Freelancing demands a keen sense of self-worth when it comes to pricing your services. Undercharging is a common pitfall, especially when starting out. But how do you know if you’re truly earning what you’re worth? Here are five telltale signs, backed by recent studies and news reports, that you might be underselling your freelance skills:
You’re Constantly Swamped but Barely Making Ends Meet
This is a classic sign highlighted in a Blog by the Freelancers Union. Long hours coupled with a low income indicate you’re not charging enough to value your time and expertise.
Solution: Track your hours meticulously and calculate your effective hourly rate. Are you below industry standards? Are you mismanaging your time on low-priority tasks? Freelancer platforms such as YunoJuno, Upwork and Fiverr can be used to benchmark your rates against similar freelancers.
Clients Rarely Negotiate Your Rates
According to a report by Payoneer, freelancers who confidently present their rates encounter less resistance. If clients readily accept your quotes without discussion, it might be a sign that you’re undercharging.
Solution: Don’t shy away from negotiation. Present your rates with confidence, justifying them with your skills and experience. Be prepared to walk away if a client relentlessly pushes for a rock-bottom price.
You Feel Resentful Towards Your Work
A study on the psychological impact of job insecurity shows us how cynicism and emotional exhaustion can be common among freelancers. If you dread starting projects because you already feel undervalued, it’s time to reassess your pricing or the types of projects you keep going for.
Solution: Reflect on your recent projects. Did any leave you feeling burnt out and underappreciated? Identify the culprits and analyse why. Was the scope creep excessive? Was the client overly demanding? Use this knowledge to adjust your pricing and set clearer boundaries or additional fees in the future.
You Haven’t Raised Your Rates in Over a Year
Inflation is real! Failing to adjust your rates periodically means you’re effectively earning less over time. Recent news reports highlight the rising cost of living impacting freelancers. Don’t ignore them.
Solution: Schedule an annual rate review. Factor in your growing experience, skills acquired, and inflation rates. Don’t be afraid to inform existing clients of reasonable price increases with advance notice.
You’re Relying on Discounts to Attract Clients
While occasional promotions can be strategic, constantly relying on discounts undervalues your services. A survey by Contently found that freelancers who offer frequent discounts often struggle to build a sustainable business.
Solution: Focus on your unique value proposition instead of competing on price. Highlight your expertise, specialization, and client testimonials to justify premium rates. Attract clients who value quality over rock-bottom prices. Freelancers that mix hourly and project-based fees are able to command a higher average rate than those that stick to one method or the other.
Moving forward
Recognising these signs is the first step towards earning your full potential. Your skills and time are valuable, but if you consistently keep rates below the average and do not increase your rates annually or when inflation spikes, then you have to ask yourself, are you partly to blame? By confidently pricing your services and continuously honing your craft, you can help avoid underselling yourself as a freelancer. If you are an umbrella worker be sure to adjust your rates to accommodate any tax hikes, as previously reported by The Freelance Informer.
