Tunde is a graphic designer in Lagos. He has been freelancing for three years. He charges ₦80,000 for a full brand identity project — logo, business card, letterhead. The project takes him about 40 hours.
That works out to ₦2,000 per hour. Minimum wage in Lagos is ₦70,000 per month for a full-time employee. Tunde is earning less per hour than that, before accounting for the fact that he pays for his own software, internet, electricity, and equipment — and has no paid leave, no pension, no sick days.
He is not unusual. Underpricing is the most common financial problem among Nigerian freelancers and independent consultants.
This guide explains how to calculate what your services actually need to cost — and how to present that price to clients.
When you sell a product, you have clear costs: materials, manufacturing, storage. When you sell a service, your main cost is your time — and most freelancers never price their time correctly.
Two things make this harder than it sounds:
You have costs even when you are not billing. A product business only incurs costs when it makes products. As a freelancer, you pay for your tools, your phone, your internet, your workspace — every month, whether you have clients or not. Those costs must be recovered in the time you do spend billing.
You cannot sell every hour. A 40-hour work week does not mean 40 billable hours. Time spent on proposals, admin, client communication, marketing, and rest means your actual billable hours are usually 20–25 hours per week at most. The rest are necessary but unpaid.
Get these two things wrong and your pricing will always be too low.
The first number you need is what it costs you to run your freelance business each month — and to live.
Business costs (monthly):
Personal costs (monthly — the amount you need to take home):
Tunde adds his up: ₦390,000 per month total — ₦140,000 in business costs and ₦250,000 to live on.
This is your floor number. You cannot charge less than what it costs to sustain yourself and your business.
Now divide your floor number by the hours you can realistically bill each month.
Most freelancers can bill 20 hours per week, 4 weeks a month = 80 billable hours per month. Some bill more; many bill less. Use your honest number, not the optimistic one.
Tunde uses 80 billable hours.
Floor price per hour = ₦390,000 ÷ 80 = ₦4,875
This is the minimum Tunde must charge per hour to break even. Not to thrive — just to break even. If he charges less, he is slowly going backwards.
He was charging ₦2,000 per hour. He was effectively subsidising his clients.
Your floor price covers costs and survival. A profit margin is what allows you to invest in your business, handle slow months, and build savings beyond your monthly buffer.
Add 30–50% to your floor price as a starting point.
Tunde's target hourly rate = ₦4,875 × 1.40 = ₦6,825/hour
For a 40-hour brand identity project:
₦6,825 × 40 hours = ₦273,000
That is the project price he should be charging — not ₦80,000.
Quoting clients in hours is risky. It invites negotiation on the hours, not the value. It also means any efficiency you develop (completing work faster because you are skilled) reduces your income.
Package your services into defined deliverables:
The prices above are based on the hours you estimated, plus your margin. The client sees a clear deliverable and a clear price — not a time estimate that feels negotiable.
Define what is included and what counts as extra. Every experienced freelancer has stories about scope creep — clients who keep asking for "just one more small change." Your package definition is the boundary.
The floor-price calculation above is cost-based pricing — it starts from your costs and works up. It is the right place to start. But it has a ceiling: it anchors your price to your hours, not to the value you create for the client.
Value-based pricing asks a different question: what is this work worth to the client?
A logo for a new restaurant in Ikeja has a different value than a logo for a consumer brand launching nationally. The hours are similar. The value is not.
As you gain experience and reputation, move toward pricing based on scope and outcome:
None of these prices are derived from your hourly rate. They are derived from understanding the client's problem, their budget, and the outcome your work enables.
To reach value-based pricing, you need:
Start with floor pricing. Graduate to value pricing as your positioning strengthens.
This is the moment most freelancers undermine their own pricing. They discount immediately or volunteer a lower option before the client asks.
Before discounting, ask: too expensive compared to what?
If the client is comparing you to someone who charges ₦40,000 for the same job, that person is either building a portfolio and working at a loss, or cutting corners somewhere. Both are legitimate business decisions — but they are not your competition if you are selling quality.
Practical responses:
"I understand. What's your budget?" — This tells you whether they are serious and what range is realistic for them. Sometimes the gap is smaller than you thought.
"I can reduce scope to fit that budget." — Offer a smaller package at a lower price. Do not offer the same work at a lower price.
"Payment in two instalments — 50% now, 50% on delivery." — This is not a discount; it is a flexibility offer. Many clients who say "too expensive" really mean "I don't have it all now."
"Let me know when you're ready." — Walk away when the client wants full work at a fraction of the price. The clients worth keeping are the ones who understand value.
Lucrive's Pricing Calculator was designed for product businesses — it has fields for materials, manufacturing, and units. But service businesses can adapt it:
The calculator will output your floor price and recommended price, showing you the minimum you can accept and what you should quote.
Open the Pricing Calculator in Lucrive →
Every freelancer should know their monthly number — the minimum revenue they need to cover costs and pay themselves. If you do not know this number, you cannot know whether a slow month is a problem or whether a project price is sustainable.
Calculate it once. Write it down. Review it every time your costs change (new software, rent increase, adding a dependent). That number is the floor below which you cannot afford to go.
Tunde's number is ₦390,000. He now quotes brand identity projects at ₦280,000–₦420,000 depending on scope. He takes two to three projects per month. His floor is covered with margin to grow.
The shift was not finding different clients. It was knowing his number and holding to it.