You’re in the wrong place if you want to get rich.

Freelancing can be a great career if you build up a clientele that knows you and respects you. But you have to have the discipline to set reasonable pricing and turn down jobs that don’t meet your criteria.

This will be an ongoing battle in your career, especially during the “famine” part of the freelance feast-or-famine cycle. You might be tempted by lowball freelance postings and lowest-price-wins “bidding” websites, and if you want to slowly starve while developing carpal-tunnel syndrome, go for it. But those jobs won’t work for your long-term financial, physical and mental health, and they don’t lead to the mutually beneficial relationship that you can have with a client who respects you.

It costs more to be a freelancer than it does to be an employee.

In a full-time job, your employer pays your salary, plus benefits such as sick leave. They also pay for office space and tools such as a computer, desk and supplies. As a freelancer, though, you usually work from home and must buy the equipment and supplies yourself. And you can only bill for your output, so if you get sick or take time off, you don’t earn.

Your billable hours and/or your flat-rate and/or per-word billings have to cover your income, supplies and also the time spent marketing your services and doing all the other things you need to do to run your business. So if you charge out your work at the same hourly rate as you’d earn in a full-time job, your actual earnings over the same number of work hours will be a great deal less.

That’s why freelance hourly rates are generally two to three times the hourly rate paid to a full-time employee at the same level of experience.

Set sustainable rates and keep them in sight.

The Periodical Writers of Canada (PWAC) publishes a guide with some broad rate ranges. To set yours, start by reviewing the guide, and then set your rate wherever on the spectrum your skillset sits. You can adjust it as you build more experience and expertise, but it’s a good place to start.

Costing and scope creep

Often clients will want a fixed fee before they agree to hire you. You can figure that out by estimating the hours it will take you to do the job, then multiplying that by the rate you’ve set. And when you submit your estimate to the client, make sure you spell out the scope, which is everything the price includes. “Scope creep” – small requests, tweaks, or extra calls and meetings – can add extra time and work to the job, and if it’s not clear from the start that it’s billable (and at what rate), you may not get paid what you think you deserve.

Lowering your rates and turning up the volume

If you’re getting satisfying work at the rates you’ve set, keep doing what you’re doing. But there are a couple of situations where there could be a benefit to providing a small reduction.

1. An agency hires you to work for a third party
There are companies that act as “temp” agencies for creatives, plus there are actual marketing and advertising agencies that may want you to work for them. Some will set the rate and ask you to take it or leave it and will bill you out at a higher rate. Others will ask you to name a price, and then ask you to apply a discount so that they can mark it up. Both options are fair. In each situation the agency is doing the sales for you, so they’re entitled to compensation. And if the gig goes well, they may keep sending you work that you don’t have to do unpaid work to get.

The same things apply if another writer subcontracts to you. And by that same argument, if you subcontract to someone, you are entitled to ask for a discount or mark them up because you’ve done the sales work.

2. Large jobs, long-term contracts and bread-and-butter clients
Would you rather earn 100 percent of your rate for five hours, 80 percent of it for 20 hours or 75 percent on an ongoing, open-ended basis?

If you’ve got enough regular clients at 100 percent, the answer is easy and you can skip this section. But it takes work to generate new clients, and that’s time you can’t bill for. So, if you meet a prospective client with long-term work available, a slight drop in price might be an incentive to hire you. It’s also a good sales tactic to drop rates a bit when you’re pitching a larger project. For example, if you charge $1,000 for a single brochure and the client asks you about your cost for ten brochures, you could offer to do the jobs for $8,000  or even $7,500, as a “volume” price. Also, chances are that the first brochure has a greater learning curve than the tenth, so it’s probably not going to take you ten times as long to do ten.

In general, you should get the best rates you can. But there’s also something to be said for having one or two regular clients at 75 percent of “the best” who trust that you’ll treat them fairly and don’t make you pitch for every gig.

Good rates and good relationships

The secret to success as a freelancer is relationships. There are many factors involved in building them, but fair fees are a big part of building trust. If you agree to a price that’s too low, you’ll grow to resent it. But if you go too high, your client may not give you much work and/or may hire someone else. It’s a tough balance, but as you build your portfolio of work, you’ll get a better sense of what’s reasonable for your experience and interests.

Heather Finley is a marketing writer and copywriting coach who delivers quality service at the right price.