The following points will help you determine what price you should set for your freelancing services.
1. Your skillset and proficiency: There are many ways to look at this, for starters if you are starting out you may charge less and as you become proficient in the field you can charge more. The other way to look at this is you may charge more when you start out and use some portion to update your skills. You can give back free extra time back to the customer in such case. If you quote more hours for the work you may not win the projects, so a prudent approach would be to charge like your peers and convey to the customer that you will use some extra hours at no charge. Once again this approach has backfired for some freelancers when they used this in time sensitive projects. The proficiency you have at the subject matter to get the job done will determine how fast and efficient you will get the job done. We have seen some freelancers do a quick job and use the rest of the time to hone their skills even further and some who will pass back the free hours to the clients for an extra free job. There are those who struggle to finish their job in time due to lack of proepr skillset. So your price should account for your skillset or the lack of it.
2.Cost you incur for providing the service: This is one main point where freelancers make major mistakes. You should include the cost for the softwares and tools you use. You should add the cost of time saving equipments you use to get the job done. Dont forget the time it takes to find jobs and do the write ups and communications you have with your client. Do you have a fax line available for the clients to use, dont forget to add a portion of that cost to each project. Also inclue all your advertisement costs and stationary expenses. The point is you should price your service so that you will get back all the costs you incur for running this freelancing business. Now last but not the least try to add the profit factor slowly but surely. Some folks tend to offer discount to make their clients repeat customers.
3. Your Experience: Although covered a bit in the skillset portion this is a critical factor to add a premium on your service. The more proper you have the less likely you will add hidden costs to the client like a buggy software. Or you may use techniques and suggest ways which worked for others efficiently. These the novice would have to wait to slowly add this premium. Now you have to consider the experience the client will have with your service. Are you providing constant updates? Are you available through instant messages? Are you providing guarantees and free updates if errors are found later? These and many more you add as you gain experience can help you increase your price.
4. The Market Factor: Well anyone in any business understands the concept of supply and demand and its affect the price as well. if you are offering service in a flooded market with no differentiation and obtaining clients is very difficult you should think about pricing your service to win more customers. In places where there are more clients you should price the service a bit more. As part of this you should find the price others charge in your market segment. This should then be combined with the exposure your business gets and the price should be set according to the market demands. As always try to diversify and expand your services while constantly getting yourself up to date in your core competency.
5.Flexible pricing: Although having fixed rates help keep things simple, it is always good to plan for flexible rates. Study the needs of your client do they want more to be done in a short duration and can have tradeoffs in quality. Or they want perfect results and time is not a main factor. If you provide price per hour you should consider the above in your pricing strategy. Also the other factor you want to consider is your current workload and create a way to increase your price when you have more work, this may help motivate you as well get more money for your business. Or this can help keep away the smaller projects which may distract you from the major projects you are handling.
There are many more smaller points one should consider while pricing but we thought the above five main factors can help you price your service.