Asking for Money as a New Freelancer or New Business
So, you have decided to work as a freelancer or start your own business. And you have found your first client – congratulations! Your hard work has paid off to get to this point. It is now time to put a price on your work. This can feel like the hardest part so far. Asking someone for money can feel intimidating and overwhelming. But you aren’t alone in feeling like this.
I have recently ventured into the Wedding Film industry and, at first, it definitely shocked me when I found out how much some companies (rightly) charge for their services. So, I had to quickly learn how to value myself and my skills. Here are some things that I’ve learned along the way:
1. Know your worth
Whether you are starting something new, or doing something where you have experience but are charging for the first time, it is natural to be nervous. Believe in your skills and talents. And believe that people are willing to pay for them! It is important to have courage in your convictions. You may be used to working for minimum wage, so to then set your own rate can seem unjust, however, you will learn that this is one of the joys of working for yourself!
2. Know your market
Do some market research to work out standard prices as well as high-end, and decide where you want to be and where your skill set lies.
Make contacts in the industry and ask for their advice. This could also help you get work! You could approach people on social media or through their websites – most people are willing to help!
Speak to family and friends and see how much they would pay for your services – some of them may have used a company like yours before.
3. Come up with a pricing strategy
Firstly, you need to get your head into business mode. Consider:
The cost of your product or service – the amount you spend to produce it
The price – your financial reward for providing the product or service
The value – what your customer believes the product or service is worth to them
You could use a value-based or cost-plus pricing strategy:
This focuses on the price you believe customers are willing to pay, based on the benefits your business offers them. Remember, what may be only a few hours of (hard!) work to you could last the client a lifetime.
This takes the cost of producing your product or service and adds an amount that you need to make a profit. This is usually expressed as a percentage of the cost.
When deciding upon your pricing strategy, you could consider:
Charging a booking fee, potentially as a non-refundable deposit. You may have already hired equipment or turned down other work for the client and so should they cancel, this would cover your expenses.
Having a full day rate and half a day rate
Having a list of additional extras and prices for those
Charging for the cost of additional workers
Charging for travel expenses
Charging for the use/hire of equipment
4. Agree on a price
Start by asking the client what services they want and what they are hoping to pay, to get an idea of their budget. You can then provide them with your approximate prices for the required services. It is up to you whether you leave room for negotiation, or whether you are set in your pricing. If their budget is well below your pricing, they may not be the right client for you, and you shouldn’t feel like you have to accept every job. However, when you start out, you may want to offer some discount in order to build up a portfolio, but make sure it is still worth your while. Try not to go in too cheaply, otherwise, clients may question the quality of your services.
5. Write a quotation or invoice
Once you have worked out what you are going to charge, send the client a quotation. This should show them exactly what they will be paying for. Once the price is agreed, you should ensure the client knows at what point in the process that they should pay you, for example, do they need to pay a 10% non-refundable deposit before you provide the service in order to secure their time slot and then pay the full balance by a particular date?
You can then invoice the client, detailing exactly what they are paying for.
6. It will get easier!
When you do decide on a price, no matter how much research you have done or what logical strategy you have used, you can still doubt yourself and not feel worthy of the money you are asking for. This is where Imposter Syndrome can sneak in. But just be confident, and once you get the first few out of the way, you will feel much better about the whole thing.
Find out more
Looking for freelance work? Take a look at our suggestions of the best places to find it
If you’re thinking about becoming a freelancer check out Jamie’s blog about his journey to freelancing.