Setting or increasing design rates can be confusing, and many people send freelance invoices that sell themselves short for fear of losing clients. In fact, last year Foundr reported that the average freelancer billed for 30 hours per week, at $19 per hour. But is that really enough?
Creating a graphic design or web design price list that earns you what you really need is a vital step, and we are determined to help you out. Now, follow these five steps to get better freelance design rates.
Thanks to our friends at Bonsai for sharing their expert insights in this article!
1. Calculate your minimum freelance rate
First of all, ask yourself what you want to make. Let’s say an ambitious, yet realistic, $100,000 per year.
Freelance life involves software subscriptions, rent, and accounting fees. Consider adding expenses like overhead of $20,000 and insurance / benefits for $12,000. That means you’re looking at a total annual amount of $132,000.
Now, let’s say your freelance time-tracking app reports 1,800 hours worked each year. Or 225 eight-hour workdays. You’ll want your web or graphic design rate to be at least $73 per hour ($132,000 / 1,800 hours).
This is almost four times more than what the average freelancer charged in 2018. Therefore, calculating freelance rates that account for all your expenses is key.
2. Benchmark your rates against the market
Get into the habit of doing a little research on your market every few months and look at:
- Published rates in different freelance marketplaces
- Pricing studies and blog posts
- Asking your friends and network
You can use such information for guidance when increasing your design rates. In adequate cases, you can even consider letting your clients know how much other freelance designers are charging.
3. Plan your design rate increases
Many designers fear that when they raise their rates, clients will simply ditch them for someone cheaper.
To steadily grow your income while retaining clients on a long-term basis, apply moderate raises. A small increase will be way easier for clients to adjust to than a massive 20-30% hike.
Also, plan your rate changes for the same time each year. People will come to expect it, and will likely be more receptive. You can also use Bonsai to do this for you. By signing up, you can set up your contracts to be automatically sent to your clients on a specific date. How easy is that!
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4. Consider rewarding loyal clients
Some long-term clients might deserve a different approach when raising your freelance web or graphic design rates. Depending on the situation and type of work you do with them, you may want to consider a discount for consistent retainer work, while still baking in flexibility to grow your prices over time.
5. Give plenty of notice
Instead of demanding an immediate increase, pick up the phone and let your clients know ahead of time. If that’s not possible, you can email them about the upcoming changes. Something like:
"Hi Mike, I’m updating my web design pricing list, leading to $80 per hour starting September 1, 2019. I wanted to give you plenty of notice. Happy to chat about this more over the phone or in person. I look forward to continuing to work together in the future!"
This gives people some time to consider how this will impact their budget and ensures they don’t feel pressured.
Pro Tip: It’s a good idea to include a clause in your freelance design contract that reserves the right to renegotiate your rates after a certain period of time.
Don’t overthink your freelance design rates
Many people set low freelance graphic design rates early in their career, just to get the first few clients. They then make the mistake of sticking with that rate or only applying gradual increases every few years. However, down the line, take time to assess your earnings, and consider if it reflects your true value, and covers your lifestyle.
By calculating all your expenses, and your billable hours, you can set freelance rates you’ll truly be happy with.
Remember that raising your rates isn’t a betrayal of existing clients. While one or two may balk at the thought, most will understand this is a business. If you do things in a professional way, you’ll end up with great clients who pay you your worth.
Ready to start raising your freelance design rates? Sign up with Bonsai to help you manage your finances and invoice clients with ease.
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