These days the internet is rife with entrepreneurs publishing income reports, and it’s become much more normal for freelance PR practitioners to share hard numbers, at least among a few trusted colleagues. In fact, one of the most surprising things about running your own business might be how much you come to enjoy poking and prodding at income reports, expanding your skill set to include basic bookkeeping, accounting and of course, sales.
One of the biggest challenges facing freelance PR professionals is figuring out appropriate pricing for services – after all, there is no handy hourly-rate chart and, as any client will tell you, there’s a huge amount of variance within the industry. A lack of clarity around the going rate for services, combined with the need to simply have enough business to cover expenses leads many freelancers to undersell themselves. It’s time we all know and charge our worth; after all, we help absolutely no one, clients included, by undervaluing public relations and marketing expertise.
Fortunately, there are many ways to go about adopting a pricing policy for your freelance services.
1. Research salary information of PR agency professionals
While not an exact match (remember as a freelancer you need to be putting away 20-30% of your income for taxes and are responsible for your own health benefits and software), finding out the salary information of someone in your industry with similar experience is a great place to start. Glassdoor provides salary info per industry, job, and location. Payscale is another resource to find relevant salary information.
Pay attention to the different in pay for similar jobs among start-ups and more established companies, and vet this against your target client profile. By knowing what prospective clients would pay to hire a full-time, in-house professional or agency of record, you can price yourself competitively.
2. Factor in operating expenses
It costs money to run a business, and you need to factor in your operating costs into your hourly rate or project fee. After all, in the same way that PR agencies factor in the costs of software, hardware, subscriptions, rent, and salary into their retainer figures, you need to consider your own expenses. Even if you plan to work from home, your cell phone plan, pro accounts, internet bill are all worth factoring into part of the value you offer clients. Don’t get carried away however, some of this is just the cost of doing business; I don’t suggest working your Texture subscription into this, for example!
3. Determine a pricing structure
Consider how you will charge clients (monthly or weekly retainer, hourly rate, flat project fee) and any incentives or discounts you might want to offer clients who pay upfront, or who refer you new business.
It’s also important to consider what kind of cash-flow you need to stay afloat among standard net-30, net-60 and net-90 invoice turnaround times.
At a very base level, here are 2 different ways to get some foundational pricing together:
- Find a salary that seems comparable to what you would make as an employee and boost it with a 30% buffer for taxes and expenses. Divide that number by how many hours you plan on working each week (consider billable vs non-billable hours very closely – you aren’t going to be able to bill everything back to a client) and then multiply that sum by 4 to figure out how much money you need coming in each month (and then by 52 to get a sense of what that looks like in terms of total annual income).
- Start with a number that means success to you, it could be an annual figure or an hourly rate that feels in line with your experience and your ability to get results for clients. Then do the math to figure out how that works out in terms of the number of clients you’ll need, or the number of retainers or projects necessary to get you that minimum income needed to keep going.
Once you have a monetary goal in mind that is grounded in research, you’ll be able to confidently communicate your pricing and know that you need to achieve certain benchmarks in order to achieve your income goals.
4. Investigate your relationship with money
Even with salary research, checking in with colleagues and doing the math, asking for money is rarely easy and putting down that figure on your proposal for a potential freelance client can be nerve-wracking. You want the business, and you want to avoid being seen as too expensive, all of which is connected to often agonizing issues of self-worth. By taking some time to explore your relationship with money and its connection to your value, you can refrain from underselling yourself just to get the job.
Think about this: devaluing yourself not only results in reduced income, but it will never allow you to truly achieve the lifestyle you are after, the clients you are after, and the room to do your best work (a scarcity mindset doesn’t help with creativity and or client enthusiasm).
5. Determine your key benefits
As a freelancer, you have some pretty big benefits to offer a prospective client. Among them, the value of having one person completely focused on their project rather than a big agency team, reduced overhead expenses, and less red tape. When you are clear about what you bring to the table as a freelancer and can effectively communicate those benefits in terms of increased efficiency and results, it’s possible to turn potential sticker shock into clear savings. Clients really just want to see results, so be sure that any conversations about pricing are couched with examples of how you have been able to do amazing work for other clients.
At the end of the day, there’s a number that feels good to you and sounds doable to clients. Listen for that number and then vet it against the above steps to ensure your pricing is on point.