- Erin Neilson
Practical Pricing Advice for Calligraphers & Live Event Artists
If you're a freelancer, determining the correct price for your services can be difficult. It's easy to underestimate the value of your work, and charge too little to cover your expenses. But don't worry, this post is here to help you figure out a pricing strategy for your freelance business!
Working Backwards
When it comes to pricing, it's helpful to think backwards. First, figure out your average yearly expenses (this is literally everything from the cost of your website to the paper you use in your workspace) and the amount of time you can commit to your business. (I like to think of my time in two ways: IN my business vs ON my business. IN the business is anything to do with actual paid client work - ON the business is everything else) Then, calculate the average price per contract you'll need to cover your expenses, reinvestment, taxes, vacations or other leisure activities. Once you figure out this bare minimum, you'll have a much clearer understanding of how much you should be charging
*hint* most people aren't charging enough!
Here is an example of what I mean:
If you need a minimum of 20k per year to run your business (supplies, marketing, etc), and you have 20hrs on average a week to be IN your business, and you take 3 weeks off a year for vacation you have 980 hours per year to make money. (49 weeks x 20 hours = 980 hours a year)
You also might need 10k to reinvest every year (for courses, materials, advertising, etc) and then maybe another 10k for taxes, and then at least 25k profit so you're not just breaking even - you can pay your regular bills, go on vacation, and maybe save a little . You actually need to make 75k/year in those 980 hours (This would average to around $75/hour ($75000/980 = ~$75) ... but wait! There's more nuance to this!)
From there, you would need to work out the average about of time it takes you to do each project, live event, whatever revenue streams you have.
Ex: On Sites are typically 5 hours on site, but before you're on site there is other time that you a re working you need to take into account. There is preparation time, administrative time, communication with the brand practice for the event, etc. All of a sudden that 5 hour contract is 15 hours total!
To truly understand your pricing you should do this exercise for every revenue stream you have, using the average time it takes you to do a project
Ex:
On Site Work : 15 hours
typically there are only so many on sites that exist every year. Maybe 30 if you're in a high volume area? So 30x15 hours = 450 hours
In Studio Work : 20 hours
In studio work? Maybe.. 10? So 10x20 hours = 200 hours
In Person Teaching (per student) : 30 hours
Teaching 10 students privately at 30hrs each is 10x30 hours = 300 hours
Total Hours: 950 | If your total revenue stream hours are less than how much time you have in the year (980 like I mentioned above), you're in a great spot! That means if you need extra time for a project, you have that wiggle room
Now that you know the breakdown of hours per revenue stream, don't forget the math we did above! 75k divided by 980 hours is around 75$ per hour. Let's see what that looks like for each revenue stream for each individual client
i. On Site work
15 hours of complete work x 75 $ = 1125 $ (You would charge the client for 5 hours on site though, so this means you'd charge a minimum of $225/hr (1125/5 = 225))
ii. In Studio work
20 hours of complete work x 75 $ = 1500 $. This means that you should charge on average $1500 for every in studio project you take on
iii. In Person teaching
30 hours of teaching x 75$ = $2250. This means every private student you teach should be charged on average $2250
You can play with these numbers of course, decide you want to charge students less, and on site clients more - it's your business after all and the sky is the limit! But this is a good way to understand more completely where your pricing is coming from (and don't be afraid to give your self a raise!)
Edit: If you sign up for my email newsletter, your welcome email will include a link to my spreadsheet calculator to help you out!
Don't Undervalue Yourself
When you're charging for your services, you must remember that you're a professional and should be paid professional rates. It's much harder to raise prices in the future, especially with returning clients who will be your bread and butter in the business (I highly recommend checking out the 80/20 rule, also known as the 'Pareto Principle' - basically that 80% of your income will come from 20% of your clientele).
Charging Low to 'Get Experience'
When you charge too low and undervalue yourself, you may be inadvertently undercutting other experienced freelancers - as many contracts are acquired through referrals, you may be burning future bridges within your network.
Perceived Value
Do you want people to choose you for being inexpensive, or for the quality of your work? If your work is significantly lower than the market you may be perceived as cheap. This can invite the dreaded 'price shoppers' to reach out to you, or who I refer to as 'energy vampires'
Stay Informed
Having knowledge about your business and understanding what you could lose by giving discounts will make it easier to say no to clients who expect you to lower your prices. Have the courage to stick to your pricing!
Ideal Client vs Dream Client
It's important to identify your ideal client because it can help you with your marketing approach. Remember, it's ok to let go of leads that aren't a good fit for you. You deserve to work with a client who values your service!
If your 'dream client' finds your services too expensive, I would argue they aren't your 'ideal client'. If this happens, you can explain the value of your services and offer alternative solutions if necessary. But don't be afraid to say "no" if it's not the right fit for you.
When to adjust your pricing
I personally decide to adjust my pricing up if I am consistently booking more than 50% of my leads. What will usually happens is that I will have less clients, yes (some will drop off naturally), but my income will usually stay the same. What I gain with less clients is more TIME, and time is the most valuable resource we have. I can use this now freed up time to spend time away with my family, to work pro bono, or decide to focus on getting that next big project off of the group .You can't do that when you are working 80+ hours a week.
Conversely, if you're not booking 40%-50% of your leads, then I would suggest looking inwards and self reflecting on what you could improve on - there may be a mismatch in your marketing (ie the photos of your work, the captions on your post, the SEO on your website), perhaps your price is too high and there is a perceived value issue (ie the client can't understand why your price is so high compared to the services you are offering), or maybe you don't know enough about your ideal client to know when, how and where you should be trying to speak to them.
Self reflection is incredibly important!
My Personal Transparency
It's important to recognize my privilege after reading all of this - I have a significant safety net because my husband has a stable and well paying job, we don't have children, and we live below our means. This means that if I don't get a contract from a lead, we're not missing a bill payment. Not everyone has the same situation. Please, only apply the most practical advice from this post!
Conclusion
Pricing your services can be tricky, but it is essential to not undervalue yourself. Thinking backwards, understanding your value, and being informed can help you trust your pricing. Identifying your ideal client will help you make better decisions. With the right pricing strategy, you can enjoy the benefits of a successful freelance career!
