Choosing the best hourly rate for your freelance project is one of the main subjects to master as a freelancer. If you get underpaid, you are leaving money in the table. If you are overpaid you will struggle to keep up.
So what is a good hourly rate? That is the magic question…
Basically a good hourly rate is the highest hourly rate that that a customer is willing to pay you for your service and being satisfied. That would depend on:
- The market you are in: country, city, industry, sector, activity…
- The demand for your services in your market
- How many freelancers are available for the same service you are offering
- How many people recommend your services
- How much previous work you can show (proof of results)
- How good you are doing what you do
- How good your image is perceived by the customer
- How good you can communicate the way you can solve the problem
The golden rule is dictated by supply/demand:
- When there is more demand than supply, your hourly rate will increase because you have more options and your customer has less options, so he will “fight” for your service as he is struggling to find someone to solve his problem.
- When there is more supply than demand (more freelancers available) then your customer has more options and you have less options for contracts, so you will be willing to decrease your hourly rate to compete with the others and be the one who gets the contract.
Where is the money?
Hourly rates can vary so much! I know lawyers charging 250 euro per hour in Amsterdam (Netherlands), or Software developers charging between 60 to 100 euros per hour. There are designers charging 80 euros per hour, others 60 per hour. Video editors from 65 to 80 euro per hour… They are of course experts. In the other side, there are freelance developers selling their services between 15$ to 20$ per hour in other parts of the world. So looking at your geographical market is actually a big part of it, as each geolocation has different expenses.
In the end you will find that setting a good hourly rate will depend on many aspects and is almost unique to you, with your skills, the way you communicate, work, look, the market you are in… but let me give you some hints.
Learn by doing
What I recommend to do is to look at your skill levels and your market, talk with other freelancers and ask for an advice on hourly rate, then try to find a contract within an hourly rate range and see the feedback you are getting. Adjust accordingly as you go, let others bid for your service and keep a pipeline of options, choosing the best one in the end.