Q: Love your blog. (I left that in, just for context. WK)
My question is about setting a rate.
When I freelanced before, it was generally for long-term gigs and I was paid a daily rate. Don’t see that happening these days.
How do I calculate the cost for a job? Estimate the number of days x my daily rate? How do I not get burned?
And how do I work up the nerve to ask to be paid what I’m worth (likely clients are associations, government agencies, educational outlets)?
I have a horrible, typically female habit of undervaluing myself.
A: Nah, it’s not a female habit. It’s a freelancer’s habit. Guys make the same mistake. Especially when starting out, or even when they’ve been freelancing forever.
First thing, though.
Consider this Roman Numeral One. (Re-read as needed.)
No more thinking about ‘what you’re worth’, or ‘valuing yourself.’ That’s the wrong mindset for pricing. You will only make yourself miserable. And probably lose your shirt.
When we turn pro, when we do this for a living, we leave our tender psyches and self-worth out of it.
If we see every quote or proposal as a verdict on our ‘value’ we will be basket cases within a month.
And besides, the client doesn’t really care about ‘our worth’, what ‘we deserve’. That is all irrelevant. Clients only care about what they get. (They are concerned only about how this will make them look, what their boss will say, does it fit their budget, will it get this thing off their to-do lists. Does this person understand what I’m doing here?)
Your pricing is about the work. What the client wants done, and how much it will cost.
A client points to a huge pile of bricks. “See these bricks? I want them all carried up that hill there. And stacked neatly at the top.”
You look at the pile of bricks, the steepness of the hill. You’re wondering, “How many trips is that?” You’re thinking about the skinned knuckles, the aching calves. Will you need a wheelbarrow? Would you do all that for fifty cents? Hell no. Fifty dollars? No, again. Do you want to do this at all? What amount would make you say, “Sure, I’m game”?
Oh, and we never ‘ask to be paid’ anything. That is for amateurs and newbies.
Wrong mindset, wrong words. (Is the supermarket ‘asking‘ $3.49 for the cage-free eggs?)
We say how much it would be. What the fee would be.
Now, setting a rate. (Could write a book about this. Which I did. More about that later, though.)
You are right about those clients you mentioned above. They will likely want a project fee. A flat fee (or at least a range) for the project they have in mind.
A project fee is fine (and even preferable) when the task is clearly defined. Client lays something on your desk and says, ‘Build me one of these. This long, this high, sounds like this, talks about these things, and fits in here.”
If it looks like many days work, you base your fee on a day rate.
To figure a day rate, (or the more classy term, your per diem):
- There are 250 work days per year. (Figuring two weeks vacation.)
- Plan on selling half of them: 125 work days per year.
- You want to earn, say, $100,000 per year.
- Your day rate is 100,000 / 125. $800 per day.
Now, you talk to the client about the project. You listen, actually.
Then you start figuring. Okay, one morning for meetings. An afternoon spent going over the material. Some follow-up calls or emails. You draft for a while. Some research. X days to get a draft. Send to client. Some phone calls or meetings. Some time for fixes, revisions. You already know, since you were listening during your first call, that some other boss will still have to approve this. This big shot may want more revisions. (You are employed in house now? You know how this goes. Use that.)
You think it all through, you think X days should do it, based on what the client wants.
Now, add 25%. It always takes longer. We are always too optimistic. (Do not skip this part, even if you are chicken.)
Your quote is $XXX. (Or $XXX to $XXX if what they want is too vague right now.)
Send the email and forget it. Don’t wait with bated breath. Don’t watch your inbox. (You will anyway, but try not to. Clients can take forever.)
The client will make a decision one way or another, based entirely on their own self-absorbed and self-centered reasons. How comfortable they felt when talking to you initially. How comfortable they were with your ideas, your thoughts. Whether they can sell the budget to the boss. If they utterly mis-budgeted this thing and now how to re-think. If they are way late with this, and have to go with your price no matter what.
None of which has anything to do with your ‘worth’.
It’s about the work, and what the client wants.