Pricing the work
March 5th, 2007
Last week I talked with some clients about potential projects. What I find difficult is pricing. Especially giving quotes.
I tend to underprice myself horribly. I’ve noticed that when asked for a price for a job, I instinctively think a price that is about a third of what I should actually ask. Thank god these days I think again! But I still am in a situation where I work pretty much all the time, just to make ends meet.
As part of my money/business emancipation I read this book that got me thinking about my attitudes on money. I realised I’ve never asked for better pay, even with steady jobs. I have trouble asking for a fair price, because it makes me feel greedy. Typical of women, apparently.
When hiring a freelancer/solo designer, many clients don’t consider that the price is not at all comparable to, say, their own hourly rate at a steady job. Neither do many freelancers, though.
What really goes in a price:
time spent meeting/emailing/talking on the phone with the client
looking for ideas for the job, sketches
actual time doing the job
possible corrections from the client
+
cost of equipment and materials:
computer, software, scanner, paint, stamps etc.
business maintenance time:
writing bills, queueing in a bank, making purchases.
time spent networking, getting new clients:
updating website, emailing, mailing
sick days
holidays
retirement payments
On estimate half of what you earn on a job is actually payable to you (and out of this you pay income tax). Half goes to business expenses. Off all business income you pay 22% tax (in Finland), so this has to be added to the job price as well.
Pricing for me is especially tricky. I am still a student, so some clients expect a student price. I, of course, have the same expenses as any business and am not currently eligible for student grant either. Also note: It is actually illegal to sell work that is done on student software licenses.
I have thought of doing a pricing chart. Mostly as a reminder to keep me from giving too low quotes, but maybe even to give to clients.
Resources:
How to Set Rates FAQ
Quoting to win
Pricing strategies that work
Graafisen työn hinnoittelu (in finnish)
edit: When negotiating a fee with a client, it might help them understand the pricing better if you break down all the different phases the job entails and how much time it will take to do them.