PSA: I’m conducting a free workshop about contracts for Singapore-based freelance creatives on 22 May. More details below if you’re interested!
Last month, I was a guest speaker for the Arts Acceleration Programme, jointly organised by the National Arts Council Singapore and United Overseas Bank FinLab.
The session I was in was called “The Art of Business as an SEP”, and it covered strategies for turning what you love to do into a profitable business.
While I wasn’t the main speaker (startup instructor Patrick Ng was him!), I shared my freelancing journey and facilitated a breakout session for identifying your target client. Actually, you would know, since you were there 😉
Before the session, I worked with Patrick to tailor his venture creation slides for a freelancer audience. This included providing input on value-based pricing for freelancers, which I thought I’d share about today!
That’s because if you’re new to freelancing, you might take a cost-plus approach to pricing. In other words, you calculate your rates like this:
Your costs for providing your service (e.g. hourly rate and equipment costs) + a profit margin on top of that
But if your clients will get a lot of value from your service—much more than what they’d pay you under a cost-plus approach—then wouldn’t you want to get a slice of that for yourself by charging more?
So, here are some options for calculating your rates based on your value to clients, rather than what your services cost you to provide.
Market approach
Under the market approach, you’ll price your services similarly to other freelancers’ rates (i.e. the market rate). This means your value to the client = their cost of using the next best alternatives.
Using the market approach is feasible if:
- A market rate exists, which might not be the case if few others do what you do (because e.g. you provide a niche service)
- You know what the market rate is
- The market rate is sustainable, e.g. other freelancers haven’t made up their rates without considering profitability
- You know your position in the market. For example, freelance writers can charge anywhere from $0.10/word to $1+/word. If you’re a freelance writer, where within this range can/would you charge?
Opportunity cost
Under the opportunity cost approach, you’ll price your services to match the costs the client might incur if they don’t hire you.
This approach is similar to the market approach as your value to the client = their cost of using an alternative solution. But instead of the client looking externally for alternatives (e.g. hiring another freelancer), the alternative here might be to not hire a freelancer at all.
In other words: to DIY or use an in-house person for the job.
In this situation, the client’s costs might be:
- The time they spend doing the work themselves
- The salary they pay their in-house person to do the work
If you can calculate these costs, you can then peg your rates at a slightly lower amount to make hiring you worthwhile.
Income/benefit approach
Under the income/benefit approach, you’ll price your services according to the benefit the client gets from hiring you. This benefit can be:
- The revenue they’ll earn
- The costs they’ll save
For example, if you believe the client will earn $20,000+ from your work, you could price it at a fraction of that—say, 20%. So, your rate would be $4,000.
The income/benefit approach sounds great, but estimating the client’s benefit—so you can price your services accordingly—can be a major challenge.
Likewise for estimating the client’s opportunity cost or learning the market rate, actually, if you’re just starting out.
If you’re unsure how to set your rates, try asking more established freelancers for advice on the market rate and how they price their services. I find that freelancers are generally willing to help each other. 💪
And if you don’t have many freelancer friends, why not meet me and other freelance creatives at my upcoming workshop? Here’s what happening 👇
More freelancer news
Free contracts workshop for Singapore freelance creatives
In this free workshop organised by the NTUC Freelancers and Self-Employed Unit, I’ll be covering contracts for freelance creatives.
I’ll share on topics like:
- Contract terms that creatives may encounter when taking on projects, e.g. non-compete and IP
- Bargaining power: What it is, and how it affects creatives’ ability to negotiate for fair terms
- How to navigate tricky situations like scope creep and late/non-payment
- Where to get a free contract template
The workshop will be held on 22 May 2025, from 6.30pm to 8.30pm, in the Launch programme room at the National Library in Bugis.
Scan the QR code in the flyer to register for the workshop. Alternatively, use this registration link. My previous workshop for coaches was fully booked, so register ASAP if you’re keen on this one!
The registration form asks for your mylibrary username, which you’ll have if you’re a library member. Go to this NLB account services page to sign up for free library membership or check your mylibrary username if you don’t remember it.
The form also asks if you’re an NTUC member. Feel free to answer “No” if you aren’t one.
I’m working on my slides now, so let me know if there’s anything I should cover! And if you’ll be coming, reply to this email to let me know too 🙂
This post was first published in my email newsletter on 8 May 2025. If you liked it, sign up for my newsletter here:
