The following post is an excerpt from my new e-Book series, How to Become an e-Learning Freelancer. The three volumes in the series are designed to be easy-to-use, practical guides to getting your freelance e-Learning career off the ground. Learn more here!
One of the most challenging decisions to make as an e-Learning freelancer is how much you should charge. If you charge too much, you may not be competitive against others in the industry; if you charge too little, you risk not making a profit and potentially going out of business. And if you’re just starting out as a freelancer, you have a lot of overhead expenses to cover (like computer hardware, software subscriptions or even bookkeeping fees)!
To complicate this decision even further, you may find that there are many other freelance e-Learning Designers charging rates so low that it’s hard to imagine competing. So this week, I’d like to talk about deciding what your initial rate should be, and how to position yourself to stay competitive with e-Learning “Hip Discounters,” the people in our industry who charge next-to-nothing rates.
Next week, we’ll tackle how to migrate from charging hourly to charging by the project, and why eventually it’s a good idea to sell value instead of selling hours.
Charging by the Hour: the Good, the Bad, and the Ugly
Charging by the hour is typically most useful for freelancers who are just getting started. When you’re first launching your freelance e-Learning career, you’ll need to start by answering a big question: How long does it typically take me to complete a course? This is important, because you’ll want to make sure that when you provide a client with an estimate that it’s as accurate as possible. If it takes you between six and eight hours to complete a course at first, you can then compare what you would make from building a course at various rates.
For example, if you know that a course takes you eight hours, and you were thinking about charging $20 per hour, you would essentially be getting paid $160 for one course. That may sound reasonable, but when you factor in all of the costs you incur as a business owner (remember, you’ll need everything from a business license to a hosted portfolio website), $20 quickly starts to seem unsustainable.
[This topic continues in my e-Book series, How to Become an e-Learning Freelancer.]