Pricing for Freelancers: Tips and Tactics to Capture More Value

Welcome to Live With The Pricing Lady.

I'm Janene, your hostess.

This show is all about helping you build a sustainably profitable

business while making an unbelievable impact on your world.

Learn from my 20 years of experience and from my guests as we discuss their pricing

challenges, failures, and successes.

Pricing is a way of being or behaving in your business.

My mission is to help you confidently charge for the value you deliver.

Pricing is either hurting or helping your business.

Let's make sure it's helping you reach your dreams.

Today, I'd like to welcome my guest, Karla Fernandes.

Hi, Karla.

Hi, Janene.

So good to be here.

I'm thrilled to have you here.

We're going to be doing something a little bit different today.

Karla asked to come on the show to actually ask me questions.

I'm a bit in the hot seat here, but before we get into her questions, let's

get to know Karla a little bit more.

First of all, Karla, where are you joining us from today?

I live in Lucerne, Switzerland.

Lucerne.

And are you originally from Switzerland?

No, I'm from Brazil, and yeah, I live here.

Excellent.

And what is your superpower?

Okay,

I am a jack of all trades.

As a designer, that is a generalist, I can really tackle various topics.

And then, as a team of one I can do a little bit of everything from zero to end.

Okay, that's a great skill to have.

Very useful, I'm sure, as well.

What's something you, like to share with us, of course, that

most people don't know about you?

Most people don't know about me that I started my career as a graphic designer.

Then I became a full stack developer long before I started

creating native apps using no code.

Okay.

Okay.

Super.

Excellent.

The next thing is, why don't you tell us a little bit about your journey to,

your business and how you got started?

Okay, so I am a digital product designer and consultant mentor, and I have 25

plus years of experience in design.

I have been working with more than 150 companies, well known tech

startups, educational organizations, and service based companies.

I speak four languages and I have been living this digital nomad life,

like I lived in 11 countries before coming to Switzerland, and I have

launched More than a dozen apps.

I am as a mentor, I really care for my mentees and that's why we are having

this episode today that you are so kind to share your expertise with these

people like me that want to actually start their careers as a freelancer.

Like, I mean, a lot of junior designers today are interested in starting a

You know, Job Hunt has been a hustle, like a lot of layoffs and they are

really interested in starting, but they don't know how, and when they

learn how to get their first customer, the second thing that really hurt

them, it's pricing, they don't know what to do, what's the best practice.

And of course, like I started 18 years ago to be a freelancer and

the things have changed so much.

Right?

Like three years ago, AI was nothing and now it's so much.

So imagining pricing, how much has changed?

And I'm here to ask you a bunch of questions that probably you have a

lot of designers out there and also freelancers and solopreneurs like myself.

Okay.

Before we get into the questions, I do have one more question for you.

What was it like when you first started, the first time you had to set a price

for what you did in your business?

Oh, it was very interesting time.

I would say like at the first time you actually get to do a project for someone.

As for money, and they say, yes, it's so exciting.

it's so exciting, right?

Like, wow.

Someone is really paying me to do something I already enjoy doing, right?

Like the first, actually, I believe that the first project I did that was as a

freelancer, it was a branding project.

And I just saw, restaurant nearby my place and they had this horrible It

was really horrible, like, and the food was so good, and I really thought

this was It could be much better.

I ended up there, like I actually did some drafts of it, like all myself, by myself.

And then I went there and I said like, you know, I would actually really love

to augment you with a brand because I'd really love to eat here and so on.

Owner just told me like, well, Karla, we will hire you.

Even if we exchange that in food, which I actually found was a very good deal.

I thought, okay, this is amazing.

I just didn't know what to price.

So I told him like, Oh, what do you think you would be fair?

Like for sure this was not the best, how to say, experience.

But for me as a, Very junior, like, starting my career.

That was awesome.

And he was very kind.

Like there is even really changing a little bit subject.

There is a guy that did something like that.

He used to give their, his customers websites and say,

like, you pay what you want.

And he ended up actually earning a lot of money because people were so happy

with his work and then he earned a lot, but that cannot be the case everywhere.

Right.

So, but he was very kind.

And I think if I would put in terms of today, I would have earned maybe,

yeah, 500 francs or so that for someone starting, it's a good price for.

Yeah.

Okay.

Okay.

Now I'm always curious what it's like for people that first time they have to do it.

Everybody's experience is a little bit different.

Okay.

So now you have some questions for me focused on pricing for freelancers.

Why don't we dig into some of those questions?

Yeah, sure.

I you do the first one.

So what key factors, like in your opinion, should freelancers consider

when pricing their services?

Yeah.

I think one of the very first things I would say is super important.

And I know you follow me, Karla.

So you probably know this is coming is getting really clear

on who your customers are.

I liken this to, picking up a set of binoculars and you look through

and it's all unfocused and blurry.

And then you start adjusting the binoculars and you see very quickly

that things can come into focus and understanding your customer is like

bringing your binoculars into focus because if your customers are, let's say,

small businesses, small local businesses, Then you probably are going to charge a

different price than if you're working for large multinational companies.

And that's why I say getting clear on who you're targeting first is going to,

in large part, determine the prices.

So that's one thing I would say.

I know for a lot of freelancers, they kind of feel like they

have one price for everybody.

You know, there's a price for the work.

I'm saying that there could be different prices for your work, depending on

who you're serving, because different people will value it in a different

way, or it'll bring a different level of value to different types of companies.

Yeah.

So that's the first thing I would say is a real key factor.

Another thing, and people don't like to talk about it because it's a little bit

unsexy, is your business targets or goals.

So what are you trying to achieve with your business?

If this is just a side gig because you love doing it, you may choose to do

something different with your pricing than if you're going to be living from it.

Yeah.

Doesn't mean you have to charge different prices in those two cases, but often

you will charge something different.

That's also really important.

Yeah.

There's a lot of things here that Play into it.

But those are the two places where I recommend most people start because

most people will actually, especially freelancers will start by looking

at what everybody else is charging, but one, there's not always a lot of

transparency in the freelance side.

There's some, but not always a lot, depending on which industry you're

in, but also if you benchmark yourself against the wrong people, then you

can very quickly come up with a price that isn't going to be good for you.

Another thing to consider is to think about how much you want to work.

This is kind of funny way to go about this, but in freelance when people

first start out often, not always, but often they're being paid for time.

Not my favorite pricing model.

We can talk about that later.

But when you're paying time, then your time is limited, there are

a limited number of hours in the day and an even smaller number of

hours, which you're willing to work.

And so what you charge also has to reflect you being able to, you

know, earn enough money from it.

And if you charge too little, there simply aren't enough hours in the day for you

to earn the money that you would like.

And all of those things, you know, are part of the process

of determining what to charge.

It has to be balanced between what people are willing to pay,

how much profit you can earn, how much you're going to have to work.

You know, it's not, it's not like a calculation per se.

There are calculations in it at times, but it's about bringing these different

aspects into balance when you set prices,

direction.

Yeah.

That's definitely a point that you know, you said that we should talk more

about, and I definitely see that coming.

Like I have a lot of Experience, right?

Like a 25 years and a lot of senior designers like me as are also freelancers.

Then you get into that point in your work life that you are very effective.

You do things much faster than you used to do when you are a junior designer

or working as a junior or anything.

Right, like you didn't know your skills, you didn't know how much time you needed.

And if you get on this mess of charging per hour, you have, I dunno,

8, 10, 12 hours to work every day.

And then you earn that.

But if you get very fast and you charge per hour can be a huge problem.

So how can freelancers really balance this competitive pricing with a

fair compensation like for their expertise that is not because they

are seniors that they do things faster that now they get to earn less.

Yeah, yeah.

No, and that's, that's a really good point.

So before I answer your question, let me just go back a step.

And that's a really important point to make very clear to people.

When you charge based on time, as you gain experience and expertise,

you can do things Faster, more effectively, and it may actually

get your clients better results.

And all three of those things are added value for the customer, which means that

if you're charging per day or per hour, you would charge less because you get

it done quicker, but they're actually getting better results than before.

So using time based prices over time doesn't actually scale with

you as you become more effective and efficient in your business.

So that, that goes to my distaste, let's say, for, for time based prices.

They have a time, ha ha ha, and a place.

Yeah, and they are easy to start with, but you need to remember at some point

you're going to want to transition.

So now let's go to your second question about balancing competitive, being

competitive versus fair compensation.

Now, the first thing that I would say is really important is making sure that

your definition of a fair compensation or a fair price is all encompassing.

This is one of the things I talk about a lot, like what is a fair price?

And for me, it has three elements.

The first one is a fair price is aligned with the value that you

deliver or that your offer or your product or service delivers.

Right.

Second of all.

It's at a level that people are willing to pay.

And third of all, and this is the one that most people miss, right?

Is that it brings you a reasonable profit.

So oftentimes when people talk about fair compensation or far prices, they lean more

towards it being fair for the customer.

And they often will leave themselves out of that equation.

It's amazing point.

Yeah.

Like, so.

I had a thought here.

You are saying a little bit something like,

everyone has a different type of success, right?

Like what success looks for you?

Like how much would you have to earn during a month or during this time?

Or how would you trade your time with your family?

If that's the point or your vacation with your work, right?

Like how that's valuable in your current life, right?

Yeah, in part, that's part of it.

Yes.

It's also the, if you're talking about the value, it's the value

of what it brings your customers.

If they had to learn the skills that you have to do, you know, let's say

you're building a website for someone.

If they have to go and learn all those skills, it's going to take

time, resources, and energy, right?

You're saving them having to learn the skills that you have.

That's why they're paying you to do it.

But also once they have a website built and it's built in the right way,

then it will help them advance their business, which has additional value.

So maybe they get more revenue or they get more leads or, you know,

whatever it is that also has value.

So the prices that you select should reflect that value that they can get.

Is that a common trend for you?

Sorry, sorry.

It is that's a common trend for you to, to, to see that people forget

to ask the customers or the future, future customers, what is actually

that is so valuable for them in, in this project and how do you use it?

And so once you also benefit from knowing what is that the goal to,

to make that a more, let's say, easy pricing, is that something that you

should consider or would be helpful?

Yeah, it is because my feeling, so most let's, let's just

start stick with services.

Cause we're talking freelancing today, right?

So.

Most service based businesses, when they go to set prices,

they go, this is what I do.

This is what other people are charging.

I'm new.

So I'll charge 10 percent less.

That's not much of a strategy.

Yeah, that's, that's like barely scraping the bottom of what

one would define as a strategy.

No, it's, it's, it's, it's something, but it's not actually going to, do

you know if charging 10 percent less than everybody else is going to bring

you enough profit in your business?

Do you know if what they're charging is a reasonable price to charge?

Maybe it's really high.

Maybe it's really low.

Yeah.

Do you know if that's related to the value that they're going

to get from working with you?

So yes, I think absolutely people need to understand their customers and what

it is that they're looking for in a solution and what they value in that.

It could be that they value the way that you work together.

It could be that they value the results they're getting out of working with you.

But knowing what they value can help you find not only the right offers,

but then also the right prices.

I think another thing that helps you to balance being competitive and, and

fair with how you're compensated or how you price yourself, especially

in freelancing is to be really clear about setting boundaries.

So for example, and I know that you know this, scope creep is a real

challenge for a lot of freelancers.

Yeah.

One because they're focused on how much time is this taking me because

everybody's overly focused on the time.

Because that is the unit of measure for what's going to be paid.

But the time doesn't necessarily reflect the value.

Just because you spend more time on something doesn't

always make it better, right?

Yes.

So, I think you have to be clear about what's included, what's not

included, what's not included.

When there will be additional fees.

And as a freelancer you don't wanna scare people off with that, but you

wanna set some of that up from the very beginning before you even get

into a contract and make that clear.

And often.

It's harder creating those boundaries for yourself than it is create,

setting it with the customer.

Right.

I agree.

I agree.

And like, setting those in into, it doesn't really need to be a super

lawyer contract, but, you know, at their, what you deliver, what is

the most, What will be delivered?

When will it be delivered?

And, set all these expectations to the customer also helps a lot because if you

just say like, okay, I, you deliver it.

And then the customer comes to you.

I want this change.

I want that change.

And this was not foreseen.

Then you come up working much more than you thought of and in the end if you

do that measure up even if you are not asking for our price and you measure

how long you spend in the project and how much you earned you can see

probably that that was no revenue at all or that you didn't get anything from

that project or even worked for free.

Right.

I think that's a great segue into another point, which is even as a freelancer

at time, at some point in time, you're going to want to create packages for

the more standardized, and I'm doing air quotes here, things that you do.

One, because it enables you to be more prescriptive about

what's included and what's not.

Two, It doesn't, you know, leave things so open ended when the

customer is deciding to work for you.

There's actually something tangible that they can, can, you know, see

and make a decision based upon.

But it also helps you to work more efficiently.

Yeah.

So it's like, I liken it to, you know, if you ask a child, what would you

like for lunch and you don't give them options, they can come up with anything

and you may not have that in the fridge.

Right.

And it's the same thing with customers.

Well, what do you want me to do?

And they're like, ah, laundry list.

Doo, doo, doo, doo, doo, doo, doo, doo, doo, doo, doo.

And that list gets longer over time.

Right.

Whereas if you say, well, This is what I typically do for clients

like you, either something like this or something like this.

These are two different price points depending on your budget and depending

on the features that you want.

Yeah.

So it (creating packages) actually helps them to make decisions easier, but it

also helps you work more effectively.

And I think that that leads to better conversation.

Yeah,

I, I went to that actually share with everybody that in the first call, like,

that's where you were just spending time kind of, networking, learning each other.

You told me something that really stuck with me and I think it's really

helpful to everybody on that point.

That is, Keep something simple that you can send to any customer

that wants to work with you.

That is something basic, like, Oh, you know, I can help you with this.

And then you say in the email, and if you want something more

customized, we can just hop on a call and then talk about the details.

And then I create a proposal that is specific for you.

I thought that was so brilliant and I have done it a ton of time.

And yeah, I did.

I think that was the best tip I ever got in pricing ever.

And that's why I'm here, right?

Yeah, I mean, that's absolutely correct.

Because it allows you to get that first offer out the door very quickly.

And this is, again, if you have a few packaged offers, again, you can

send something out fast without it requiring a lot of time on your behalf.

Before you've actually learned enough about the project to be able to make

a more fine tuned and quickly you set the expectation around price.

Yeah.

So they see what the standard option is.

They know that anything customized is going to be more than that.

Most likely, right?

So you're, you're making, you're kind of putting a stake in the ground and saying,

okay, at a minimum, this is the value.

And I have to share this because I love this example.

There's a photographer On his website, he had a pricing page and his pricing

page, I thought it was one of the most brilliant examples of putting

that value stake in the ground, his website, his pricing page is said, is

it really going to cost me at least 2, 000 for you to photograph my wedding?

Yes, it is.

Are you okay with that?

And the person could click yes, and it would take them to a contact page.

And then it said, if you're not okay with that, here's a link to Craig's list.

That's an amazing way to show them.

Yeah, it was really,

yeah.

It's really saying, okay, I understand if that's not what you want to pay,

if it's not within your budget, or you don't think that's reasonable,

then there are other people who can help you with what you need.

Totally true.

Like, you know, we're referring other customers to other people.

It's a common practice of sometimes because you don't have the time, some

other times because like, they just don't have the budget to work with you

or like, any, Talking about that, we should really talk about, , what you

should suggest, like, to set setting those realistic revenue goals, you

know, like you are just starting out.

You have no idea how much you should be earning or what is revenue like, what is,

For you, yeah, what would you suggest?

So when you sit down to set your revenue goals, I think there's a couple

of things that you have to look at.

And again, they fall into what most people would categorize as

the not so sexy and interesting stuff, but they're really important.

And the first thing is understanding your expenses.

Yeah.

So what it's going to cost you to run your business.

Second of all, what are your goals?

Again, back to the very start of this conversation where we talked about, are

you just doing this because it's fun?

Are you doing it as a side gig?

Are you doing it to live off of?

And also think about that longer term, you know, so three to five

years from now, if your goal right now is a side gig, but you want to

get to where you can live off of it.

You have to set yourself up with that in mind.

So with startups, often I'll see that, when they do their, their

pricing, they use financials that don't include their own salary because

they know they're not going to pay themselves the first couple of years.

But if you set your prices based on The Financials That Don't Have Your Salary.

How could you ever get to a point, you know, in your business

where you can, because your prices aren't set up for that.

Yeah.

So it's a similar thing here.

You have to understand, you know, the running costs of your

business and your, your objectives.

I think you also have to be really.

Honest with yourself about non billable time and you will

absolutely have non billable time.

I think most people on average probably spend one to one and a half days a week

where they're doing non billable things.

Yeah.

So you may think that you're Income is 40 hours a week, if you want to

work 40, times your hourly rate.

I can almost guarantee you that is not going to be the case unless you're

working closer to 60 hours, right?

Because that non billable time is That is doing all the back end business

stuff, all the marketing, all the selling, all the connecting with

people or whatever it is that you need to do in order to get those jobs.

Writing proposals, all of those things are time consuming to some degree.

And if you don't account for that upfront.

Then you will get to the end of the year and you will realize, that

didn't quite work out as I planned.

And you'd like not to do that.

So I have actually, I have a tool on my website.

I have a toolkit on my website.

One of the calculators in that toolkit is called making a living.

Calculator, but allows you to put in, you know, your total hours you're going

to work and the vacation hours training.

If you do like education and training, you can take that out.

Holidays, so on and so forth.

And then put in an hourly based rate and see what at a maximum you could earn.

And that's a really good place to start, with that.

Account for seasonability.

Oh, oh yeah.

So in a lot of industries or in certain parts of the world, like

here in Switzerland, I had a young lady I met, last year, I think

it was last year, the year before, and I met her at an all time high.

And she came to me and she goes, how do I get my customers to buy stuff from me?

In August and July.

And I thought, Oh, this is a seasonality issue.

She works in an industry where most people are on vacation during the summer.

second half of July, and August.

You can't force people to buy from you, but you know, she needed to either

accept the fact that those months were going to be lower and make it up in

other months, or she needed to design an offer for the people who were still

around during those months, right?

That would be of interest to them at that time.

So seasonality is really important.

Chances are you won't have the same amount of business every month.

And you need to understand where those low months are and where, you know,

you might be able to earn more in order to, to compensate in a sense for that.

And probably use that time, right?

Like you said, just use that time with the training, use the time writing proposals

and everything.

What I, what I did starting last year, which worked really well for

me is I have to kind of black out using air quotes again, period.

So the last two weeks of December and the first two weeks of January,

and then for like six weeks in July, August time period, I don't

do a lot of client facing work.

I only do that by exception during those times.

And basically I'm planning out and preparing for the year ahead.

in those times.

So I'm doing a lot of behind the scenes work and that works really well for me.

Other people choose to handle it in a different way, but it's just something to

Think of when you're setting your revenue goals because revenue doesn't always

come in at the same amount every month, like when you're receiving a paycheck.

I think the last, there's two more things I'd like to add here

before we start wrapping this up.

One is create three sets of targets.

There's like the normal case, the worst case and the best case revenue.

Then you can start actually thinking about, okay, what it's going to take

to achieve just the worst case versus the normal case versus the best case,

because they will take and require different things from you in order

for you to be able to achieve them.

And then the last thing is you're going to want to track, review, and adjust.

So when you set your goals, you know, most people, they write a business plan.

They don't come anywhere.

I know one person who's very proud of the fact that they hit all their

goals in their original business plan.

But that's not the normal case for most people.

They don't do that.

So your, objective should be, okay, set something you think is realistic,

maybe stretch, but achievable.

And then track that and don't wait until the end of the year to track it.

Maybe at the, you know, for the first couple of years, you might

even want to look at it monthly.

And then later you might feel comfortable going to quarterly, but track it,

ask yourself, okay, what worked?

What didn't work?

Are there any adjustments I need to make?

Definitely.

Like a design sprint of your planning, right?

Let's think about it.

So, I mean, setting realistic revenue goals, is, you know, it feels maybe

a little bit like magic, but you know how many hours you want to work.

You know how many of those you can bill.

You have idea of what you may be able to charge different people.

So you can start to get an idea of what's possible, but then of course

you have to go out and get the work.

And that's why you need to track against it.

Yeah.

So hopefully I've been able to answer and give you guys some insight today.

Yeah.

What is something that you'd like people to remember from

what we talked about today?

Well, I believe you should, they should all review of this, you know,

really one of the biggest points for me, it's thinking about what's your

worth, how you want to spend your time, if you do a little bit of studying,

if not, and then try to Always keep a plan, like a, or track it, right?

Like a track it with, with you, see if you are evolving, if you need something

to change in the middle, if you can do a small adjustment and see how it goes.

It's an A B test, guys, like, so you are designers, you know what an A B test is.

So keep doing that with your business, keep doing that with your projects, and

probably you get in the right track.

Yeah.

Yeah.

I'd agree with that.

I might add that, there's no such thing as a perfect price.

And so if you're frustrated trying to find a perfect price, then you need to

take a step back away from that objective.

Because there is no perfect number out there for any business.

There are lots of prices that are going to be suitable for you and your business.

Your job is to figure out what those are and also know that they're

going to change as time goes by.

So you may set a price now and six months from now or a year from

now, you may choose to change it.

One thing I like to tell people is always have a little tension, have

a little tension in your price, both for you and for the client.

And if you keep that little bit of tension there, then you know that

you're, you're getting a good price, that they're getting good value.

And it's, it's a good thing.

I don't want to say it's a little bit ouchy for everybody, but it's, it

feels a little bit uncomfortable for you to ask and they feel like, yeah,

I think that that's still good value.

Let's give it a try.

Then I think you're really getting towards what is fair

and reasonable for both of you.

And I think that's the most important thing.

That's great advice.

As everything else.

Okay, let's wrap this up with a few little questions here.

, What book or podcast or something that you like to listen to would you

recommend to our listeners today?

You actually talk about, Many books, right?

Like, I think it's really important to develop the habit of listening

to these short summaries for you to identify the books that are

worth for you to dive deep into.

Like, I use Blinkist.

And 12 minutes every day.

There are a bunch of apps like this.

And then I hear those summaries.

When I think something really clicks with me, then I go for the whole book.

Then I don't spend so much time starting to read the book and say like, Oh,

no, that's not what I want to learn.

Yes, I use Blinkist as well, but maybe not as religiously as you,

but I do find it very helpful.

So we'll put a link to that in the show notes as well.

Carla, if people would like to find out more about you and how to work

with you, where should they reach out?

They should definitely check my website.

It's vitaminak.

design.

There you go.

We'll put that in the show notes for you.

Plus her, her links on social media so that you can connect and follow her.

Karla, thank you so much for coming on the show today and also for shaking things

up by asking, to change the format a bit.

I believe that that was, really helpful to the listeners and I enjoyed it.

Okay.

I like talking about pricing, and it's also been nice to

know you a bit better as well.

Thank you so much for joining us.

That was great, Janene.

Thank you very much for helping my mentees and everyone else

that works as freelancer, too.

Thank you.

You're very welcome.

All right.

Everybody.

Thank you so much for joining us today.

I wish you a great day, everyone, all the best.

And as always enjoy pricing.

Thank you for listening to this episode of Live with The Pricing Lady, the podcast.

If you enjoyed the episode, rate, review, and subscribe to it, then share

it with your friends and colleagues.

I love hearing back from you listeners.

If you've got comments, questions, or topic ideas, go on

over to www.thepricinglady.Com and contact me there.

Not sure where to start when it comes to improving pricing and profits?

At ThePricingLady.

com you can download a copy of my Self Assessment Pricing Scorecard.

Find out where it's going well and where you can begin improving.

Or just simply book a discovery call with me.

There we can discuss what's up with pricing in your business and

how I might be able to help you.

Thanks once again for joining.

Remember, pricing can hurt or help your business.

Let's make sure it's helping you reach your dreams.

See you next time and as always, enjoy pricing.