Stop undercharging: a field guide to pricing creative work

Every creative person I know has, at some point, quoted a price, heard silence on the other end of the call and panicked into offering a discount before the client said a word. I did it for six years. This issue is about how to stop.

It is long, because pricing deserves more than a list of tips. By the end, you will have a simple way to set a price, a script for saying it out loud and a clear idea of what to do when someone pushes back.

Why we undercharge

Almost everyone who makes things for a living undercharges, and the reasons are surprisingly consistent. We price based on how long the work takes us, not what it is worth to the client. We forget that experience makes us faster, so the better we get, the less we earn. And we are afraid that a higher price will make people say no.

That last one is worth looking at closely. Yes, a higher price means some people will say no. That is the point. A price that everyone accepts is a price that is too low.

If nobody ever says no to your price, you are not expensive. You are a bargain.

Priya Nair

Step one: find your floor

Before you think about value, work out the lowest number you can afford to charge. This is not your price. It is the line you never go below.

Add up what you need to earn in a year: rent, food, taxes, savings, software, equipment, holidays and sick days. Then estimate how many hours a year you can realistically bill. For most freelancers, that is about half of the hours they work, because the other half goes on email, admin, marketing and chasing invoices.

Divide the first number by the second. That is your floor hourly rate. Most people are shocked by it. Many discover that they have been working below it for years.

Step two: price the outcome

Once you know your floor, stop thinking in hours. Clients do not buy hours. They buy results: a logo that makes their business look credible, a website that brings in customers, a video that sells a product.

Ask what the result is worth to them. A brand identity for a local café is worth something different from one for a company about to raise ten million dollars, even if the work takes the same time. Your price should reflect that difference.