How much should I charge my client is an often-asked question.
By Ken Merwin and Steve Canerossi
Congratulations! You decided to quit your day job and become a full-time freelance proposal writer. You have a skill set that is in demand. You have commitments from several prospective clients that want to hire you. They agree that you can help them to win more business. Then, as in all negotiations, the prospective client asks, “what will it cost me?” There is no right or single answer to “how much I should charge” my client. A soon to be proposal writer recently asked Steve and I this question. We provided some insight from our years as proposal professionals that we would like to share with you.
Steve offered this advice:
- In my experience, this involves lots of variables besides years of experience, with no pat answer. Key questions include the level of complexity of the writing, specific skills or knowledge required to do the writing, whether or not the writer formulates and creates original content or simply interviews others, captures their thoughts, and then writes the material.
- Fundamentally, the harder the job, such as relying on your knowledge and skills to create original content the higher the rate, and vice versa. The general range ought to be somewhere from a low of $65/hour to a high of $150/hour.
- Last point. Always allow your clients’ price pain point to drive the discussion unless you are very willing to walk away. This is especially necessary when talking to a new client. I typically offer a new client discount with a clear understanding it is a one-time try to buy arrangement.
I added the following:
- Steve is right. When asked how much should I charge, the answer is always “it depends.” Clients tend to evaluate hourly rates emotionally. If you price too low, then clients suspect you are not that good. If you price too high, clients say “I wish I made that much.” This is where Steve gives great advice about knowing your customer’s pain point. Confirm the rate through market research – seek to learn how much are others with similar skill sets and experience receiving for similar work.
- The biggest negative to an hourly rate is clients have no idea what they are going to pay for your services. One thing to consider, can you charge a fixed price for the work vs. an hourly rate? You need more information about requirements and your ability to deliver within the budget when bidding fixed prices. The pro of fixed price is the client has certainty about what they are buying. The con is that if you underbid, you “lose” money in the form of missed opportunity costs. If you “overbid” on the fixed price, you can always negotiate the scope or explain your value proposition so that you can win the project. That said, I usually charge by the hour, because of project uncertainties. Either way you go, you need to have an hourly rate.
- One way to set your hourly rate is to estimate your desired salary and divide by 1,000. (An $80,000/year salary yields an $80/hour bill rate.) If you bill 1,200-1,400 hours/year, this will get you to the desired salary (after deducting expenses). It will also fairly represent your value.
We hope this helps answer the question, how much should I charge? If you understand your clients’ pain point and do market research, you should be able to arrive at a fair rate that provides you with your desired income. Good luck!