Freelancing: The Pricing Game
Fam, I’m going to tell you right now this is not the easiest thing. In fact, it is the toughest part of freelancing (or one of the toughest)…ever.
Does it get better? Yes, in due time it will. Also, understand that my way is not THE way. I’m giving you what I’ve learned and helping you not make the same mistake or fix the mistake you’re making right now.
“How much do you charge for a simple logo? How much do you charge for a simple blog design?”
Simple. I love that word because it gives the perception that what we’re doing is not complex.
Here’s the deal: what you’re doing is not simple. Nothing we ever do will be simple.
When I started, I always wondered, “Do you have base prices or charge by the hour?”
There’s not a right or wrong answer, but there are pros and cons:
I calculate how much I want to make a year. For this post, I’ll say $50,000.
That means I’m making about $26.00/hour (26.04, but for rounding purposes, $26)
If I’m doing a logo for someone, I need at least 4 hours to meet and do research.
Next, I need to sketch ideas. Another 8 hours Drafting 3 from the sketches. 8 hours Revisions, 2 hours Total: 22 hours (This is a heavily rough estimate. Each project is different and I’m assuming this is one of your easier projects, to be honest).
If you’re charging by the hour, this would be a $572 project. Remember you’ll want to pull out money for taxes. “Taxes?” Yeah, taxes $$$.
Here’s the downside of charging per hour, you may undercharge yourself. You think a project is going to take 20 hours, but it ends up taking 30. That’s 10 hours you’re not charging for. If you’re trying to put all of your work in that 20 hours, you’re not giving yourself or the client your best. Productivity is essentially out the door.
“But shouldn’t it be about doing what you love?” Of course, but you’re also in business to make money, and love/passion doesn’t pay the bills.
Flat pricing mainly means each project—logo design, web design, branding, there’s a set price for each. You treat it as if they all take the same amount of time.
If you average how long it’s taken you to do a certain skill and set a price that way then it’s “fair” across the board. It’s almost like setting a menu.
Problem? Undercharging is real in this case and it’s easy for people to take advantage of you. “Oh, this person charges $250 for a logo? Awesome!” then they want something extremely detailed that exceeds more than $250.
Right now, doing both works better for me.
The average to complete a particular job based on your desired salary (ex. It takes about 20 hours to do a logo, so at $26 an hour, that’s $520. Logo design will start at $520).
The next step is to look at who you’re designing for. Is this a start-up or a major corporation? This makes a difference! If a company is making something off of what you design, you need to have your share. If it’s an individual client, write out terms of usage in the quote and contract so there’s a clear understanding between both parties. Again, each client is different, this is why there’s no clear answer on any of this!
Let’s create a scenario:
You and Betty Boop are part of the same Twitter Chat. You guys follow each other and she really likes your work. She’s taking the plunge and finally going to open up her consulting business. She’s awful at graphics and wants you to do a logo for her! You’d love to because you think she’ll be great at it and you are an encourager of other entrepreneurs and want to help any way they can.
She wants it to stand out of course, and is open to anything as long as it “pops.” This could be a 20-hour project, so you are honest with her, letting her know you start at 520. You have her fill out an inquiry and do a survey so you can have more of an idea of what she’s looking for.
Do not give a consultation. She is not your client (yet).
It’s detailed, not insane, but you know you’re going have to do some work, including a bit of work on your tablet. Rule of thumb, if you think it’s going to take you a certain amount of hours, always add a few for just in cases. Future clients, this is not us ripping you off. This is real life in that we know things are never super duper smooth sailing. Not that we’re predicting a mess, but sometimes we think something will take us a certain amount of time when in the end it takes a little bit longer. This is how it works and it’s good that we have that time calculated so you’re understanding. If we tell you 20 hours and it’s 25 hours, that can be annoying for you. Does that make sense?
The project will take on average, 30 hours. Do you add 30 to said price point? I wouldn’t. I would add the additional hours to the already based on 20 hours price (in this case, add 10 hours).
“That seems like a lot to ask from someone!” I know. It gives me nervous to send in bids too, but I remember my time is valuable and so is my work and I’m pretty damn good at what I do.
If the client trusts you with their investment, you are worth the price you quoted them.
If Corporation XYZ Banana wants you to work on their branding, that is a different ballgame and this is where you want to fine-tune your contract and pricing. Jessica Hische has a great article on this that I will have you go to.
Here’s the bottom line when it comes to pricing:
Know your worth. Know the value of your work. Do not sell yourself short because you will beat yourself up in the end. Knowing your own strengths and weakness allows you to price the way you need to. Your client will understand your pricing and will have more confidence in your pricing structure.
If you hear, “Oh that’s it?” or “That’s cheap! I thought it would be more!” Reevaluate your pricing.
If you have any questions, comments or concerns, please comment below.
Until next time,