Do people tell you to charge what you’re worth as a trainer? How does that make you feel? Are you even sure what that means? Or do you struggle to put a number on your services?
You’re not alone!
When it comes to fees and finances, one of the questions I hear most often and yet, in some ways, find the most difficult to answer is, “How much should I charge as a freelance trainer?”
There are many different factors that will influence your rates – these include your experience, the demand for your training, what you offer, the outcomes for your clients, the value for your clients, the hours you work, your clients’ budgets, and more.
Other factors will affect your pricing too – your confidence and your attitude to money, in particular, although many people don’t anticipate this when they’re starting out. How comfortable are you talking about money or making it?
One thing I’ve learned over time is that learning how to charge what you’re worth as a trainer is a process that evolves and strengthens with practice.
To help you overcome your money blocks and feel good about your rates (and talking about them) these are my top seven tips:
1. Decide on your pricing model
Do you want to charge a day rate, hourly rate or per project?
There are different pros and cons to each pricing model.
For example, charging a fixed ‘per project’ fee means that everyone has agreed on the budget from the outset and there are no nasty surprises for either party further down the line. This can help you to plan your income and quote to cover contingencies that might affect the scope of the project. One problem is that, if you underestimate the workload, you can end up losing out financially so always make sure you build in time and money for the unexpected.
There are several risks associated with charging an hourly rate.
As there are only a fixed number of hours in a day, you will quickly reach a ceiling on how many hours you can bill for. In addition, the hourly rate model tends to penalise you the more experienced and efficient you get at delivering your services because you spend less time and are therefore able to bill less. Clients may also worry that you’re stretching out delivery times in order to be able to invoice for more hours.
With an hourly rate, you can at least charge for the hours you work but, remember, that time doesn’t always directly correlate with value. Does it matter how much time you spend as long as you achieve results?
Some trainers and training consultants prefer to charge a day rate, committing to work a given number of days for a client and bill for that amount. This helps clients to budget and you to plan your income. It also ensures that you are paid for a full day of your time, which might include traveling to and from a client’s workplace, meetings, phone calls, etc., which can sometimes get overlooked when you invoice on an hourly basis.
2. Calculate how much money you want/need to make and work back from there
One piece of advice that experts often give about setting freelance rates is to work out how much you need to earn per month/year as well as how much you want to earn and work backward from that figure.
A good starting point is Your Rate where you simply add your target annual salary, the number of billable hours you plan to work per week, and the number of weeks’ annual leave you would like to take per year. This calculator will instantly work out the daily and hourly rates you would need to charge to achieve your targets.
If you want a calculation that’s more thorough because it includes your overheads and encourages you to think realistically about billable versus non-billable hours (i.e. time you’ll spend on admin, accounts, marketing, etc.) then I recommend Ryan Robinson’s Infographic on the Creative Live blog.
The figure you need to earn per month/year will give you an idea of the lowest rates you can set and stay financially secure – this is your Minimum Acceptable Rate (MAR). Of course, you should be aiming for more than just getting by. The amount you want to earn will give you a rate to charge or, at the very least, work towards.
If you’ve recently left employment for the world of self-employment, the Association of Independent Professionals and the Self Employed (IPSE) recommends taking your equivalent earnings as an employee and adding a third again to arrive at your freelance annual salary – this is to ensure that you can cover expenses like sick pay, holiday pay, taxes, equipment, and overheads.
3. Get comfortable talking about your rates
Many freelancers and small business owners find it incredibly hard to talk about money.
It can be helpful to talk to a trusted friend about your rates or even to stand in front of a mirror and say, “I charge £XXX per day” until it becomes so mundane and routine that you stop feeling uncomfortable about saying the words out loud.
4. Ask other freelancers what they charge
It’s worth reaching out to other freelance trainers on forums and in your networks to ask what their rates are and how they arrived at that figure. These sorts of conversations can give you insights into how other freelance trainers set their rates.
It may be difficult to get a straight answer, not because people are being deliberately secretive, but because there are so many different factors that affect fee rates.
5. Ask HR people in your network what they consider to be the going rate for training
If you have any HR managers in your network, you could reach out to ask what they would expect to pay a freelance trainer for the services you provide.
6. Ask the client what their budget is
Another approach is to ask the client what their budget is before you send them a quote or training proposal, as well as what their budget covers and what falls outside of the budget. By asking questions and understanding as much as possible about why the potential client needs your training services, you can work out the value to their company and set a rate that reflects this.
7. Identify how you add value
When conversations happen around money and training rates, it’s easy to let the client focus on what they stand to lose financially. It’s essential to move away from this to encourage the client to think about what they stand to gain.
What will they get for their money? How will your knowledge and experience benefit their business? How could it increase their revenue? Will it help with customer service and, therefore, customer loyalty and repeat business? Will it ensure that staff stay with the company and are more productive?
Write down a list of benefits for your clients and make sure that you highlight these each time you quote for your services. The key is to focus on what they will get rather than what they will pay.
Resources to help you charge what you’re worth
To help you feel as secure as possible about your pricing, I’ve put together a list of resources that you might find helpful.
- http://www.yourrate.co/ (as mentioned above)
- Freelance fees guide for teaching and training
- Advice about training rates (one of my old articles but the advice still applies)
- Essential tips on how much to charge for freelance work
- Association for Independent Professionals and the Self-Employed