Figuring Out How Much to Charge
Figuring out how much to charge is one of the hardest parts of freelancing.
Over the years I have given much thought to how to price jobs and I’m sure its a topic we’ll be discussing aplenty here on FreelanceSwitch. Today I thought I’d write out how I go about costing a job.
The first point of call when deciding on charges should always be how long it will take you to actually complete the job. If there are extra costs like printing, web hosting, outsourcing an illustration and so on, then you should also factor in how much it will cost you to have these done.
When a new job comes in I break it up into components and then estimate the time it will take to complete each one. I then multiply my hourly rate by that number of hours to get a costing for the job. When I first started out I would break down the job to the nth degree so that the components were really atomic tasks which I could estimate easily. With experience though you get better at estimating without needing to do that.
Now you could leave it at that, but in my experience just knowing the base cost for a job doesn’t take everything into account. So then I decide if that cost is appropriate for the client. Some clients have special needs, are a little risky, pay very slowly, require a lot of administrative work or just like to have lots of meetings and phone conversations. For these clients I will often pad the costing out to cover these issues. Additionally because I have been fortunate enough to have more work than I can actually take on, I will also add cost to a job which I am not particularly interested in.
On the other hand if a client is easy to work with, provides a lot of repeat work, is often happy to take my advice on things, perhaps can’t afford things, is a non-profit or has a job that I would love to be a part of then I will often reduce the cost.
So essentially I figure out my ‘real’ cost and then adjust according to all the extra factors. Of course you don’t always know whether these factors apply, particularly for a new client, so there is a certain amount of guesswork needed and sometimes you get it wrong. When in doubt theoretically you should err to the side of caution so that you don’t regret giving a cheap price, however often in practice the lure of winning the job will make you err the other way.
So that’s my rough practice, what do you do?
This article has been translated into Spanish by Diana from Artegami. Thanks Diana!