Figuring out your role as a freelancer and actually finding clients is hard enough. But eventually you realize that you have to come up with prices, which is more complicated than it sounds.
You basically have 3 choices: hourly rates, project fees, or retainers.
Hourly rates are amounts that you charge by the hour (obviously). The benefit of them is that you get paid for the time you put in, no matter how much or how little it is. The down side is that it will ruin your budget because you’ll never know how much is coming in at the end of the month until you’re sending out your invoices.
One way to ensure income on an hourly basis is to have clients on long-term contracts who require monthly services, such as blogs, social media schedules, etc.
Project fees are a step up from this because you estimate the total cost of a project and agree on the price before you start. Then both you and the client are clear on the price from the beginning. This can put you in a bit of a bind if you end up doing more work than you thought, such as if the client wants to discuss the project multiple times a day, or you encounter issues with the project itself.
When creating a contract for a project, I prefer to include clauses for extra work. I detail the project scope as best I can, and then include a clause or two about what will happen if the project extends passed a certain number of hours, or extra work is required.
Retainers are my favorite way to get paid, and they are good for clients too. A retainer is when the client pays you an amount each month no matter what you do. They are paying to reserve your time, and it is up to them to use it. Now, it’s not my favorite because there isn’t anything to do sometimes, it’s my favorite because it prompts the client to use what they are paying for.
I like having work to do, and sometimes clients can get busy, or even have you on a long-term contract, but won’t have much for you to do. Being on a retainer tells the client that you are there if they need you, and it tells you that you are valuable to the client.
You could end up doing a lot of work one month, and not as much the next. Generally, I find that retainers balance out in the end, without leaving either party feeling like they’ve lost anything.
How do I figure out a price?
How you come up with an amount, whether hourly, project-based, or for a retainer really depends on your location, your experience, and the client’s budget.
Some clients will have big budgets and some won’t. I try my best to fit my fees to my clients, instead of sticking to a strict price. Of course, I do have a minimum that I’ll take, but I think everyone deserves a little help now and then, so if I have to take a little less in order to help someone out I’ll do it.
Take into account the length of the contract and whether or not your client is likely to need you again in the future. You shouldn’t start low and then try to charge more the next time they need you. Keep your prices fairly even, and whenever you decide to change them, offer a clear, straightforward, and reasonable explanation.
Look at other freelancers in your area, and even consulting agencies to see what their prices are like, and then figure out what you need to make to pay your bills. Your price should fall somewhere between the two.
The best way to charge
I’ve had clients on all kinds of different payment structures. I am currently on three different ones with three different clients as I write. I try to judge the best way to price a project or contract based on the client, the scope, and the length.
About a year or so ago, I implemented a sort of mixed pricing method, which has been working out very well. I charge hourly for general tasks, and then for custom graphics, articles, or other projects that can either take a lot of time, or that will require extra work such as a stock photo, special computer programs, etc., I charge a fee.
So, that would mean that for social media scheduling I might charge $25/hour, and then for custom graphics for the social page, I would charge $50/each.
But what you charge depends on what you have to offer, what the client needs, and what you can afford to work for. Don’t charge pennies, your work is valuable, but try not to charge the, more than is reasonable. Just because a client doesn’t have a ton of cash to dump on you doesn’t mean that the experience won’t be valuable to you in the long run.
How do you charge? What do you think the best pricing method is?
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