If you’re like most freelancers, knowing how to price your services can be a real struggle. Charging an hourly rate can feel less scary than asking for a higher fixed-rate package, because you know you’ll be paid for every hour. But there are drawbacks to trading time for money – not least that it limits your earning potential. Here’s how to package and price your services for higher profits.
Focus on results, not time
When you bill by the hour, clients focus on how you’re spending your time rather than the results you’re achieving – and it opens you up to comparison with competitors who charge more or less per hour. What you want clients to focus on is the value you bring, which is why fixed-rate packages are also called value-based pricing.
Relieve your clients of invoice anxiety
Clients almost always want to know what your services cost up front – especially on a large project where the investment is significant. A fixed-rate package makes it easier for a client to say yes: knowing the final cost in advance lets them plan, budget and invest with confidence. It also frees you to do your best work, knowing you’ll earn a fair rate with the potential to grow your earnings.
Why fixed-rate pricing means higher profits
Charging by the hour can leave some providers less motivated to work quickly, and with limited hours in a day it caps your earning potential – which is why many who trade hours for dollars eventually burn out. With fixed-rate packages, it’s in your interest to work more efficiently, so you earn more for your time while making clients happy by getting the job done promptly.
All pricing strategies have risks
The downside of fixed-rate pricing is that some projects will be more profitable than others, depending on the time required. Reduce the risk by being crystal clear on the deliverables at the outset and always putting the agreement in writing. Some clients will try to expand the scope – especially on long projects – but with experience you’ll win more than you lose.
Final thoughts
If you’re ready to switch to fixed-rate packages, start by understanding the value you already offer – your expertise, training, qualifications and experience – then draft your first package offerings. Being able to communicate exactly how you solve your clients’ problems makes it easy for them to see how valuable your work is. Get this right and clients may even feel they’re getting a deal.