Is Your Hourly Rate Holding You Back?

Do you charge hourly for your freelance work?

(Hi, hello, we are getting into some nitty gritty pricing stuff this week. Strap in!)

As the saying goes, there is more than one way to pet a cat,

(Yes, I know that isn’t the right saying, but I think this one is better and way less violent)

But this week, I wanted to share some of my thoughts about hourly pricing for freelance projects — and explain why I personally have been moving away from this pricing system for my own business.

Let’s get into it!

It all started with a conversation

A little while ago, I was talking to my freelance friends,

(Hi @mel and @shan!)

About pricing freelance projects and how we have changed our approaches as our businesses have grown and expanded.

And, while every conversation I have with these wonderful women is always empowering and hilarious,

This particular convo about hourly pricing vs. set fee rates gave me a lot of food for thought regarding how I go about pricing my own work with existing and new clients.

For those of you who don’t know, I started my freelance career on Upwork, a job board website that heavily encourages freelancers to price their work at an hourly rate.

(I started on the platform in 2020 with an hourly rate of $35/hour, because that was how much I was making as a newly graduated nurse at the time!)

So, by default, I got used to thinking and talking about my work in the context of money per hour of work.

And now, 4+ years into my business, I am starting to rethink this strategy.

A brief caveat

I do not regret starting my business with hourly rates or using a freelance platform like Upwork.

As a brand new freelancer who was just excited to land my first real paying client for my services,

This approach and this platform gave me the tools I needed to cut my teeth and learn all about the wonders of charging money for my work.

(It also taught me not to do work for free, which is a huge barrier for women entrepreneurs, especially in the early days).

But, that being said, as I have matured in my business, I have identified that there are other,

(And arguably, significantly better)

Ways to price my services and ensure that I actually charge my worth.

(Now, back to the good stuff!)

Hourly rates leave money on the table

Hourly work is an easy pricing strategy to fall into because it is simple and easy to understand.

Hours of work = hours of pay

(Truly, this is a simple equation to make sense of pricing, regardless of your business experience).

The issue lies in the fact that, for more freelancers,

(Myself included),

Hours of paid work ≠ hours of total work on a project

And that leads to a lot of unaccounted for work and effort not being properly compensated for.

If you are anything like me, then the work you do on client projects is not as simple as sitting down for a set number of hours to write, edit, and send off the deliverable.

On any given project, I spend upwards of 5+ “non-working” hours planning, thinking about, and organizing my day around getting the needed work done.

And yet, with hourly pricing, that time,

(And my years of experience and knowledge in the particular field)

Aren’t properly factored into the final project cost.

(Yes, I am aware that charging more hours or upping your hourly rate can help accommodate for these things — but, speaking from experience, actually increasing your hourly rates or charging more hours on a project is way harder than it sounds).

So, through meeting more experienced freelance writers,

I’ve recently been experimenting with set-cost pricing for my projects instead,

And I have to say — I don’t know if I will ever go back.

My new pricing strategy

Instead of laying out my cost per hour for clients and feeling like I need to track every minute of work to optimize my earnings, I have been leading with set project fees instead.

For example:

Instead of telling clients,

“My hourly rate is $125/hour, and this will be a 5-hour project,”

I have been changing my wording to:

“I charge $1500 for an ad campaign of this size. When would you like to get started?”

(It’s a minor difference, but removing the mention of hourly rate from the conversation altogether has changed my business interactions with my clients for the better on all fronts).

Behind the scenes, of course I have done the math to figure out how many hours I expect the project to take — but I also am always sure to add a buffer to my fee amounts to cover the time that I used to not correctly charge for.

(And honestly, I cannot recommend this enough — it has made my working process so much less stressful!)

You deserve to be paid well for your work

Now, for some of you, this email may not be anything new.

(And if that is the case, awesome for you!)

But, I wanted to talk about this topic this week because I know that pricing is a sensitive topic for a lot of freelancers,

(Especially female entrepreneurs, because we are often shamed for talking about money or wanting to increase our rates or income).

There is no right or wrong way to price your services — but I hope this email helps you rethink the way you approach pricing your time, experience, and knowledge.

We all deserve to be compensated correctly for our work — all of our work — and changing over to set fee rates has been a helpful tool for me to better advocate for myself as a business owner.

So, how do you currently charge for your freelance services? Reply to this email and let me know. I reply to every email I get back!

Until next week,