I want to share a story with you. The story is of two designers.

 Both designers make roughly $6,000 per month. Both designers have equal skills and capabilities. Both designers have a similar portfolio and quality of work. Yet there is one massive difference between these two designers.

One designer is working 60+ hours per week while juggling a ton of clients. The second designer is working 20-25 hours per week while handling just a few clients.

Both designers are similar, but one works significantly more than the other. How does this happen?

The Difference Is In The Pricing

I know this because those two designers are both me. The first designer was me at the start of my freelance career. I was handling my pricing in all the wrong ways and working around the clock on many different clients to make a good livin

 

The second designer is me 6 months later. I implemented new pricing strategiesinto my freelancing career and my life changed as a result of it.  I was the same person, with the same skills and quality of work, yet I cut the amount of hours I worked by a third.

My goal with this post (and the free PDF download at the end of this post) is to share with you some of the changes I made in how I priced myself. These changes helped me earn more income in less time. If you implement these changes then they can help you do the same.

With pricing, it's not just about the money. It's about quality of life.  As you see in my example, I still made the same income. I simply worked less hours which gave me more time to enjoy life, to write and create meaningful things.

You can use pricing to increase your income and decrease the amount you work.


Most Freelancers Start Out With An Hourly Rate

I started out my pricing like most freelancers.  I charged an hourly rate for the time that I worked.

A client would come to me and I would either estimate the number of hours that a project would take, or I would utilize the time tracking software inside oDesk. This would literally track my computer activity as I worked on the project.

When getting started, this isn’t a bad way for freelancers to price themselves. You are compensated for the time that you work. If the client's scope creeps up or the project takes longer than anticipated, then you are compensated for that additional time.

But ultimately, this method of billing is limiting.  When I started pricing myself hourly I started with an hourly rate of $30hr. Over time, I kept raising my rate from $30 to $50, $60 and higher.  Yet somewhere around that $60 per hour range I noticed a major shift in my mindset.

At $60 per hour, I was beginning to start working with higher quality clients who had decent budgets. Yet I was still compensated hourly.  This all culminated in one specific project that completely changed my mindset on pricing.

Clients don’t care if it takes you 20 minutes or 20 hours to complete the project. Clients care that the work is done and it is done well.

Why Project-Based Pricing Is Better

 

After the 3-hour web design project, I realized that I was doing myself a serious injustice by billing hourly. I was getting good at my craft and I was working fast.  If I could start charging based on the project, and not the time I worked then I had a huge potential to earn more income in less time. And that is the beautiful thing about project-based fees.

When you charge based on the project, you are tying the price of the project to the client’s end result. The end result is all that the client cares about.

Just 30 days after my incident with the 3-hour web design project I came across another client. This client wasn’t through oDesk and had no preconceived notion of my pricing.

They needed a website for their business, and I was happy to provide them with an estimate.  This time I quoted the project based on a predefined scope of the work included.  I emphasized the end result of the project, and not the amount of time that I worked.

I ended up selling the project for $4250.  The website took me roughly 5 hours to build.  And this is the thing, the client walked away happy. They loved their new website.

Shifting the focus of my freelancing away from the time I worked and toward thevalue I delivered changed everything. It completely changed my income potential and how much I made.

It was at this point onward that I realized that this was the proper way to go. I began pricing everything on project-based fees.  Project-based fees helped increase my income while working far less time.  But the bigger question is: How do you come up with a price point for these projects?

Text from http://blog.careerfoundry.com/career-change/pricing-freelancer/

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