What are the best practices for setting a price for freelance work?

It is your time, therefore you decide how much do you value it. If the client thinks the cost is worth the product quality, he will pay for it. The worst thing that can happen is that you will lose the client. I've started my career using http://freelancer.com earning less than USD 100 a day. However, it turned out that I am by far better and reliable that the alternatives. I had roughly 10 companies that I contracted to regularly, working 20 hours a day. In just a year, not being able to cope with the workload, I've (gradually) raised my rate to somewhat USD 900 a day. I've lost most of the clients, but just a few support me very well & I know that if I would double the rate, they would very likely keep me. Market rates give you a good idea as to what rates you should seek for, but at the end it all comes down to how much you value your time and how much others are willing to pay for it.

One of the things I always advise freelancers to bake into any pitch is the value you are going to provide. Sure, there are market averages but ultimately you will be commissioned on the basis that you will deliver an upside - a desirable goal for your client. What does that upside bring them in terms of new opportunity? Can that upside be made explicit? Does it have a $ value? If you are providing a service which will enable your client to generate an extra $10k profit your 'product' is worth whatever the client is comfortable with up to that number. This is the key to driving your rate upwards so it makes sense to start with this mentality. Hope that helps!

It's better to start high, especially if you already have many project offers (which it sounds like you have). Straight out of school, no experience, I started charging $50 an hour to program websites and make logos. No one had a problem with it. Then make sure you raise your rate every year (I raised my rate 20% after the first year). If you think you have a lot of referrals and projects, set it even higher! Just act professional and do the work on time. If you provide excellent customer service, people will pay to work with you. Your work can be mediocre but if you deliver on time, have an excellent friendly attitude and answer all questions and correspondence in a timely manner, they will keep coming back. The number one reason why most of my clients stopped working with their previous freelancer was because they could never get a hold of them, so I always make sure that I am reliable and available. Always write out a contract and have them sign it (I use echosign.com for easy online signatures--I quickly found out that bothering with Acrobat and scanning and faxing was not working out). Always demand some payment upfront. I usually ask 50% upfront, then 50% after the work is done. If it's a big long project, do it in phases (example: 30% upfront, 30% after this milestone, 30% after completion). If you go with an hourly rate, estimate how much time it will take you, then double it or triple it. That's your actual estimate. If you go with a project-based fee, make sure to define the scope in the contract (exactly what material you will do, how many revisions and edits they get, does it include stock photography and content consultation?) and write in that any out-of-scope work will be billed at your hourly rate.

I recommend using this calculator http://freelanceswitch.com/rates/ just to have an idea about pricing.

I talk about pricing in a free video series I created for freelancers. The link is http://www.udemy.com/how-to-freelance-for-mobile-developers/ and while it was originally pegged for mobile dev's there are still some info you may find quite relevant and useful.

In order to not lose out on high quality projects due to over/undercharging one of the most important practices should be to check what your peers are charging across functional categories and experience levels in your industry/area of expertise.One of the ways you could do this is by using Flexing It's fee benchmarking tool for the independent consulting community, FeeBee.http://www.flexingit.com/ is a curated marketplace that connects organisations to professionals and expertise on an 'on demand' basis for projects, consulting assignments, advisory roles and part-time resource needs.Check it out here: http://www.flexingit.com/accounts/register/individual/marketing/

My answer is more closely related to web design (or really any project that has a lot of associated sub-tasks included) but I think it should be helpful.At LUMINUS we used to price everything out hourly. We figured the client would dig the transparency and we would ensure that we'd get paid for every hour we worked (which is like, the hardest thing sometimes when you want to make something good against all odds). But that just meant that every single task, even essential ones like "Home Page," became objects of negotiation. Worst case, the client would insist on cutting or skimping on these essential elements and then demand that we include them halfway through the process. Once we were a little bit more established and had a nice portfolio to lean on, we pivoted over to value-based pricing (as http://www.businessology.biz/show/value-pricing/, who we love). Basically, we would estimate how many hours we thought a project would take and charge that, without all the line items and transparency.If the client really trusted us, this worked great. But that's not always the case, and we spent a lot of time defending our prices, often underquoting anyway just to win the bid (we were still young, after all). We also experimented a bit with collaborative pricing as described by http://www.seesparkbox.com/. Basically, you share a spreadsheet with the client that lists out all the elements of a project, and you both have access to add and subtract hour commitments to those tasks.That only really works, however, with a retainer client who really trusts you. There are too many trust-humps to get over for your run-of-the-mill new project.So, long story short: we came up with our own pricing model that took elements from each of these approaches and synthesized them into something that could work for an agency our size.We called it Golden Mean Pricing because it's based on finding an acceptable middle between hourly pricing (which is often a race to the bottom with a client) and value-based pricing (which can lead to expensive projects that many clients won't go for). It lets you calculate the value you need to make the project worth it for you, pad your hours a bit to protect your bottom line, and then come up with a quote your client will go for.If you're interested, we wrote a free https://www.luminusmedia.com/golden-mean-pricing. It comes with a handy calculator you can use to apply the system to your project. You can't necessarily tie something as amorphous as project pricing to a concrete formula, but it comes pretty close.Cheers!

Setting a rate for your freelance work is likely one of the tougher parts of working as a freelancer. When determining how much to charge, you'll need to decide whether to charge based on the hour or based on a set project cost that you quote at the outset. With either method you should decide what your hourly rate will be, and then either charge per hour or use it to calculate your set project fee. When determining your hourly rate, be sure to take into account the expenses that you need to cover as a small business owner (self-employment tax, equipment, utility costs of working from home, etc). Also, keep in mind industry standards, additional resources that you'll need for the project, and any pricing exceptions that you are willing to make (for example, if you really want to work with a certain client you may choose to bid lower to get it). This blog post from Bench Accounting (I work at Bench) lays all of this out in more detail: https://bench.co/blog/setting-the-right-freelance-rate/ I hope this helps! [Full Disclosure: I work as a marketing intern at Bench Accounting]