3 posts tagged Pricing
Be Free, Lance: Pricing Part 3
One of the hardest things to do is put a price on creative work. Seriously. In the beginning, it feels like more of a guessing game than most would be comfortable with … but that’s life. You need to dip your toes in the water and go for it! Over time, I promise that you’ll become 100 times more comfortable with your services and what you charge. For instance, one of the first freelancing gigs I ever had was a logo + website combo … for only $300. At the time, I was so excited to take on new work and get my name out there! I quickly realized that spending that much time on a project for a low price just wasn’t worth it! You simply wouldn’t survive on that kind of rate unless you worked at the speed of light. Fast forward a couple years and my pricing for branding and websites starts at $1,000 bare minimum. It’s taken me a bit of time - but I’m finally at a comfortable place in the whole pricing game.
So where do you start at, then? That’s the question. Tak your experience and work ethic into consideration when you’re putting together a pricing estimate for a potential client. Think about what you’d like to make and how long something will take you. Jessica Hische says it well … if you feel a little nervous about telling someone your price, you’re probably spot on. If not, you’re most likely underselling yourself! Start out with a flat fee that you’re comfortable working with and move up from there until it feels right. Go with your gut, it knows you well!
The hard part about being a creative is that not everyone understands our time and worth. In fact, some people think we can whip things together in a day, which is far from the truth! Luckily, most potential clients understand the value of good design and are willing to pay for it. Because I’ve run into both types of people, I quickly learned that it was best to be legit. Yes, legit. If you present yourself in a professional manner, you’ll be treated that way! Use well designed pricing sheets, invoices, and informational sheets. Trust me, people will appreciate and respect that you went the extra mile to present your business.
This is the last of my three part pricing series posts for Be Free, Lance - although I’m sure more will sneak in the future. Even though pricing can be overwhelming, I hope I was able to break it down just a little bit for you all.
Written by Breanna Rose.
Be Free, Lance: Pricing Part 2
A couple weeks back, I decided to kick off my pricing discussion by taking a look at the bigger picture and how to fairly set standards/goals for yourself when it comes to getting paid. But now, we’ve gotta dive in a little deeper. As a freelance creative, there are two well known ways of getting paid : by the hour or fixed fees. Like most things, both of these methods have pros and cons … which I’m here to tell you about. There’s a solid winner in my head, but we’ll get to that later. Let’s get the facts straight, first.
No matter which payment option you prefer, both ways require you to assess any project that comes your way and estimate how long you think it’ll take. Now that, my friends, is a loaded thing to do. I vividly remember estimating the hours of my first project as a freelance designer. I sat there with a blank sheet of paper, trying to write down how long I thought each part of the design process would take. I came up with a number, but was it right?? Nope. The point is, when you’re first starting out - it’s difficult to know your own process and how long each project will take. That takes time and you’ll get it down, just have patience.
In this situation, many young creatives will feel more comfortable offering their services at an hourly rate. This way, they don’t have to give a final price right away and can begin working instead. What many people forget is that money is money and nobody likes spending more than they thought they would. You may have given a rough estimate as to how long a project would take, but hours add up quickly. If you have a client who wants revision after revision, your time is only going to continue to grow. But do you think a client is willing to pay for all of that overtime? No way … even if the revisions and extra time were unforeseeable. Now don’t get me wrong, some people will understand and pay you appropriately, but that’s rare. Nine times out of ten, you’ll have an unhappy client on your hands, and nobody wants that.
A good way to steer clear from all of this money tension is to simply use fixed fees. When you are able to tell a client up front that their project wil cost X amount of dollars and include X amount of revisions, they know very well what is about to happen and how much they’re going to invest for it. If it’s a price that both you and you’re client are happy and settled with, it’s a win-win situation. Of course there is a lot that goes into determining a project’s price, but I’ll cover that next time, as it’s another topic in its own right!
Like I said earlier, there’s a front runner when it comes to the debate in fixed fees vs pricing hourly. I know people can and will argue each way, but for me, setting up a flat rate for a client always wins. Not only does it decide the cost from the get go and avoid money tension during a project, but it also works wonders for efficient creatives. Let’s face it, some creatives work quicker than others. Let’s say two designers with similar experience and talent work on the same project at $50 per hour. If person A completes a project in 10 hours and person B finishes in 20, you can see how billing at an hourly rate would punish the quicker of the two. Person A would make $500, while person B would make $1,000 … double. That can become a big difference, especially when these two people were assumed to be on the same talent scale.
With all of this said, take some time to think about your own process and decide which would work better for you and has the most pros rather than cons. Never punish yourself by making less than you deserve. I’ll be back in a few weeks to discuss how to determine your prices! Until then, feel free to comment with any questions you have or email me at firstname.lastname@example.org. I’m always happy to talk to others about what I’ve written about over here.
Written by Breanna Rose.
Be Free, Lance: Pricing Part 1
Not many people talk freely about pricing out freelance work. It’s this scary and unknown place, but honestly, everyone wants to know. I plan on covering a variety of topics regarding money over the next few weeks, so definitely check back for more! Before I sart, let’s get real : pricing is 100% different for everyone. No two people are alike. Creatives have different work ethics, skill sets, and experience … all of which need to be taken into account. It is my goal to give you a general sense of how to approach things.
Let’s start first by thinking of the big picture : your ideal income. According to AIGA’s annual survey, a fresh designer right out of school makes an average of $35,000 - $45,000 annually or about $20 - $30 per hour. If you’re starting out as a freelance creative, these numbers are a great starting point for you to look at. However, keep in mind that these averages are for those who are working with a company, have benefits, and a set work week for the most part. They’re not freelancers. People working for themselves do not receive benefits, have extra expenses, work odd hours, and are required to pay self employments taxes. Plus, not all hours put in are paid. There’s nobody above you paying you to promote and market yourself … It’s all out of pocket. With that said, although the yearly income averages I mentioned above are a very good starting point for research, a lot more needs to be taken into account.
The first thing I did when I decided to work for myself full-time was set a “goal income.” You know, what did I want to make, within reason. And because people rarely talk numbers ( even though everyone wants to know ), I’m going to be completely open and honest about my process. So here it goes : After a lot of thought, I told myself that I would be happy with at least $30,000 after one year of freelancing. That may seem low ( I kind of did that on purpose to myself ), compared to the $35,000 - $45,000 estimated earlier, but I knew that a LOT of my time would be unpaid dedicated to networking, research, and the development of my own business throughout that first year. I realized that I was building something from the ground up and money wouldn’t appear from thin air. My ideal yearly income has since changed, but hopefully this gives you some sort of starting point. Think about what you want to make, what’s reasonable, and find a happy medium. Who knows, you may surprise yourself and exceed your ideal income at the end of the first year. If I can do it, you can do it! Hard work pays off. Gain experience, learn as you go, and your ideal income will increase easily over time.
The second thing to conquer is setting up an hourly rate, which is the most challenging part by far. Sure, you could figure out how many hours you think you’re going to work per week, on average, and do some math with your ideal income to come up with an hourly rate. Or you could plug in some numbers to this free rate calculator. But here’s the thing : doing math will only give you a good starting point. It’s not an answer. There is absolutely no way to know exactly how much you’re going to make as a freelancer. There are just too many variables.
What I can tell you, though, is that you need to compensate yourself fairly. The $20 - $30 an hour estimate from AIGA does not work in this case, because working for a company and being a freelance creative equal different things when it comes to money. In my opinion, if you’re working for yourself, your hourly rate needs to be somewhat higher than the averages found on AIGA’s survey if you’re wanting to reach your ideal income. It’s the truth. While a designer working for a company could reach $35,000 a year by working at $20ish an hour, a freelance creative would have to work even more hours to reach that same salary. The reason for this is simple : not all hours a freelancer works are paid for. There are the hours you’ll spend endlessly marketing yourself and the times where you work more than you initially estimated on a project ( unpaid overtime ). There’s value and work ethic. Long work days and phone meetings. Because of these reasons, and many more, you need to adjust your price appropriately. It’s up to you how you interpret all of these things, but know that they need to be accounted for and added. Don’t undersell yourself, or you won’t survive.
I could go on and on about each and every little detail that goes into figuring out rates … from expenses to your own value as a creative, it’s all relavent! I hope that this post has come across as honest and raw. I know that not everyone will agree with my thoughts on pricing, but it’s good to get it out there and open for discussion. Remember, I’ll be back in a few weeks for even more on pricing!
Written by Breanna Rose.