How to Price a New Service - Why I should charge per project?

The most common question I receive from aspiring freelance writers is this: “What should I charge?”

It’s hardly an inquiry unique to writers – it is an important consideration for freelancers of every stripe, in every niche, from lone individuals to larger firms and agencies.

Pricing your services effectively is a vital component of any successful business, and negotiation is key to getting you the best rates possible. In this post I will give you my top tips so that you can approach any pricing situation with confidence.

Why You Should Charge Per Project

Many people think that they should charge for their services on an hourly basis, but this is often a big mistake. However sensible charging per hour may seem, it will ultimately hinder your business. There are two key reasons why you should charge per project.

First, doing so maximizes your earning potential. When you charge per hour, your income is limited by the amount of time you are able and willing to work. The only ways to make more money are to charge more or work more.

But when you charge per project you open up a third avenue to bigger profits: speed. If you learn to work more efficiently, producing the same quality of work in less time, you will be able to complete a greater number of projects without having to work a greater number of hours.

Second, charging per project builds greater trust between you and your client. It allows you to be upfront about costs. But when you charge per hour, they don’t know how much they’ll have to shell out the project has been finished. By setting rates based on work completed rather than how much time the work takes, you’ll be able to give the client an upfront indication of costs.

Charging per hour can warp a client’s judgment in other ways. Consider these two options:

  1. You tell your client that a specific service will cost $100.
  2. You tell your client that you work for $50 an hour and that this project will take about two hours, meaning the final price is going to be $100.

The vast majority of people are psychologically predispositioned to prefer option one – so long as they get what they want and think it’s a fair value, they’ll pay.

But the second option introduces an additional point that could dissatisfy them. A client might think that $50 an hour is too much – even though they’re more than happy to pay $100 in the first scenario. People can often operate from a position of illogical reasoning, so it’s best not to give them more ways to do so.

How to Determine Your Rate

Once you start to operate on a per project basis, you will be faced with the prospect of setting a new rate for each prospective job. You’ll want to keep in mind both your desired equivalent hourly rate and every unique aspect of the job itself. This can be a challenge, but it is also an opportunity.

Considering the right factors when setting a rate for your service will enable you to leverage your skills to get the most money possible for the time you work.

Here are the four main factors to keep in mind when deciding your rate:

  1. The market. What others are charging for a similar service shouldn’t dictate your prices, but it will help you figure out a general range of what is reasonable.
  2. The quality of your work. How good are you at what you do? Clients who need better quality should be willing to pay more.
  3. Your reputation. No matter how efficient and skilled you are, many potential clients are leery of newbies and more open to those with a proven track record.
  4. Your negotiating skills. All of the other factors will combine to give a range of what sort of rate you could get for your service. Effective negotiators will be able to get the top rates possible for the type of work they’re doing.

Your rate will be found at the intersection of these four factors.

The market is completely out of your control; you’ll just have to understand what’s going on in your industry and adapt to those forces. But here’s the good news: the other three factors are all variables that you can have a positive impact on change.

Providing a quality service is something you can constantly strive to do, and if you are successful, a good reputation will follow. Reputation does, however, stem from more than just doing a good job. Satisfying your clients’ expectations will help create personal demand – because people will know that you do a good job, they’ll start to seek you out specifically. Being known online also helps – to that end, I recommend that you build a solid online brand via your website, blog and social media accounts.

Finally, remember that rates are never permanent. You can always set a new rate for the next client that comes along. Even if your service must involve public pricing on your website, you can always raise prices across the board if you think that doing so is a good business strategy.

How to Negotiate Effectively

Given that negotiation is the stage in the process where you can take stock of every other aspect of your situation and use them to your advantage, the skill deserves a closer look.

Good negotiators will look at the issue from both perspectives: their own and that of their client. You will have a certain minimum rate in mind, as well as other factors that influence what you think is a fair rate for a specific project.

You’ll also want to view the situation from your client’s point of view. Always ask yourself: how will your work benefit the client? What will it do for their bottom line? Once you learn to walk awhile in your client’s shoes, you’ll have an easier time persuading them to choose the path you offer.

Keeping in mind the factors discussed in the last section, make sure that you set a reasonable rate for your services. If you discuss that with a client, one of three things will happen:

  1. Outright refusal
  2. Negotiation
  3. Acceptance

If the client refuses your fair offer with no possibility of further discussion, that’s ultimately good for you – it’s frustrating to work with such people and it’s unlikely that they fairly valued your skills. On the other hand, if your client accepts your rate, you’re sailing smooth and don’t need to worry about negotiating.

Those clients that want to negotiate further will generally be willing to do so in a reasonable manner. But it’s still important that both of you are 100% clear on what the expectations are. Only once you know the scope of works can you set a fair rate and negotiate effectively with the client.


Freelancers across the board must be able to set sensible prices and negotiate good rates. A good first step is to switch from charging per hour to charging per project – a move that will open up new opportunities for you.

Once you have done that, consider the four key factors of pricing: the market, the quality of your work, your reputation, and your negotiating acumen. Examining the intersection of these forces will help you determine a good rate, and a solid negotiation strategy will secure the best rates possible for you.

Are there any other factors you consider when determining pricing? What strategies have proven effective in your negotiations? Let us know in the comments below!