect website design to be more with support extra, but that's opinion!

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It depends whether you work from home with minimum costs or you rent office.

If you work from home, then just use the average rate from the freelacing website you use. Every freelancing site has such statistics. If you're just starting, then set the price form the lower side of the average and increase it with time and experience.

If you rent an office, then you must first calculate ALL costs you have. Then divide it to 160 and you will get the minimum price that you can work without ending up in the minus.

After that, compare this price with the average price of your freelancing site. This will also help you realize if that freelancing website is good for your or not. In the end, add your profit to this hourly price. Profit can be set randomly or by dividing your desired monthly salary by 160.

Also keep in mind that in the beginning you will not work full time, so while you gain some experience, double your minimum price to maximase the chance for not ending up in the minus.

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    Can you expand on how you come up with 160, for those users who won't understand? – Canadian Luke REINSTATE MONICA Aug 12 '13 at 16:42
  • There are 160 work hours in a regular work month (5 days per week X 8 hours X 4 weeks per month). – Dzhuneyt Aug 15 '13 at 10:30
  • @CanadianLuke WordpressDeveloper said it right. It is true that there are 22 work days in a month as average so you can count 22x8 to get more accurate work hours. But somehow 160 hours per month is used by many people and it's much easier to count against half-month and weekly limit. In the similar manner, the annual number of work hours is 2000 - again the value not completely accurate for every year, but it's easy to count against it. – Peter MV Aug 16 '13 at 7:24
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I consider few following factors when giving my rates.

  • Type of Client (Wealthy clients or Economical clients)
  • Level of your work
  • Also it depends on your previous customer/client satisfaction rate
  • Have someone recommended them your work
  • How much knowledge do they have about WordPress/Development
  • Can they easily elaborate their requirements (I had a very bad experience with an American Model and each time she called, she have some new requirements/specs)

If i get a wealthy client and good multinational product then i charge almost 25 to 30% more than my original rate. Also when someone comes to you with some of your old client reference, they are likely to get work done from you so you can add like 100$ extra to their invoice.

Also give them few options if they think that your rate/invoice is higher than their expectation Few extra options for your clients are below:

  • I will maintain/fix your blog errors free for next 3 months
  • I Will secure your blog for free
  • I will optimize its database for free
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Charge your clients based on the value you provide. If you're building a WordPress site, ask yourself and your client why. What are they hoping to get out of it? Do they want more leads? More people to walk through their door? And that naturally leads to the value you provide - how much are five more leads per month worth to them?

Further reading: How Your Clients Perceive Value

And you really ought to read Double Your Freelancing Rate - that book totally changed my perspective on freelancing and how clients value our services.

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