By Joseph Ratermann

What’s the one thing holding most freelancers back from earning what they’re worth?

You might think it’s experience , but that’s relative. You might think it’s not putting in enough hours, but that’s comparative. You might think it’s because your employer is a cheapskate, and you might be right. But that’s not everything.

As Adam Green wrote on how to increase your freelance rate, the one thing keeping most freelancers from earning what they’re worth is simple; they don’t ask for it.

One of the most nervewracking parts of freelancing is when it comes down to brass tacks. You have no idea how your new potential client will react to your quote. The temptation is to undercut yourself to ensure you get the job because working for a little money is better always better than not working, right?

Not in this case.

Giving too low of a quote can trap you in a situation in which you’re working, but not able to pay the bills. You get desperate. You take on any work that comes your way despite the low pay because… it’s money. Eventually you get to a place where you’re working yourself thin for what works out to be less than minimum wage, and laughing at how you got into freelancing for the “freedom”.

There are several ways you can ensure you never fall into this black hole. And it begins when you…

Know what to charge

The biggest mistake first time freelancers make when setting their rate is using their old salary as a guideline. Say you made $50,000 at your old job. If you work 8 hours per day for a whole year, minus 2 weeks of vacation, that gives you 2,000 hours. That works out to $25 per hour, right?

Not quite.

You also have to take into account the time it takes to market your services , meet with clients, negotiate , and do all the things that running your own business naturally entails. This could easily take up half of your time.

Plus, businesses who use freelancers are paying for the convenience of having a ready-to-go expert come in who they don’t have to train, pay for benefits , pay for sick leave or vacation , and won’t take up space in their office.

Taking all that into account, freelancers should be charging at least twice what their full time counterparts are charging. How far you can go over this rate is determined by a few other factors:

  • How much experience do you have?
  • How competitive is your field?
  • What are your competitors charging?
  • Are there additional benefits to working with this client?
  • Is this client reliable?
  • Is this a long term project?

Find clients who value your work

I once read a story about a time Henry Ford hired a mechanic to fix one of his machines. The mechanic came in, replaced one of the nuts that had come free, and gave an invoice for $100. When Henry Ford got the bill he was furious, “How can one nut cost $100?” So the mechanic submitted a new invoice listing $1.00 for the nut, and $99 for “knowing where to put it”. Henry Ford paid the bill, or so the story goes.

Believe it or not, some businesses simply don’t understand the value of expertise. They think a team of monkeys could do your job, but they can’t find enough cheap monkeys.

These are the guys who advertise on certain freelance job boards looking for web developers fluent in a dozen programming languages willing to custom build a fully responsive site for less than $500.

These people don’t value your time or your abilities.

The best clients are the ones who regularly work with freelancers. They not only know how to work with you, but they know the value of your work , and are willing to adequately compensate you for it. The very best clients are the ones with whom you can establish a long term working relationship, and give you a consistent stream of work.

Just like any good relationship, a working relationship is a two way street. Before getting too involved with a company, ask them who they’ve worked with before. Why did their previous freelancers leave?

If they have the right to ask you for references, you have the same right to ask them about their previous working relationships.

Quote on projects, not on hours

Just like Henry Ford in the previous story, most people understand time as money. If the mechanic had struggled a bit, and taken some time before finally figuring out the solution, Henry would have been more satisfied with the bill, but the result would have been the same.

Your time is a finite resource, once it’s gone you can never get it back. It doesn’t make sense to trade time for money, because there’s a limit to how much you can earn. You can never get more time.

Also, you’re incentivized to be less efficient in order to use more ‘client time’ and make more money. This is the wrong approach. If you quote on a project fee you’re incentivized to be more efficient, and can take on more projects.

If you have a project that your client expects will take 3 hours and will pay $150 for, there’s no reason that you can’t knock it out in 45 minutes, as long as you keep up the quality. As long as the client is satisfied, the results are the same. However, one way lets you earn more.

Stick to your guns

One of the most powerful weapons we have as freelancers is the ability to say ‘no’. It’s the whole reason we quit that 9 - 5 job working for that jerk of a boss in the first place. And it’s all wasted if you’re too chicken to pull the trigger.

If the project you’re working on suffers from “mission creep”, an ever expanding scope with no additional payment, you have the ability to say, “Not now chief, I’m busy.”

If a new potential client asks you to do a project on spec saying, “We can’t pay you now, but if you do a good job, we’ll have more paid work for you in the future.” You can, and should, tell them to find another guy (or gal).

Working for “experience” or a “great portfolio piece” doesn’t pay the rent.

Saying ‘no’ puts you in control. You can work for the projects you like that pay you what you are worth. You can avoid working for people who don’t value your time or work, and avoid the black hole of stress , overwork, and underpayment that results from taking on jobs that pay too little.

In the end

You have to be bold enough to ask for what you’re worth.

Many people will say no, but if you get enough no’s, eventually you’ll get a yes. Once you do, you’ll have set a precedent with yourself. You’ll know that it’s possible to ask for and receive the kind of money you know you should be earning, and once you do you’ll wonder why you ever doubted yourself in the first place.


Joseph Ratermann is an American freelance writer based in Berlin, Germany, where he runs the site www.freelanceabroad.com. You can see more about him on his website www.josephratermann.com.