The Born Freelancer on what to charge: Part 1

This series of posts by the Born Freelancer shares personal experiences and thoughts on issues relevant to freelancers. Have something to add to the conversation? Your input is welcome in the comments.

One of the most fundamental questions a freelancer will ever hear is also one of the most difficult to answer right away:

How much do you charge?

The correct answer will vary from individual to individual and will be determined according to qualifications, abilities, time lines, and perceived value. It will also depend on how much you want the job and how much your potential client wants you. The latter will depend upon your sales pitch, the former on your career path and current financial disposition.

Some points to consider:

You can never raise your price once you’ve stated it.
So never blurt out a number unless you are prepared to live with it. It is always better to request more details and to buy yourself additional time to come up with any estimate. A client’s memory will be surprisingly hazy on a lot of other issues but they will always remember the number you gave initially if you later try to raise it. Conversely, they will almost always try to get you to lower your stated fee. It seems that their memory will usually suffer a lapse as to your agreed-to price when they want to pay you less.

One way of trying to raise your price if you have inadvertently low-balled yourself — “add ons.” “Well of course the price I quoted is the basic price”. Such things as rush deliveries, all expenses, meetings, travel costs, phone conferences, etc. can all be added to the basic bill if you find yourself severely underestimating your upfront fee. You must advise them of all this ahead of time of course.

Working cheaply harms you in the long run.
Sure, you can offer a discount or sliding scale for repeat or volume work (when guaranteed to you in writing) but in the end you and your work will be judged as much on your price as on as anything else. Many times I can remember doing a great job for a small company at a heavily discounted fee with the verbal promise that they would call back again when they had their full budget. What happened? When they got their big budget the feeling was that they could now hire a “really really good” freelancer, one of the ones they couldn’t afford before. Guess where that left me? I was suddenly the “nice” guy they used when they had no choice. Funny how quickly they had forgotten that I was initially one of the “really really good” freelancers that they so desperately wanted and couldn’t possibly afford. When I lowered my price to help them out I also lowered my value and therefore desirability in their corporate eyes.

I’m reminded of a brand of wine I once used to greatly enjoy with friends at a favourite local restaurant. Years ago it cost $25 a bottle but wow — how we enjoyed it! It was without a doubt one of the best tasting wines we’d ever had. Months later I found it at a local wine store for about $9 a bottle. Not only did it never taste as good ever again but now it was just a cheap bottle of wine — nothing special. (I won’t even mentioned how ripped off we felt about the restaurant’s mark up. We rarely went back.) Lesson learned: if you are perceived as a freelancer worth the money (unless you really mess it up), you will be. If you are a discount or budget freelancer you and your work will be perceived as such too. You can never jump from one league to the other in the same client’s eyes. (Note: Nothing wrong with being a discount or budget freelancer for the same client if they are offering you a steady gig.)

Remember too that this is a business. Unless you are working for friends you must keep emotions out of the equation. Do not be persuaded by flattery and compliments. They are meaningless when it comes time to pay your own bills. “We really love your work. We would really like you to work for us. But we can’t quite afford you at the moment”. If they love you so much they will find a way to afford you. Caving in too quickly because you feel all warm and fuzzy about them puts you at a competitive disadvantage right away. It’s also a sure sign they’ve manipulated your emotions in their favour.

On the other hand, if they feel you are desperate for the work they will feel they can therefore negotiate your down. If you are desperate for work, never never never let on! The more desperate you appear the less desirable you and your work will be (unless they have no standards at all which should be another red flag.) Even if you are desperate, act like you couldn’t care less if they hired you or not when it comes time to negotiating. Now, it’s important to show genuine enthusiasm and genuine excitement for their project during your sales pitch – assuming you genuinely feel that way. (A separate topic for another future post.) But when it comes time to negotiate, you want the most leverage you can muster. Once they commence negotiations, they want you. If you can seem ready to walk away at any time, you can negotiate with much much stronger leverage.

Research your client.
I can’t believe the number of freelancers who just take what their potential clients say about themselves as the final word.

Research research research! What previous gigs have they offered to freelancers? What is their image, their brand, their reputation? What trouble are they hiring you to dispel or get rid of? How difficult are they to work for? What is their budget? Who do they want as their clients? Knowledge is always power and you need all the power you can get ahead of time before going in to discuss specifics. Time spent in research is always time well spent. Knowing all of this in advance will impact upon your fee.

Going on line will give you some answers. Checking at your local library might give you others. Networking with colleagues in the business may also give you some guidance. So will newspaper archives, better business bureau records, and even a physical visit (if possible) ahead of time to inspect their operation (to the extent that you can while “under cover”). The point is not necessarily to uncover any startling revelations but to form your own impression of your possible client and as a result develop your own strategy to deal with them.

To work for free or not?
A question very similar to — but not exactly the same as — should I ever work on spec? Personally, I’d rather offer to work for free than for a piddly sum if it’s for a friend or favourite charity. When you are starting out it is hard to find gigs. (Hell, it’s hard to find them even with years of experience.) You may be tempted to work on spec.

We’ve all done it. If you need the experience documented in your portfolio, or if there’s no other way of getting your client’s attention, or if you have nothing else to do anyway, it should be considered for a short period of time in your career. But – based on my experience — it usually ends in disappointment. Still, I think it better to work on spec or nothing as a gift (only to a friend or charity) rather than accepting an insultingly low fee. You can always say, to a friend for example, “you can’t afford me but if I help you out now, later one day you can help me out.” That way your value has not been degraded — your services at full value have been offered as a gift. But that is in rare personal circumstances only. Over all, if a professional client cannot see the value in your work ahead of time and demands you work on spec you can take it as read they will probably never really value you or your work.

Case in point: a small boutique advertising company once asked me to punch up some copy for an ad campaign. What I had to work from (their earlier draft) was pretty uninspired and third rate and needing so much work that my heart sank. They wanted me to work on spec so they could make the sale.

Warning signs flashed before my eyes but foolishly I did it anyway. I decided I wanted the package I would create for them in my portfolio. If that was all I ended up with that would still be a good investment of my time. Guess what? That’s all I ended up with. If you work on spec in such situations, there is usually no guarantee that you will ever get a paid gig out of it even if they make their sale. Likewise there is usually no guarantee they will ever hire you if they do make the sale. Spec work is sometimes necessary but ultimately it is a sucker’s bet.

I know of writers who have license plates that read something like NOMORESPEC to celebrate their emancipation from the endless tyranny of spec writing. If you have to do it, don’t be doing it for a second longer than you absolutely, positively have to. It does nothing for your reputation, it definitely hurts you and others in the business — as well as your self esteem — and ultimately it is debatable how much extra work it will actually bring to you.

You will find this Story Board post relevant to this issue and worth your consideration too.

Tip: If you do offer your talents as a gift to a registered charity it may be possible to get a charity tax receipt in the amount of what your services would be worth if you charged full rate. This is a possible angle to investigate if a select charity has no money to offer you but you would still like to work for them. You will need to consult a tax lawyer, accountant and/or local tax office for specific details.

In the end…
The amount you charge needs to be a fee you feel good about — and one that makes you feel good about yourself. Too little and you feel ripped off and angry. Too much and you’re just pricing yourself out of the market. Figure out your absolutely ideal price then how much less you would be willing to comfortably accept. Somewhere within those two numbers lies your actual current fee.

I hope these general thoughts will help you decide what you and your freelance services are worth when it comes time to answer the inevitable question, “so what would you charge”? I will have more to say on this important subject next time.

Got any tips you feel are relevant? Please feel free to add them to this post by using the comments form below.

Posted on June 6, 2012 at 11:36 am by editor · · Tagged with: , , ,

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