💼 Category · Freelancing & Services
Price your work without underselling: a 5-step method
Underpricing is the most common — and most costly — beginner mistake. It attracts the wrong clients, burns you out, and traps you under a glass ceiling. Here’s a five-step method to set fair rates and raise them without losing clients.
In this guide
A rate isn’t a judgement on your human worth: it’s a number that must cover your costs, your non-billable time and your margin, while staying credible in your market. Start with the floor, below which working loses you money.
Work out your floor rate
The floor rate is your survival minimum, not your target price. It avoids the “gut-feel” pricing that makes you work at a loss without noticing.
Start from your target net income
Decide what you want to earn per month, once all costs are paid. That’s your starting point, not an adjustable variable.
Add costs and non-billable time
Contributions, tools, prospecting, admin, holidays. Freelancers rarely bill more than half their hours: factor it in.
Divide by your truly billable hours
Target income + costs, divided by the hours you actually sell. The result often surprises — and explains why so many beginners burn out.
Move from hourly to fixed price
Hourly billing penalises you twice: it caps your income at your hours, and it punishes efficiency — the faster you get, the less you earn. Fixed pricing fixes both.
- The client knows the amount upfront — less anxiety, easier decision.
- Your expertise works for you — delivering fast is rewarded, not punished.
- The discussion is about the result, not a tally of minutes.
Bill for value, not hours
The same deliverable isn’t worth the same depending on what it earns the client. A sales page that generates €50,000 in revenue isn’t billed like a writing exercise. Ask the question that changes everything: “What does this project earn, or save, my client?”
You obviously don’t bill the whole gain, but it sets the upper bound of what’s justifiable — often well above your hourly calculation.
Raise prices without breaking everything
Raise for new clients first
Apply the new rate to upcoming quotes. You confirm it lands without risking your current book of business.
Give recurring clients notice
A simple message, a reasonable lead time, no over-justifying. Most stay; those who leave free up room for better ones.
Raise in regular steps
Better +10–20% every six months than a brutal doubling every three years. Regularity normalises the increase.
State a price without apologising
How you state a rate weighs as much as the rate itself. Say it clearly, then stop talking. Apology phrases (“it might be a bit expensive, but…”) sabotage your own price and invite negotiation.
Comparing to the market’s cheapest
There’s always someone cheaper. Competing on price is promising a race you’ll lose.
Accepting every downward negotiation
Cut the scope, not the price. “I can adjust what’s included” beats “fine, cheaper”.
Waiting to feel “legitimate” before raising
Legitimacy comes from charging fair rates, not the other way around. Don’t wait for permission.
Your questions
Frequently asked questions
How do I know if my rate is too low?
Should I show my prices publicly?
What about “it’s too expensive”?
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