Today I’m answering a piping hot question straight out of the Ask Danny oven. See for yourself:
I’m honestly not sure whether you actually read/respond to the replies you request but I had some questions regarding your advice…
Many of the jobs that I see posted on Upwork are with budgets considerably under what one would consider reasonable (eg $100 for a logo design). That said, I’m honestly unsure as to how much I should list my hourly rate.
Though it may not be readily obvious, there are actually two questions here…
One is asking what to make of some of the wacky budgets you see posted on Upwork, while the other is about what an appropriate hourly rate should be.
I’ll try to tackle both of them for you here.
For starters, there are a few things to keep in mind when you’re looking at the budgets posted by clients on Upwork.
The first is that many clients don’t know what their budget should be.
They may go with their intuition, they may copy what they see other posts doing, or they might even just take a wild guess. (This is especially true since, as of this writing, Upwork makes it mandatory for clients to specify a budget for any jobs they post. In other words, they’ve got to pick something in order to play.)
People are also terrified of feeling like suckers if they overpay for something. That doesn’t mean they aren’t willing to pay well — there are millions of clients on Upwork who are happy to pay very healthy and even premium prices for the right person. But they don’t want to open themselves up to being taken advantage of, either.
It’s like shopping around for a new car. Every new car buyer knows they’re going to spend at least $10,000 to $20,000+ when they walk into the dealership. We’re all fine with that. But if we feel like some salesman talked us into paying even a couple of hundred dollars more than we should have, we feel foolish and (rightfully) angry.
This leads some clients to (understandably) lean toward the safe side when initially disclosing how much they’re willing to spend.
Then there’s the situation where a client may truly believe in their posted budget — yet they still end up happily paying more when they run into a freelancer they love (writing a great proposal helps). This is similar to the way some people walk into Costco looking for a $600 TV, and walk out with one that costs $1,200…or even more.
So while the posted budgets sometimes give some indication of what clients are willing to pay, you should often take them with a big grain of salt.
I’ve seen countless situations where a client posts a certain budget, and ends up happily paying many multiples of it (see this post for real-life examples, including screenshots), for any of the reasons listed above.
This can even happen when a client has had a history of paying lower prices. In fact such a history may be an indicator that they’re ready to pay more, especially if they haven’t been getting great results hiring at the less expensive end of the spectrum.
Personally, I try not to pay too much attention to the posted budget — with a few notable exceptions. For example, if a client posts a low budget, and makes it clear in their posting that it wasn’t an accident (example: “We will pay $X for this job”), I’ll just keep moving.
But, really, you’d be surprised at how often clients turn out to be flexible on price, especially after you’ve sent them a great proposal that gets them excited to work with you. (To see what I do when clients say “You’re too expensive,” check this out.)
Now let’s talk about how to figure out what to set your hourly rate at…
Over time you’ll get more of a feel for how high you can go (I’ve successfully charged up to $250/hr, and I’ve helped others go even higher than that), but in the meantime I’ll show you one of my favorite tricks for setting your hourly rate at the perfect sweet spot right away, without any guessing or even giving it much thought.
The best way to do this is to create a client account on Upwork, in addition to your freelancer account.
Then, start the process of posting a job in whatever category you’re working in. For example, as a logo designer, you’d start to post a logo design job.
The point of this exercise isn’t to actually post the job (and please don’t post the job unless you actually want to hire someone) — it’s to reveal the following screen that only clients are usually privy to:
Yup, this is what clients see when they post hourly-pay jobs. Which means you now know what they’ll be expecting to pay, depending on whether the job is at the Entry Level, Intermediate, or Expert tier.
Keep in mind these are just guidelines. But they’re very useful because they give you a shortcut for reading clients’ minds when you set your price. So there’s a good likelihood that you can charge at least these amounts, assuming of course that you’re reasonably skilled. (Don’t have a freelancing skill yet? Go here to see what I recommend.)
Also keep in mind that your rate isn’t set in stone — you can change it anytime you want to. You can even charge different amounts for different jobs, if that’s what you want to do. So feel free to experiment and see what works best for you.
That’s it for today, I hope you enjoyed this edition of Ask Danny. I’m going to try to do this more often so if you have a question please ask it here and I’ll do my best to answer (either privately via email or right here on the blog).
Creative Commons Image via Kārlis Dambrāns.