Do you charge by the hour or by the project? Do you send estimates or proposals? When do you require payment?
After much trial and error, and the guidance of a fabulous mentor. I have some pretty solid answers for these questions. Here they are and my reasons why:
1. I charge by the project.
- This is for the sake of clarity. I found that when I charged by the hour, it ended up being an invitation to a negotiation. When I said something took 10 hours, there were questions (‘did it really take you that long?’) and I felt that my time and my work were devalued.
- A wise, wise person once said to me, “I build websites twice as fast as I did 5 years ago and my skill and experience levels have quadrupled. If I was charging by the hour, I’d be making half the amount for far better work.” This is a golden statement because it is so true. One of my strengths is my speed. Typically, I write very fast and charging by the hour would penalize me for this instead of honoring my ability to deliver high quality work quickly.
- Concepting time. Now who can place an hourly value on this most important part of any creative process? Sometimes I eat lunch, sometimes I read my favorite blogs, sometimes I walk my dogs, sometimes I write free form – but my mind is always working and suddenly, blam!, I’ve got it. The concept is there and the writing begins.
2. I send proposals. I found that when I sent an estimate such as 6-8 hours, clients set their sights on the lower number and again there was a lot of wiggle room. With a proposal, everyone is clear about what will be done and exactly how much it will cost.
3. I require payment before I begin any project. For one time projects, I require 50% before I write a word and then the final 50% at the project’s completion. For ongoing projects, like blogging, I require payment for the upcoming month before it begins. I know some people won’t send the final draft until they have the last check, but I haven’t had to go that far.
- As a freelancer these methods are critical to keeping the cash moving. I’ve had many projects where I’ve completed the bulk of the work and the client gets busy and hasn’t done the final proof…and on and on…until it’s been 8 months and I haven’t seen a dime.
- When working with a new client, protect yourself and get the money first. I hate to think the worst, but there are bad people out there who will take your work and then disappear. Of course, with established clients or close-knit referrals, you can bend this rule if you need to due to time constraints.
Have anything to add? The comment link is right down there…
I love your observation that charging by the hour penalizes you for getting a job done quickly. So true!
I, too, charge by the project. In some cases, I work for a percentage of the profits. Both arrangements have worked well for me.
Thanks, Ryan. Working for a percentage of the profits is a great add to this list. There are so many options – direct sales, company profits/shares, etc….and don’t forget to get the contract in writing! And remember, if you go this route, you may not see the money for some time – so make sure this fits into your budget…I’m guessing by your comment that this must work out well for you, but I always ask for a mix (a little up front, a little down the road) in these situations.
Julie
Great post! I’ve only been freelancing for 8 months now and what I’ve been doing is stating my hourly rate and then offering to provide an estimate based on a sample of the material. I guess that’s easier to do when you’re editing more often than writing, but, you’re right, I may still be leaving money on the table those times when I provide very high quality work more quickly than expected. And I’m branching out, doing more writing lately, so it may just be time to reconsider my formula. Thanks!
Thanks for this perspective, Cheri. This was definitely a journey for me – so trust your gut and allow yourself to test the waters here. Know your worth and know you’re worth it…
Best,
Julie
Another thing to think about is how people value work based on the price attached. My favorite story is from an independent computer-tech guy I knew many years ago who decided he had too many people calling seeking his assistance – and he thought the demand was so high because his prices were so low. (He’d set them low when he was starting out and was trying to compete in a tough market.)
So he doubled his prices. And the number of people calling doubled, too – they thought he must be the best guy in town, because he was so expensive! Turned out great for him, since he was even more able to choose what his work would be like, and shift his efforts in the direction he wanted to go.
So don’t assume that charging more will turn people off – it might just bring more in, but with that additional interest will come more money and more choices.
Jeff – this is a fantastic point and an awesome story!!! Fodder for future posts…Thank you so much for stopping by and for adding your 2 cents – or should I say, 4 cents???
Best,
Julie