In addition to the measurable facts of a project (work volume, meeting time, deadline, etc.), freelance pricing requires accounting for highly individual items that can’t be defined in hours or put into a spreadsheet—but will have an impact on how much you charge:
- How busy are you right now and during the proposed project period? If you are busy, add a bit of a premium and see what happens—you might be pleasantly surprised.
- How successful is the prospective client’s business? Don’t automatically assume that bigger companies pay more than smaller ones—as I contend in “Size doesn’t matter (when it comes to rates)”, rates are far more dependent on a prospect’s perception of your value. In fact, if you don’t charge enough, a client may be suspicious that you’re not qualified.
- What’s the overall economy like, and how well is the client’s industry doing? These factors may not specifically affect how much you charge, but could affect the likelihood of your estimate being accepted. (If your freelance business survived the recessions of 2001 or 2007-09, you know what I’m talking about!)
- Is this a one-off project, or is there potential for additional business immediately or down the road if things go well? Don’t, however, fall into the trap of lowering your price based on promises that “there’s more where this came from”!
- Is this an existing client with expectations based on prior project pricing? You probably don’t want to get too aggressive with a price increase—unless your previous estimates turned out to be too low.
- Does this client seem responsive and easy to work with, or is he needier than average? One of my colleagues applies what she calls “an irritant surcharge”—a phrase I love.
- Am I working with a single point person, or am I answering to several? In the case of the latter, a more complicated project means more time—and you should budget for it. A caveat: Whenever you can, it’s best to recommend a single point of contact.
- What could securing this client and project mean for me in terms of my portfolio? It’s always nice to have a big brand for name-dropping purposes, or an exceptionally cool project to show off your skills. It’s also beneficial to diversify into new industries and media. And a well-connected, high-visibility client could represent an enormous amount of referral business.
- What is the shelf life of the project? Freelancers commonly overlook this aspect of pricing. Inherently, something like a tweet or Facebook post is going to have less perceived value than a website or book, even if it takes you almost the same amount of time to write or edit it. (Let’s face it; most tweets don’t last as long as a piece of chewing gum.) A corporate tagline might be used for years, even if it’s something that comes to you the moment you sit down at the computer.
- Will I need to subcontract any of the work? Assuming you will have to manage the subcontractor at least a bit, you will want to mark up this person’s costs.
This post is adapted from The Science, Art and Voodoo of Freelance Pricing and Getting Paid, available in Kindle and softcover versions at Amazon.
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Excellent. This is probably implied in Point #1, but “adding a bit of premium” for quick turnarounds makes perfect sense, both financially and ethically. Working late and/or weekends in order to deliver for a client is an overtime situation and merits extra compensation. Having a rule of thumb is important here, so you can state right up front: “I charge an extra 20%, 25%, whatever for next-day turnarounds, 2-day turnarounds, weekend work, whatever.”
Great advice , Jake, and a nice little showcase for your skills: beautifully written, clear and concise.
@Mark, thanks for your comment & kind words. Having specific rules on the relationship between deadline and price is a prudent idea—if nothing else so that you don’t blurt out something you regret! Think of it in terms of Uber raising prices during peak times (although I don’t suspect that I could get away with 3x rates, lol).
I completely agree on point number 2 (well, on all the points, actually). At a recent conference, I met up with a large “household name” company. They were interested, but gee, they had a budget that turned out to be rather measly. Yet one contact from that same conference — a one-man shop, as it happens — hired me over the phone at my rate without hesitation.
I used to think size mattered (in terms of price), but I’m not convinced anymore. Some of the largest hassles I’ve had over price have come from the big guns. In fact, at that same conference, I walked by the booth of one company whose marketing person canceled our meeting the week before. Why? Because, as she put it, “We can only afford $60 an hour.”
Yet theirs was a big, glitzy booth at the most expensive industry show there is. Sixty bucks an hour. Right.
Good anecdote, Lori! The longer I’m at this, the more I realize that good clients (and bad ones) come in a dazzling array of sizes and shapes. Gotta keep your head on a swivel out there!