3 Reasons Why Freelance Pricing Is So Hard

Everything I’ve learned about freelance pricing I learned in the School of Doing through trial and error. My first gut punch lesson came mere weeks into my freelance journey.

This was 2009 when the Great Recession was in full swing, and my first job out of grad school had ended abruptly on a Friday. My boss Chuck called me into his office to deliver the news. I was “indispensable,” he said. But he still had to lay off half the agency. I was one of the people leaving.

Later, when my mind caught up with this new reality, I kicked myself for not saving more over the last six months.

Chuck called me the following Monday to ask if he could hire me as a freelancer to finish all the copywriting projects I had been working on. I had $486 to my name and was so relieved I could have cried.

He asked what my freelance rate was. Given that the agency had billed out my time at $85 an hour, I thought I could get away with charging $40 an hour, roughly three times what I’d been making while on salary. Chuck agreed, and the joke was on Chuck until I prepared the invoice.

The projects were for a local bank, nine of them, including four print ads, four short newsletter blurbs, and one press release. All told, I’d spent ten hours writing copy, so I was looking at $400.

Better than nothing, but still, it didn’t take a finance whiz to see that hourly billing was a trap. The faster I worked, the less I earned.

And the nature of copywriting is that the better you get, the less time it can take. Maybe the right hook pops into your mind at the grocery. Or, you think of a beauty of a concept after overhearing a snatch of conversation at a restaurant. Ideas find you when the timer isn’t running.

Even so, on May 25, 2009, feeling deflated, I sent the invoice for those ten hours. Part of me understood that $400 was better than $0. Cash was green oxygen, and I could do what John C. Maxwell recommends:

“Fail early, fail often, but always fail forward.”

Fifteen years later, I wrote the book on freelance pricing and money mindset. It’s called Free Money, and you can buy it here. It’s worth your time because the pricing process contained in its pages has made freelancers and consultants millions more than they would have made otherwise.

I’m going to be honest with you. Reading this post won’t fix your pricing. Most of us need to read a book because there’s some basement-level mindset work that needs to happen and it tends to be slow. The commitment of reading a book creates the space and timeline for change to catch us.

That said, let’s kickstart that process now by exploring three reasons why we struggle with pricing:

• We enjoy the work.
• We don’t learn this stuff in school.
• Freelance projects don’t have set prices.

1. We enjoy the work.

Putting a price on a job you don’t want to do is easy. Someone offers you a piddling sum to clean toilets with a toothbrush at a daycare, and you say, “Nope!” But eventually, if they kept raising the price, the right number would overpower your distaste for the work. Bills don’t pay themselves, and your cat, Mister Jiggles, does love his cans of salmon florentine.

What about putting a price on work you enjoy? When the prospect of earning money gets tangled up with the pleasure of creativity and problem-solving, it’s harder to know what to charge.

The best work is the kind where you get lost in the flow. Is it play? Is it labor? Hard to say.

I used to feel guilty about charging a premium for work I find fun and relatively easy. Standing under a waterfall of works and dreaming up ways to solve interesting problems is what I do in my free time. To make clients pay for something I’d do for free would be taking advantage of them.

My coaching clients have confided that they feel guilty, too, but I remind them (and myself) that some people hate writing. They don’t enjoy strategy, aren’t good at it, or won’t slow down long enough to do it well if they don’t pay someone as a forcing function.

You know you’re headed the right direction when your work does feel more like play than labor and charging a premium for it feels like cheating.

2. We don’t learn this stuff in school.

I spent six years in undergrad and grad learning how to write and how to read literature. Iambic and trochaic meter I can spot a mile away. Sonnets? They can’t hide from my penetrating gaze.

What was missing from all the syllabi and course catalogs was the “How to Make Money as a Writer” class. A fat lot of good Shakespeare and scansion did me when I needed to put a price on a blog post.

Depending on your education and background, you may have come into business with both gaps in your knowledge and mental hangups related to money.

Lots of artists and writers in particular feel conflicted about using their creative talents for {gasp} commerce, and so putting a price tag on a project represents a double whammy: “I’m not sure how, and I feel conflicted.”

3. Freelance projects don’t have set prices.

What would you pay for a gray-ish burger under a heat lamp at a convenience store? What about a burger made with double-ground Prime brisket and smashed by a Michelin-starred chef?

Imagine the knowledge and artistry Alain Ducasse would put into the brioche bun, top-secret sauce, and pickle medley!

The price for a burger goes up or down based on perceived value, and creative and consulting work is no different. A client may ask, “How much does a logo cost?” and the identity designer tries not to roll her eyes because it’s such a basic and honestly stupid question.

Visual identity design projects can vary dramatically in terms of scope and price, even if they’re famous like these three:

• In 1971 Phil Knight, Nike’s founder, paid a design student named Carolyn Davidson $35 for the now iconic swoosh logo.
• In 1986, Steve Jobs paid designer Paul Rand $100,000 to create the visual identity for NeXT Computing.
• In 2000, BP Amoco paid design firm Landor a whopping £4.6 million to redesign the company’s logo.

This slice of text spam I received promised a custom logo and 100% Satisfaction for $9.99. I seriously doubt it, but I’ve made my point: If you’re an identity designer, you can charge between $9.99 and $5.5 million in today’s dollars. Glad we cleared that up.

Projects don’t have set prices. What people will pay depends on perceived value. Perceived value goes up with perceived expertise, context, and packaging. If you have Paul Rand’s reputation and confidence or Landor’s history and portfolio, then you add extra zeroes.

If you don’t, you end up charging a lot less than you could.

So yeah, pricing is hard.

It’s your joyful responsibility.

One of the most empowering pricing conversations I had nothing at all to do with pricing.

I was in my friend Chris’s front yard, pacing underneath an elm tree while my dad and I had a come-to-Jesus talk about Money, capital M.

“I wish your mom and I had done a better job teaching you and your sisters how to manage money,” he said. “But now it’s your responsibility to learn.”

Here’s the takeaway for freelancers: You’re not to blame for not knowing, yet learning how to confidently price your offers is still your responsibility.”

Smart, sustainable pricing is your responsibility and your golden opportunity.

What if you were to master pricing? What would that mean for your positioning, your finances, and your lifestyle for the rest of your life?

My friend Shai said recently, “Joy is to accept.”

Becoming very good at pricing can be a joyful responsibility if you simply… accept it and get on with the learning. I hope you will.

Free Money can help you on that journey. The first half of the book is the step-by-step process for setting prices you’re confident in. Check it out.

When you’re ready, here are ways I can help you:

1. Morning Marketing Habit. This course will help you build an “always be marketing” practice, become less dependent on referrals, and proactively build the business you want with the clients you want. My own morning marketing habit has enabled me to consistently make 6 figures as a freelancer.
2. 1:1 Coaching. Gain clarity, confidence, and momentum in your freelance or consulting business.
3. Business Redesign (Group Coaching). Raise your effective hourly rate, delegate with confidence, and free up 40 hours a month.
4. Clarity Session. It’s hard to read the label when you’re inside the bottle. I've done well over 100 of these 1:1 sessions with founders, solopreneurs, and freelancers who wanted guidance, a second opinion, or help creating a plan.