Pricing your freelance services correctly prior to entering a client engagement is absolutely crucial to each and every freelancer. To know that you and your client are on the page before starting work is a must to ensure both parties are completely clear with the expectations of what will be delivered and received.
With each freelance project your tender for it is vital to avoid scope creep, unnecessary extra costs and to maintain strong working relationships which in large can be easily achieved if you price your time and services accurately. Here is a simple guide to taking the stress out of your projects and pricing yourself and your services out correctly:
1. Pricing your time
Before you work out how much you should charge your client, work out how long, based on your current skill level you think it will take for each project section. Break it down into smaller more manageable chunks. If you can accurately estimate the number of hours you think it will take…fantastic! If not do your research, ask around. I cannot stress how important it is estimate this as accurately as possible, because if you don’t spend the time accurately working this out, it will be you who’s working back late and not getting paid for your good time and at the end of the day, your will be the first one to query this because they will be handing the money over upon completion.
2. Pricing to your skill level
In freelancing, like most other industries; experience means dollars. To clarify, most of the time it means you pay a little more, but quite often will get a lot more because experienced professionals are able to work quicker, foresee problems sooner and more accurately assess the needs of a project. So when pricing your services you need to make an honest assessment of your skill level. Sometimes this can be a little humbling, but remember, none of us are perfect. If you’ve been web programming for 10 years, but have limited graphic design skills, then be honest with your client. Maybe even consider outsourcing part of the project. Work smarter not harder, and your client will love you for it. Play to your strengths and do not over estimate your hourly rate. Talk to other freelancers and take a look online at the sort of prices others are charging. Remember your potential client will be doing the numbers, so you’d better know the market at least as well as them.
3. Choosing the pricing method – Hourly vs. Fixed Pricing
To be blunt, when you starting out or when you’re dealing with certain clients, sometimes you may need to adapt to the circumstances at hand. Kate Moss may not get out of bed for anything less than $10,000 but until your reputation precedes you, you have to work with the client to get the deal done.
What does this mean you ask? If you’ve completed a similar project a certain way and think the client will go for that pricing, go in with that first. If they do not respond, then get ready to go in again. But know your minimum. There is no point working if you not making a profit. Generally we recommend an hourly rate because it allows for management of scope creep and unforeseen circumstances, but over time you will get better at pricing projects, so if you’re confident with a fixed price your client is more likely to go for this because it protects them.
4. Choosing the right clients
If you’ve been eating Spam from a can for the last month, then any client is the right client. But if you’re up and running look for clients who play to your skill set and development resources. If you’ve had experience in a certain field and there is enough work, specialisation is a great way to go. It’s amazing how repeat business can be developed online, so make an assessment of a particular digital arena, and if there is enough work, and there is longevity in it, then try to build your portfolio on this. Remember a doctor who is a specialist always charges more because they put in the hard yards initially. So to in freelancing, once you build your reputation.
5. Verbal agreements mean nothing
I don’t think I can be any clearer. VERBAL AGREEMENTS MEAN NOTHING. Freelance projects involve potentially thousands of dollars and can go either very well or very bad for you. You don’t want to end up being sued, arguing with clients or receiving bad reviews because you didn’t take the time to ensure your client signed off on what was discussed. Put it in writing and you’ll be OK.
So to summarise, this simple guide gives some insider tips on engaging clients, making a positive self-assessment of your skills, and making the right career choices. It’s a complicated business freelancing but with a little guidance you can make some clever decisions which will benefit you greatly in the long run. Just remember to look before you leap and you’ll go a long way.