Latest / Freelance Careers with Fexingo: Independent Work, Consulting, and Self-Employment / How Freelancers Can Build a Client Price Floor
Transcript
- Lucas: You know that feeling when a potential client loves your work, says the budget is flexible, and then asks if you can do the project for about half of what you quoted? Luna: Oh, I know that feeling. It usually comes right after they say 'this is exactly what we need' and before they ghost you. Lucas: Right. And most freelancers I talk to, they either cave and take the reduced fee, or they walk away feeling like they left money on the table. But there's a structural fix for that. It's called a client price floor. Luna: Okay, I like the sound of that. But isn't that just a fancy name for a minimum fee? I've had a minimum project fee for years. Lucas: It's related, but it's more specific. A minimum fee is the lowest amount you'll accept for any project. A price floor is the lowest rate or fee you'll accept for a specific type of work or a specific client segment. And it's not just a number — it's a rule you set for yourself, tied to the value you deliver, not just your costs. Luna: So I could have a floor for strategy projects, a different floor for execution work, and maybe a floor for retainer clients versus one-off projects? Lucas: Exactly. Let me give you a concrete example. I worked with a freelance brand strategist — let's call her Maya. She was doing $3,000 branding projects for startups. But she kept getting pulled into extra rounds of revisions, stakeholder alignment calls, and competitor audits that weren't in scope. Her effective hourly rate was dropping below what she'd make at a coffee shop. Luna: Ouch. I've been there. So how did she fix it? Lucas: She set a floor. For any new client, the minimum engagement was $5,000. That covered up to two strategy sessions, a brand audit, and a visual identity package. Anything beyond that triggered a change order at $150 an hour. And she stuck to it for six months. Her per-project revenue went up 22%, and her client satisfaction scores actually improved because she wasn't resentful. Luna: That's a solid bump. But what about the clients who can only afford $3,000? Did she lose them? Lucas: She did lose some. But she also discovered something interesting. The clients who pushed back on the floor were usually the ones who required the most hand-holding and scope creep. So the floor acted as a filter. She ended up with fewer clients, but each one was more profitable and more respectful of her time. Luna: So the floor is as much about client selection as it is about pricing. Lucas: Exactly. And that's the key insight. A price floor isn't just a number. It's a decision-making framework. It forces you to define what your time is worth before you're in the heat of a negotiation. When a client asks 'can you do it for less?', you don't have to think. You just say 'my floor for this type of work is $5,000. Here's what that includes. If that doesn't work, I'm happy to refer you to someone who might be a better fit.' Luna: I love that script. But I wonder — do you think having a floor makes freelancers seem inflexible? Especially if they're early in their career? Lucas: That's a common fear. But the research on pricing psychology suggests the opposite. A clear, non-negotiable floor signals that you know your value. It builds trust. Clients actually feel more confident hiring someone who has boundaries. They think 'this person is professional, they know what they're worth, they won't flake on the scope.' Compare that to someone who says 'well, I'm flexible, what's your budget?' — that sounds desperate. Luna: Okay, you've convinced me on the principle. But how do you actually set the right number? I don't want to price myself out of the market. Lucas: Good question. Start with your costs. Add up your monthly expenses — rent, software, insurance, your own salary. Then figure out how many billable hours you realistically have per month. That gives you a break-even hourly rate. Then add a margin for profit, risk, and investment. For Maya, her break-even was about $75 an hour. But she set her floor at $150 for new projects, because she factored in the unbillable time — sales, admin, professional development. Luna: So the floor isn't your target rate. It's your minimum. And it should cover more than just your direct time. Lucas: Exactly. I'd recommend setting your floor at least 30% above your break-even rate. And then — this is important — review it every quarter. Market rates change, your skills improve, your costs go up. If you set a floor in January and never revisit it, you're leaving money on the table by December. Luna: How do you review it? Just look at what competitors charge? Lucas: That's part of it. But I'd also look at your own data. Track the projects you took that were at or near your floor. Were they profitable? Did you enjoy them? Did they lead to referrals? If a project at your floor was still a pain, your floor might be too low. Or you might need to create a higher floor for certain types of work. Luna: I like the idea of tiered floors. So I might have a $3,000 floor for template-based work, a $5,000 floor for custom strategy, and a $10,000 floor for anything that involves external stakeholder management. Lucas: That's exactly the approach. And naming those tiers — using terms like 'essential', 'growth', and 'transformation' — helps clients understand the value difference. It also makes it easier for you to say no to projects that don't meet the floor, because you have a clear framework. Luna: What about existing clients? Do you apply the floor to them too? Or do you grandfather them in? Lucas: That's a delicate one. I usually recommend phasing in the floor for existing clients. Give them a 90-day notice. Say 'starting next quarter, my minimum engagement will be $X. I'd love to continue working with you, and I'm happy to lock in your current rate for one more project.' Most clients will understand, especially if you frame it as a way to ensure you can give them your best work. Luna: And if they leave? Lucas: Then they were never really your ideal client. And you've freed up capacity to find someone who values your work at the right level. Luna: This is really practical. I think the hardest part for most freelancers will be the emotional side — actually saying no to a project that pays something but is below the floor. Lucas: That's the part that separates freelancers who build sustainable businesses from those who burn out. You have to treat your floor like a professional boundary, not a suggestion. If you wouldn't take a project from a client who doesn't respect your time, why would you take one that doesn't respect your pricing? Luna: Right. And it helps that you can always refer them elsewhere. That keeps the relationship warm. Lucas: Exactly. I keep a list of three or four other freelancers in related niches who I can refer. Sometimes they even reciprocate. It's a win-win. Luna: I want to try this. I'm going to set a floor for my content strategy work this week. I'll start with $4,000 and see how it feels. Lucas: That's a great starting point. And if you find yourself hesitating, just remember: a client who balks at a reasonable floor probably wasn't going to be a long-term partner anyway. Luna: Speaking of long-term partnerships — Lucas, we've been doing this show for a while now, and we've never run ads. I think that's one reason listeners trust us. Lucas: Totally. We deliberately keep it ad-free. If you've gotten value from episodes like this one, and you want to support that choice, the simplest way is to buy me a coffee dot com slash fexingo. Everything goes back into making the show better. Luna: Yeah, no pressure at all. But if it's helped you think through a pricing decision or a career move, that link is there. And now back to price floors — I'm curious, Lucas, do you ever adjust your floor based on the client's industry? Like, do you charge a higher floor for tech startups versus nonprofits? Lucas: Great question. Yes, absolutely. Industry matters. A floor for a well-funded Series A startup should be higher than for a local nonprofit, because the value of the work is different — and their ability to pay is different. But you have to be careful not to price discriminate in a way that feels arbitrary. I recommend having a clear rationale: 'For SaaS companies, the floor is $X because the complexity of the stakeholder landscape is higher.' That makes it logical, not personal. Luna: That's smart. So you're basically building a pricing matrix with floors by industry, service type, and maybe even by client size. Lucas: Exactly. And you can make it as simple or as complex as you want. Some freelancers use a three-tier system: small business, mid-market, enterprise. Others use a two-axis grid: service complexity on one axis, client revenue on the other. The key is to get it out of your head and onto paper. Luna: I think one thing that holds people back is the fear that a floor will scare away clients. But what you're saying is that it actually attracts the right ones. Lucas: Yes. And there's data on this. A survey of freelance consultants last year found that those who set a formal minimum fee reported 40% higher client satisfaction scores. The theory is that when you charge enough to be fully present, you deliver better work. Clients feel that. They're happier, even if they're paying more. Luna: That makes intuitive sense. I know when I've taken a low-paying project, I'm always a little resentful, and that probably shows in the work. Lucas: Exactly. So a floor isn't just about money. It's about protecting your energy and your reputation. If you're constantly working below your floor, you're training the market that your time is cheap. Luna: Alright, I'm sold. Let's wrap with a quick checklist for listeners. What are the three steps to set a price floor? Lucas: Step one: calculate your break-even rate — all costs divided by billable hours. Step two: add a 30% minimum margin, and then adjust for the type of work and client. Step three: write a short script for handling objections, like 'my floor for this type of project is X, and here's why.' Then test it for 90 days and review. Luna: Simple enough. I'll report back on how it goes. Lucas: I'd love to hear. And if listeners try it, they can always reach us through the show page. Luna: Good stuff. See you next time.