If there's one question freelancers have on their minds, it's this: How much should I charge?

It's a good question. Charge too little, and you're practically working for free - and you're left wondering whether that 9-5 job might be a better deal after all! Charge too much, and you'll spend your days twiddling your thumbs.

So, what the heck do you say when a prospect asks the dreaded question, "How much would you charge for..."?

Pricing's kind of a big hill to climb. We'll take it in small steps. The first step is to decide your hourly rate. Not too many clients will ask about it - although a few will.

Typically, keeping an hourly tab is for when you're doing consulting work.

For example, I have a client who's always got great ideas buzzing through her head. She'll ask me to spend some time brainstorming on how she could market a new site or product. She knows my hourly rate is $75, and I bill her in increments of 15 minutes. We've worked together enough that I bill her monthly, knowing she'll pay.

Even though your hourly rate will work well sometimes, it's almost always better - for everyone - to charge a flat fee.

Why? Think about it. If you get paid $5 per hour to rake leaves, your employer will wonder whether you're working as quickly as possible, or if you're deliberately dragging it out. But, if you estimate it'll take five hours, and charge a flat fee of $25 to rake the leaves in one yard, they'll feel better - knowing just what to expect. Now here's the beauty part - what if you become such an efficient raker of leaves that you manage to do that same yard in only three hours? You've given yourself a raise! Your ingenuity is rewarded. And your employer is still happy - because you kept your end of the deal.

The same idea holds true with your writing. Why would a client hire you without knowing how much the project will cost in the end? And why would you want your income tied to your time? A general principle is this: it's always better to get paid by results rather than by time.

However, your hourly rate is good to establish even when you're charging a flat rate for a project.

Especially when you're just starting out, it's a great way to back into your fees for projects you do often – sometimes figuring things out like an hourly rate is best done by knowing how much time you’ll need to put into the project, and charging accordingly. 

Sue LaPointe is the owner of WorkingWriterHappyWriter.com, a successful freelance writer, and writing coach. Come for a visit, and be sure to sign up for the free newsletter, Write Happy, which is full of great tips for building a successful writing business all your own.