Pricing 101: How Much Should You Charge as a Freelancer?

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Hey Burnt Out Freelancers, it’s time to talk pricing strategies!

In this episode, we get real about the confusion around hourly rates vs monthly retainers vs service packages.

As newbie freelancers, they had no clue how to determine their rates. Tracking hours and constantly billing hourly clients was a pain. There had to be a better way...

Turns out, transitioning to defined service packages and retainers is the secret to predictable income and scaling your rates.

TL;DR:
☕ Why hourly billing is great for starting out but has major downsides long-term
☕ How packages create reliable monthly revenue streams from bundled services
☕ When retainers make the most sense for less routine project work
☕ Strategies for calculating your rates based on expenses, profit goals, and experience
☕ Tips for gradually increasing rates by bracketing new clients at higher prices
☕ The importance of knowing your worth and resisting discounting just to win clients

If you’re struggling to determine the best pricing model for your freelance business, this episode is a must-listen! Follow along for laugh-out-loud real talk on finding an approach that maximizes your income and sanity.

You’ve got this! Now push play + let’s talk money 💰

💾 Check out our favorite Project Management and daily digital planner - Sunsuma! Sign up for a 30 Day Free Trial and make work-life balance a reality so you can feel calm and stay focused.

Just ask one of our VA besties who we turned onto it:
"Sunsama has been a LIFESAVER for tracking billable hours and reducing my ADHD executive function struggles. I'm overjoyed with it!"

Our Service Guides:
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LaTara’s Services

📬 Let’s be penpals - send us your questions, feedback + all your deepest darkest secrets here - imtired@theburntoutfreelancer.com

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Platforms We Love!
Molly likes Freshbooks
LaTara likes Honeybooks 

Transcript

Molly Block: [00:00:00] All right, everyone. Welcome to another episode of the Burnout Freelancer podcast. I'm your host Molly Block, here with 

Molly Block: my co-host LaTara Dunn. 

Molly Block: In today's episode, we are diving into one of the most confusing parts of becoming a virtual assistant. How the heck do you set your rates and package offerings from calculating your true hourly costs to picking price points for your services Pricing?

Molly Block: Your VA business can feel like you are winging it in the early days, and you can feel overwhelmed due to the fear of thinking. Clients will say You charge too much. As a former burnout VA ourselves, LaTara, and I remember all too well those early days of slap in random numbers and services and just hoping for the best along the way.

Molly Block: We learned that strategy does not typically end well. Since then, we have been able to refine our rates and services. 

LaTara Dunn: And by the end of today's episode, . You'll have our tips and recommendations to determine your ideal [00:01:00] hourly rate. Or if you're going to want to do a retainer fee. How to package up your offerings and when to reevaluate your pricing, see if you are overcharging or if you should be increasing your prices and how to communicate your rates. To your new potential clients. And also if you're going to raise your rates on your current clients. So we cannot wait to talk more about that in detail, in today's episode with you. All right. So Molly, let's kick off by talking about what should we do you know, should we go with hourly or retainers? And then. What is a package so can you kind of unpack that a bit

Molly Block: This is an important topic because I think when people first start out, these different . Titles can be confusing. And so just to give you guys a little outline is gonna be something like preset bundles of services at a fixed price.

Molly Block: This is something that [00:02:00] is a routine offering . , say for instance, general admin, calendar management, email management, scheduling appointments, that's something routine. You're gonna do the same thing every month, so that would be a good. Package for a client. Hourly is you're given tasks.

Molly Block: You use a time tracker, track all the hours for the tasks and you bill your clients in whatever, billing cycle you have. So whether it's weekly, biweekly, monthly then retainers, . Is, that's when clients are gonna pay you upfront a monthly fee agreed upon tasks, ongoing.

Molly Block: for the retainers, are tasks, could be. Something that's, it's not routine. So this could be you building a landing page, an email funnel, things like that we're gonna dive into explaining those a little more and giving you guys some other tips 

Molly Block: today. 

Awesome. Okay. So as we talked [00:03:00] about in the beginning, I started out at 15 an hour. I do not charge anywhere near that anymore. I would not do anything for 15 an hour because I know my worth and my qualifications now, because I've grown over time.

My skills have obviously increased. I have more of an expertise in my certain type of space here in the digital marketing world. Um, when it comes to design and building funnels. however, when I first started, I was offering a lot more. random things and tasks, trying to figure out where I really wanted to be and where I wanted to go and how to grow my skills.

So I only charged 15 an hour. However, I quickly realized I should be getting paid more than that. So I upped my hourly rate every three clients until I got to an hourly rate that was high enough, I thought, and And then at a certain point, I felt it was time to move on to retainers.

So then I started swapping my newer clients onto that retainer model, and I no [00:04:00] longer offered the hourly rates. so what I would do is I would send them packages and, I would no longer have those hourly packages on my proposal that I would send to them. 

Molly Block: Yeah, when I first 

Molly Block: started, oh my gosh. 

Track 1: Um, 

Molly Block: I think one of my 

Molly Block: first they did pay me, I guess you would say, a package rate, but when I broke down the hours, like later on, I think I was getting $8 an hour.

Molly Block: yeah.

LaTara Dunn: that's kind of what I

LaTara Dunn: figured out Molly. I realized I was actually making way less. And I wasn't that good at tracking my time either, because remember, I was like flopping back and forth from client to client. So I wasn't really, I probably was 

LaTara Dunn: undercutting myself a lot when it came to how many hours I actually was working.

LaTara Dunn: Therefore,

LaTara Dunn: I was making that lower amount because I wasn't charging them for the appropriate amount of hours. 

Molly Block: Yes, I'm the, I'm the same way. I didn't track my hours 

Molly Block: properly. 

Molly Block: I 

Molly Block: was just excited to get jobs [00:05:00] 

Molly Block: and was like, Ooh, someone's giving me two. Hundred dollars. And again, when I first started, it was literally the beginning of Covid, and I started full-time and I just took whatever I could. And then later when I looked at I'm like, oh, wow, I, I worked a lot of hours for no money, 

LaTara Dunn: Yeah. Yeah, exactly. It sucked a lot. 

latara_1_10-20-2023_101806: Um, 

LaTara Dunn: you know, I used those platforms where you can 

LaTara Dunn: track your time or 

LaTara Dunn: whatever, and when I started really 

LaTara Dunn: paying attention to 

LaTara Dunn: it, I was just like, no, this isn't gonna work. This needs to change.

Molly Block: Right, and I didn't factor inall the things that you need to factor in because I just started,

Molly Block: have a background in customer service. I've done it, uh, God going on 18 years, which sounds crazy. Um, but like I, I still offer a customer service stuff and I do a lot of random stuff, so I don't packages as much or 

Molly Block: [00:06:00] retainers as LaTara does because 

Molly Block: I kind of flip flop with my clients.

Molly Block: I do a little bit of this, a little bit of that. 

Molly Block: but now when I price things, you know, especially if I'm doing general admin, if I'm being the face of their business with customer service, I do take into consideration in that, my skills and customer service. I'm a bombass customer service representative

Molly Block: that's what I know and, know, I factor in my expertise. and my hourly rate, reflects that I, I take into consideration the qualifications that 

Track 1: I have. 

Molly Block: Um, and another thing that I, I'm sure I can speak for LaTara as well. When

Molly Block: I say this, when I first started, I didn't factor in Expenses for my business, 

LaTara Dunn: Right, exactlY. Neither did I, I I just started adding onplatforms that I needed to pay for as I grew, but I didn't take those expenses into 

Molly Block: right, like I was paying for, you know, let's say I, I pay for Canva Pro. I paid for [00:07:00] my internet, like for my computer to work. .I never factored that in. That never even crossed my mind. 

Molly Block: you know, and, literally a folder in my 

Track 1: Google, 

Molly Block: um, email that is just for platforms I pay for. For my like to be able to for taxes, but to be 

Molly Block: able to 

Molly Block: pay for 

Molly Block: A, B, C, D.

Molly Block: I need to factor that into my pricing.

LaTara Dunn: Yeah, you do. And 

latara_1_10-20-2023_101806: 

LaTara Dunn: and like we've said in the very beginning, you know, maybe you're really listening to this episode and you're just starting out. We have prev, 

latara_1_10-20-2023_101806: uh, 

LaTara Dunn: episodes like episode one and two where we talk about how. You don't need any money to start out this, journey by work starting your own business.

LaTara Dunn: However, as you grow, you will realize like, Hey, I kind of need some expenses because you know you've gotta pay because you're collecting all your money. You're gonna owe taxes at the end of the year whenever taxes are due. So you're gonna need those expenses anyways, but you still need to make sure that those are being covered. Right, 

Track 1: right.

LaTara Dunn: so what about, [00:08:00] you know, if we're deciding, okay, I wanna start niching down a little bit. I wanna have a specialty, I think I wanna start offering some packages. Different level types of packages and whatnot. Should I have a set package or should I do an a la carte thing? is it gonna be a monthly retainer?

LaTara Dunn: Is it gonna be just a project price? what I did when I made the switch is I offered way too many a la carte I would like send someone, oh my God. It's like you send them everything, which means you send them nothing. Right? So I would send too many. Things I would say that I could do too many things because I wasn't, , keeping the value of my worth and my skills, and I just would literally list everything and price it out or whatever, and it became overwhelming and the client would come back to me. And say, I honestly don't know what I should pick. you, have a lot on here. Can you suggest , a little more [00:09:00] in depth as to which one I should pick because I wanna work with you, but I, I just don't know, you know, and I don't wanna pick something that isn't gonna cover my needs, right.

LaTara Dunn: So I. Realized quickly that by offering a bunch of stuff on your guide wasn't helpful, you can always add things on after they start working with you. And I have found that that works really well. it's almost like starting out slow, right? Like you don't need to just go all in, all at once. And that will help extend your services with them. 

latara_1_10-20-2023_101806: 

LaTara Dunn: so now I only have three offerings And that's it. And it's tiered. So it's a basic level. And then a mid ground, that's like my most popular. And then I have one that's more, 

latara_1_10-20-2023_101806: Higher level work And I have a starting rate for that.

LaTara Dunn: And

LaTara Dunn: then when we have our 

LaTara Dunn: call, I figure 

LaTara Dunn: out, you know, how much more it's going to be. But they know, it starts at 

LaTara Dunn: least at X amount of dollars.

Molly Block: And I like that because it doesn't confuse the client. [00:10:00] And I've definitely that too. , I had everything on mine. I had hourly, I had this package, I had that I. And people did the same thing. They're like, can you tell me what I need? I'm like, wait, this isn't this isn't right. This is making it harder for my client .I need to narrow it down. But I love what 

Molly Block: you said, LaTara as far as 

Molly Block: starting simple, offering only a few packages once you've, you 

Track 1: know, 

Molly Block: , excelled in the freelance world, and then you can always add things on. 

LaTara Dunn: Right, right. 

latara_1_10-20-2023_101806: 

LaTara Dunn: yeah. And something that's cool about the platform,

LaTara Dunn: HoneyBook that I use is when you send them proposal, You can actually add in this little, upsell.

LaTara Dunn: And so when they're going to pay and it, it could be something that you've talked about on your call, but you've now agreed like it's not a part of this package or whatever. You can add a little upsell inside that proposal and they can add it if they want to. And sometimes that works for me and they add it on or they're like, Hey, I'm gonna keep this [00:11:00] in my back pocket because I think maybe in a couple months we could totally tackle that.

LaTara Dunn: so it's kind of 

LaTara Dunn: previewing they need 

LaTara Dunn: to make more decisions. cause they want it to be super simple and easy and not

LaTara Dunn: overwhelming.

Molly Block: Yeah, yeah, I totally agree 

Molly Block: with that. 

Molly Block: And, 

Track 1: um, 

Molly Block: HoneyBook is a great platform. I mean, I don't personally use it, but 

Molly Block: the more LaTara talks about 

Molly Block: it, I'm like, maybe I should be on 

LaTara Dunn: It's really great. It's really great. Check out our, check out our link in our show notes. We have a code so you can try it for free and just check it out. 

LaTara Dunn: it's awesome because you can make everything on it, and it, it's super seamless. So it's like you send them the brochure of your offerings, they click what they want, then they can, it's automated. So then they get that invoice and your contract and whatnot. They pay, they sign and then it automatically asks them to

LaTara Dunn: book the onboarding call, and then they get their welcome packet email to them. So it's a really simple workflow. And you know, I'm all about automations [00:12:00] because you want to keep your personal life 

LaTara Dunn: first and foremost, and when you, these things are automated, you don't have to worry about this kind of stuff happening in the middle of bedtime or dinnertime.

Molly Block: a no 

LaTara Dunn: yeah. . yeah, Check out our link so you can try that out. And then, 

LaTara Dunn: Molly, when, what about, when you're first starting out, and I said a little bit, but I would love to hear your thoughts on this. You know, I did start out charging only $15 an hour. How Did you go about raising your prices 

LaTara Dunn: and 

LaTara Dunn: did that affect you when it came to attracting more? Did you see a

LaTara Dunn: decline in 

LaTara Dunn: bookings when you raised

LaTara Dunn: your prices? 

Molly Block: Surprisingly I didn't, and I was scared. I was to raise my rates. I was scared to hear a no. I'm like, I'm not, I've said this before, I'm not a confrontational person. So like, especially if someone was a referral, I'm like, oh God, I them my price is higher. But, It's okay to start out low, like [00:13:00] everyone starts somewhere, 

Molly Block: But what I did is used my lower rate experience to build my portfolio, grab testimonials,which are super, super helpful when you're trying to land a bigger client so they can you've helped, you know, your previous clients, current clients. And then as I gained more experience, 

Track 1: I raised my rates. 

Molly Block: , I did not reevaluate as often as I should have,

Molly Block: because I still was learning all the skills and I was, I was afraid I had the impostersyndrome. I, didn't feel confident enough to say, 

Track 1: I'm 

Molly Block: charging X amount, uh, an hour, or I'm gonna build this 

Track 1: portfolio. 

Molly Block: grabbing the experience in the beginning was so helpful, and I noticed my confidence grew over time and as my new clients, came in, I didn't have the worry of saying, this is my rate. [00:14:00] you know, I, I felt confident saying that because I knew the platform they, they wanted 

Track 1: me to work on, or, 

Molly Block: um, I felt confident in making the graphics or howthat 

Molly Block: confidence led to me gaining

Molly Block: higher level clients. 

LaTara Dunn: Right, exactly. And

LaTara Dunn: having higher level clients is so incredibly amazing. 

Molly Block: Yeah. And. It's okay if you don't get them right away because you're probably not. You need, you need the experience and the knowledgeto be able to confidently retain those higher end clients. And so just as a reminder, it's okay to start off low hourly.

Molly Block: And just gain the experience and ask 

Molly Block: for 

Molly Block: for 

Molly Block: testimonials. 

Molly Block: I've never had a client say to me like, I'm not giving you one. Everyone's been totally willing 

Molly Block: to, and then you build 

Molly Block: a

LaTara Dunn: Mm-hmm. . Yep. 

latara_1_10-20-2023_101806: I love it. 

LaTara Dunn: Yeah, I was super, I was still scared in the beginning when I was raising married, so I raised my rates [00:15:00] every three clients and because my skills were increasing and I still was nervous, right? when that fourth client came along and my rates little bit more, I'm like, oh God, they're gonna say no.

LaTara Dunn: Like, ugh. And something that I learned from the very beginning, very quickly, is the clients that are willing to invest more money are actually the ones that leave you alone the most. They're, and when I say that, what I mean is they're not as nitpicky. They're not penny pinchers. They're not asking for a million edits. They just want you to solve their problems. It's all they want. They, they don't want Be investing more time and more energy and more of their thought process

LaTara Dunn: into what you are doing for them, because it's your job to do it And so they're willing to pay more money if you are gonna solve their problems for them and you're gonna get this work done. And , then when they, leave you aloneThey, they realize that the work gets done quicker.[00:16:00] 

Molly Block: Right.

LaTara Dunn: I And they save way more time in the end. So I once I started raising my rates and I was getting those clients that were paying more money, I noticed a huge difference in how those clients made me feel. like my anxiety and stress level went way down compared to the clients that paying me less because they were. Checking in all the time and asking for a million revisions and, and I just felt like the value of my work was declining and my worth because it would just never end, you know. And I wasn't. And then when I was making that swap over to those packages and my packages were low at first, they, they were the, my first package was, 

LaTara Dunn: , $400. And that really isn'ta lot in retrospect. 

latara_1_10-20-2023_101806: 

LaTara Dunn: in the end, if we broke it down to like what I was making an hour, I wasn't making [00:17:00] anything. I should have just been making them pay me the hourly rate at that 

latara_1_10-20-2023_101806: point. 

Track 1: Right. 

Molly Block: And um, so I know in the beginning you raised your rates every three 

Molly Block: clients. So now how often do You 

Molly Block: reevaluate your

Molly Block: packages and retainers? 

LaTara Dunn: Yeah, so

LaTara Dunn: honestly about every three months I'm looking at it and I'm seeing how things are going. You know, have I, because also I do a quarterly review with 

LaTara Dunn: my expenses. So I feel like every three months is a good timebecause it also reminds me like, Hey, are you now paying for more platforms? Have, are you paying for less platforms?

LaTara Dunn: You know, have your expenses increased? Um, how many hours do you have in a day to give to your business? You know what I mean? So I think it's really 

LaTara Dunn: great to do it 

LaTara Dunn: you know, 

LaTara Dunn: your rates have been pretty

LaTara Dunn: steady for a while, 

LaTara Dunn: just to do like a business business 

latara_1_10-20-2023_101806: checkup.

Track 1: Yeah, [00:18:00] 

Molly Block: I agree with that. I

Molly Block: mean, because this industry is always evolving, it's always growing, it's always expanding. New platforms are always coming out. 

Track 1: And, 

Molly Block: you reevaluate and make sure that your even hourly rates are progressing with freelance world and the economy. 

LaTara Dunn: Yeah, it's true. ,

Molly Block: So you need to really figure it out, like, okay, how much are my bills? What do I need to bring in for income to cover these bills? and then cover my work expenses, and then how much of a profit will I make off from this? So what is my cushion gonna be? And then also you have to remember, you need to be saving 30%, which I will say, I don't do, I am so bad about that. And 30% of your income isgoing to taxesbefore any of those write-offs are calculated. Right? Like you have to pretend you don't even have the write-offs and 

LaTara Dunn: So that also leads to like, [00:19:00] don't undervalue yourself. You know, if you are super booked out and you just have a wait list going, 'cause people keep flocking to you, clearly they can see your work is really good.

LaTara Dunn: But a conversation you need to have with yourself? Is. Well, is it really good? But , are you not charging enough? Are they coming to you because your prices are inexpensive to them? So you know, you don't wanna burn yourself out by having 

LaTara Dunn: this heavy client load. 'cause then your work will go 

LaTara Dunn: down.

LaTara Dunn: So are you giving your time enough value? 

LaTara Dunn: maybe you do need to raise your rates for that.

Molly Block: Yeah, and something we could probably talk an 

Molly Block: entire episode about is . When you raise your rates, do you raise them with your current client? 

LaTara Dunn: Right. 

LaTara Dunn: Yeah.

LaTara Dunn: That's a big 

LaTara Dunn: one. 

Molly Block: 

Molly Block: I, I don't have too many people on my 

Track 1: old rate, 

Molly Block: um,but I've just been with them for a while, so I just, I almost [00:20:00] like grandfather them in you can do whatever you wanna do.

Molly Block: However it feels to you if you need to raise your rates with current clients, you know, that's totally a conversation that you can have. And again, we could dive into a whole episode about it, but . At the time being, I have not, have I done it in the past? I have. And the conversation scared me, 

Molly Block: but it ended well because the clients said to me, 

Molly Block: I see your growth.

Molly Block: I see, you know, value in what you're saying right now. You telling me $5 an hour more? I can see that 

Track 1: 

Molly Block: But I just, I haven't, with the few clients that I have at my old rate, I, haven't done it and 

Molly Block: I, I don't think I'm gonna, I, think those, I'm just like grandfathered in and anyone new I, I tell that's what it is. 

LaTara Dunn: Yeah.

LaTara Dunn: so 

LaTara Dunn: my prices have been pretty solid for a while now, so I'm not as, I don't have to have these conversations anymore, but I did, and 

LaTara Dunn: you don't owe them. Any [00:21:00] explanation, just like when you walk into a store and a price went up, the store don't call you and say, Hey, we're raising our rates this week, just so you know, f yi.

LaTara Dunn: Or, Hey, we're gonna up the gas another $2 tomorrow. Just so you know, when you come out today, fill up now. Like, no, I I don't owe them any explanation. My prices are increasing, and I'll say something like, My expertise has gone up. You clearly can see how my work has improved from when we first started working together.

LaTara Dunn: These are my, now my current rates starting next month. This 

latara_1_10-20-2023_101806: is what your, 

LaTara Dunn: fees are going to be. 

Track 1: Right, 

latara_1_10-20-2023_101806: and that's it. And I did that with a lot of people when I was in that transitional period. And almost all of them were totally okay with it. and because they could see what I was doing was helping them you know, and so I always just give them a, I think it's Part of like my integrity, giving them that 30 day notice.

latara_1_10-20-2023_101806: So if they decide they don't 

latara_1_10-20-2023_101806: want to

latara_1_10-20-2023_101806: continue 

latara_1_10-20-2023_101806: services [00:22:00] with me, if that's not a part of their budget,

latara_1_10-20-2023_101806: that then gives me time

latara_1_10-20-2023_101806: to fill

latara_1_10-20-2023_101806: that space.

Track 1: Exactly. And. The last thing we wanna mention here, and I think it's one of the most important, is be confident in your pricing and don't lower your rates just to land a client. I know that can sound a little conflicting from what we said as far as in the beginning, as a beginner, you're gonna start out at lower prices and everything like that, but I think of it as, you know, you've been a for a little while.You're in a lull and you're thinking of lowering your prices just to get clients. Don't do it. Um, 

Molly Block: 

Molly Block: So as a summary, 

Molly Block: you know, in your lull's it's gonna happen. As a va, don't undervalue yourself. Stick to your your rates, stick to your worth. and always ask for those testimonials.and adjusting your rates as need be, as your skills 

Molly Block: improve.[00:23:00] 

Molly Block: always reevaluate. Be conscious of that and just 

Track 1: don't 

Molly Block: undervalue yourself. Um, Because the longer you do this, you're gonna grab skills that you 

Molly Block: didn't even know were possible . So 

LaTara Dunn: 

Molly Block: I would've never thought that I would be here today when I first 

Molly Block: started this.

Molly Block: you're gonna keep gonna keep growing, and your packages are gonna keep growing as well. So don't undervalue. Always stick 

Molly Block: truth, 

Track 1: stick 

Molly Block: to your rates. And 

Molly Block: we really hope that our insight in this episode was helpful for you. And 

Track 1: as 

Molly Block: always, please follow us. Apple Podcasts, Spotify 

Molly Block: Thank you for being with us 

Track 1: today, 

Molly Block: and, on Instagram. Let us know if you have any questions. We'd love to stay connected. So thanks for joining us today.

LaTara Dunn: Bye everyone. Can't wait to talk to you next week.

Molly Block: Bye.​