Lesson 1: Determining Your Pricing Strategy
✅ Learning Outcomes:
- Understand various pricing models and when to use them.
- Calculate competitive and sustainable freelance rates.
📘 Content:
1. Common Pricing Models:
- Hourly Rate: Paid based on time worked. Best for long-term or undefined-scope projects.
- Project-Based: Fixed price per deliverable. Ideal for well-scoped tasks (e.g., logo design, website development).
- Retainer Model: Monthly fee for recurring work (e.g., social media management).
- Value-Based Pricing: Pricing based on the value delivered to the client rather than time or scope.
2. How to Set Your Rates:
Use this formula for hourly rates:
(Living Expenses + Business Expenses + Savings + Taxes) ÷ Billable Hours = Minimum Hourly Rate
Then add a margin for profit and market positioning.
3. Factors Influencing Pricing:
- Experience and expertise
- Market demand
- Client size and budget
- Industry standards
4. Pricing Mistakes to Avoid:
- Undercharging to “get started”
- Not accounting for revision time
- Ignoring tax and software expenses
🛠️ Activity:
Calculate your hourly and project-based rates using a guided spreadsheet template (provided). Include:
- Monthly income goal
- Estimated expenses
Desired number of billable hours