It’s a perennial question, so let’s talk about it again . . . How do you set your rates? (This is a topic we also discuss at length in the Coaching Program, which starts October 5, 2015.)
When I first started freelancing, I never knew what to charge. After a year or two, however, I learned how long it would take me to do various kinds of work and to gauge how easy or difficult a client would be to work with.
I created a matrix that I would use to estimate project fees for clients. The matrix was something for my own purposes — I did not show it to clients. It gave me an easy place to start, and then I could adjust from there.
For example, it’s common for consultants to include what I call a PITA Surcharge (or “pain in the ass” fee) of an additional 10-30% when estimating for certain clients! Of course, you don’t openly discuss this with most of your clients; it’s just part of your own calculations. (I have discussed this openly with long-standing clients who are self-aware enough to know when certain projects are going to require a ridiculous number of drafts because of certain personalities involved. But that’s rare.)
Here’s the rate card I personally used to use to estimate writing jobs. You’ll see the two main factors were how hard the job would be (which affects the speed with which I could write, a rate I calculated for myself after carefully tracking time on many projects) and how much I thought the work was worth on an hourly basis.
The type of work (e.g., annual report versus press release) and the client (e.g., small versus large) influenced which hourly rate I used. Again, I did not actually give the client the hourly rate. I just used it to estimate the project fee, which is what I gave to the client as the estimate.
I don’t use this anymore, because I don’t do this kind of work anymore. I am not suggesting you use this chart or these fees; I am suggesting that you create your own kind of tool!
What’s your favorite way to structure your fees for your nonprofit clients? How do you calculate estimates for your clients? Please share in the comments.