I’ve been a freelance writer for five years, and in my opinion, I think one of the biggest challenges is pricing projects correctly.

Freelancers are normally self-employed. They have to look for contracts and satisfy their client’s needs. Moreover, freelancers often apply for opportunities featured on job boards. Most clients have a budget in mind, and they’ll set the price for an assignment. Based on the compensation, freelancers can choose to ignore or apply for the assignment.

A few clients are clever. They don’t include compensation in the ad. Instead, they’ll ask all applicants to quote a price. I dislike these kind of job ads for two reasons.

• If you don’t know the client’s budget, there’s a chance that you’ll undersell yourself. In other words, you quote a price for the project, but the client is prepared to pay twice or triple the amount.

• You’ll likely be undersold by another freelancer. For example, you quote a price within the client’s budget, but lose the bid because someone else can complete the assignment for less.

The Instigator Blog offers several great tips on how-to price freelance projects successfully. Some freelancers have set prices for all assignments. While this method is quick and uncomplicated - it’s a big risk.

It’s best to determine freelance rates on a project-by-project basis. A few assignments are straightforward and require little research, in which you can charge a set price per word. Then again, an in-depth 300 word piece might take three or four hours to research and write. In this case, you’ll earn more with an hourly rate.

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