How much should I charge? It’s the first question that new freelancers or consultants ask. And the truth is, the question never goes away. You’ll always encounter new projects, new clients, and new twists that demand adjustments to your rate schedule.
First let’s look at the big picture. How do you view the work that you charge for?
As a commodity. If you charge by the word, or by the page, you are treating words like a commodity. It’s sort of like a drive-through business model.
As a skill. If you charge by the hour, you are treating your abilities like a trade. It’s akin to a plumber or electrician. Yes, you can fiddle with your leaking pipes, but the job will get done faster and better if you hire a pro. It’s the same with planning, writing, design, or whatever you offer. Everyone can do it at some level, but most people don’t do it very well. They need someone with skills — you! If you believe this is the right mindset for you, I recommend that you see how much beginning plumbers or electricians charge in your community. Use that as a baseline for your hourly rate and adjust from there.
If you charge primarily by the hour, however, you end up penalizing yourself for getting better and faster at the work you do. Let’s see, you produce a better product in less time, and you get paid less? That’s crazy! At the same time, knowing your hourly rate, even if you never share it with clients, can help you estimate project fees.
As a professional service. If you charge by the project, you are treating what you do like a professional service, much like a doctor. You aren’t billed by the minute when you get a check-up; you are billed for the service, regardless if it takes 5 or 50 minutes. The outcome, not the time spent on it, is what matters.
In most cases, I believe this approach works best. Clients like it because they know the bottom line, which is especially important for nonprofits. You know the bottom line, too. If you work quickly, you can make more than your typical hourly rate. If you work slowly, you may lose money. In other words, your success with project fees depends entirely on your ability to estimate accurately. You need well-defined projects and you need to know yourself and how long it will really take you to produce the work.
If a project is not well-defined, or you believe it’s likely that you will be asked to produce additional drafts, you can incorporate an hourly rate into a project fee and specify in the contract when the hourly rate kicks in.
Here’s the truth: I didn’t really start to make what I consider “real money” — not living month to month — until I moved exclusively to project fees.
How about you? Share your experiences in the comments.