If you are an independent contractor, freelancer, self-employed or another type of small business of one, there are various ways to set your price for the service you provide. However, they generally fall into three categories.
An hourly rate | A price based on how much time it takes you and what are the cost of materials (or travel, etc.). The hourly rate should cover all of your costs, including operating overhead and profit.
A market or “going” price | This is a price that not only takes into consideration the set number of hours you will be spending on the job, but also includes the materials and operating expenses. It will take also into consideration competitive factors and basic economic factors like supply and demand. Note: Make sure your market price is a fair price, also. You want to keep clients for the long-haul.
A value-based price | A price based on how much value your client receives from the work you do.
Here’s how the creative tips site 99u explains a value-based price:
“Too often we set our rates for our work based on certain standards, like the price per hour or project. The problem with that approach is that it only takes into account what you put into the project and not what your client gets out of it. Instead, look at yourself as a creative problem solver and ask yourself How much is it worth for your client to make their problem go away? “This is going to help you create a compelling proposal that’s much more than ‘here’s a list of what I’ll do and a price,’” writes Brennan Dunn.
“So if you’re designing a brand logo for an international company that will be seen by people all over the world, certainly factor that into your rate, as the job is decidedly worth more to you and your client than if you were designing a brand logo for a local restaurant.”