Creating an Abundant Pricing Structure
Pricing is one of the biggest things freelancers struggle with. Am I charging too much? Too little? How do I put a price tag on my craft? Will people actually pay that rate?
So much stress for something that is supposed to make your life easier! It doesn’t have to be so hard.
The Elements of an Abundant Pricing Structure
I’ve learned that getting your pricing right comes down to a simple equation that starts with one question: How much do you want to make in a year?
Let’s say you want to make $100,000 from your freelancing business this year. That’s a pretty decent number, I think – one that would allow for a lot of saving and investing into yourself and your business, traveling, and having tons of fun.
Next, how many hours do you want to work a week? 25? That’s 5 hour days, 5 days a week, or four 8 hour days and one 1 hour day – however you want to break that up is fine. You can work 40 hours a week if you want, though I don’t recommend it. You started freelancing so that you could have more time freedom than a full-time job, right?
So, let’s go with 25 hours a week, for the sake of this example. That’s 100 hours a month (as opposed to a job’s 160+ hours a month).
Now, how many months do you want to work out of the year? Make sure you give yourself ample time off to enjoy the holidays with your family, and take a vacation or two in the summer. And by vacation, I mean NO WORK, not scaling back your hours while your family is on vacation in the countryside.
People with jobs get time off (though they have to ask permission), so why shouldn’t you? Again, freelancing is supposed to give you more freedom than a job.
Alright, you’re going to work 10 months out of the year. I’ve decided for you, you overworker, you. You can split that time up throughout the year however you like.
Cool! So you’re going to work 100 hours a month, ten months out of the year. That’s 1,000 hours a year. Not bad, most people work over 1,900 a year. That’s 900+ extra hours you get to spend with family, friends, and yourself!
The Magic Number
Now we’re going to divide that $100,000 goal by your 1,000-hour year. You’d only have to charge $100 per hour and work 25 hour weeks for 10 months to reach your goal. And guess what? There are people who will pay that price, and more.
Ultimately, you’re going to make your own pricing structure that works specifically for your goals and situation. That was all just for example purposes, but feel free to adopt that pricing structure as your own, if you wish. I like to use that hourly number as a baseline – some services, like my video editing and graphic design services, I charge more for because those projects are more taxing on my brain and energy. Keep that in mind when assigning price tags to various services you offer.
The Abundant Pricing Structure Formula
So, here’s the formula to create your abundant pricing structure:
Hours Per Week x 4 = Hours Per Month x Months Per Year = Hours Per Year
Yearly Income Goal / Hours Per Year = Hourly Rate
That’s it! Super simple. You’ll be revisiting this formula as your goals change and you set your sights higher. After all, your skills will just be improving from here on out, so your financial expansion is inevitable.
If you have any questions or just want to share your experiences with pricing, feel free to comment on this post or on the @theabundantfreelancer Instagram! You can even email me at firstname.lastname@example.org or DM me on Instagram. I’m always happy to chat with fellow freelancers!