How to Draft Cost Estimates And Get Paid as a Freelancer | Monika Kanokova | Skillshare

How to Draft Cost Estimates And Get Paid as a Freelancer

Monika Kanokova, Community & Content Strategist

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12 Lessons (20m)
    • 1. Introduction

      1:13
    • 2. Class Project

      0:52
    • 3. How to Calculate Your Price?

      0:43
    • 4. How to Calculate Project-Based Fees?

      1:38
    • 5. How to Calculate Your Hourly Rate?

      2:37
    • 6. Information to Include in Your Offer

      3:21
    • 7. How about Payment Conditions?

      3:47
    • 8. Get the Client to Sign Off on the Contract!

      0:22
    • 9. What if There Is Not Enough Budget?

      1:19
    • 10. How to Deal with Invoicing?

      0:51
    • 11. What if the Client Doesn’t Want to Pay?

      2:24
    • 12. Final Words

      0:36

About This Class

A potential client contacted you and you had your first conversation about how you can work together. That’s great! 

Now you’re all excited and can’t wait to start working on the assignment. But, before you can get started, you need to estimate the value of your project.

In this class, I'll discuss how to set your price and also the different things you need to consider when drafting cost estimates for clients. 

In the last couple of years, I’ve run into difficult situations several times where the client refused to pay. But, because of how I set up my contracts and terms and conditions, I was luckily always right and got my invoices paid in full. 

While this is no legal advice, I hope this class will help you get more clarity on how to set up cost estimates for successful collaborations.

Transcripts

1. Introduction: a potential client contacted you and you have your first conversation about how you can work together. That's great. Now, if you're anything like me, you're probably all excited and convert to start working on the assignment. But before you can get started, you need to estimate the value of your project. Hi, I'm Monica. I've been freelancing for six years, and before that I was lucky to have worked as a project manager. At an agency drafting proposals in Khost estimates for various projects in the job, I learned how to draft cost estimates and send invoices that get paid. I decided to create this class because in the last couple of years I've run into difficult situations. They had declined, refused to pay, and it happened several times. But because of High said of my contract in terms and conditions, I was likely always right and got my invoices paid in full, which after a couple of conversations with friends, I realized it's actually not that common. That's why today I would like to discuss cost estimates, how to invoice how to eventually get paid once you've delivered your work, and even if the situation got a little bit well out of hand, let's get started 2. Class Project: because pricing and invoicing is a very private subject. Instead of asking you to share a student project, I think you should just take notes. However, I would still like to ask you to share a student project by introducing yourself. Sketcher is a community full of wonderful people, and we should all use every opportunity to tell others what we do and what we would like to get hired for. So please share your name there. You're based. What do you do for a living? What's your website? If you don't have one, Which my classroom in human scale share? What professionals The usually collaborate with five questions. This way people can reach out to you, or you can reach out to others if you like them work. So let's go live. You're talking business. 3. How to Calculate Your Price? : How many times have you heard someone say they need a logo before now upside or a concept for social media and ask you how much it costs? You don't need to answer this immediately. First and foremost, you should always assess how much time you actually need and what you'll need to consider in order to deliver. You can always send an email, generally speaking, that two approaches to setting your price, project based pricing and kind based pricing. There are people who say, Never charged by the hour, Always better project From my experience. You can also charge Buddy amount of time that you reserved for a client. But you have to consider notice periods and cancellation remunerations in such cases, which we'll get to in the next few videos. 4. How to Calculate Project-Based Fees? : for my line of work, which is Michael thing. I start my estimation for project based pricing, with the amount of time almost like we spent on it, our then at a percentage for project management, which at an agency is it about 15 to 20%? You also need to exclude time for feet back. I usually include two runs of feedback because it's important to make the number of changes you accept their their clients who coda moms or sisters to get their opinion. And because they don't like something the moms and the sisters. The feedback might change multiple times, and you simply wants to be able to charge for that extra time. Since this is a class for everyone and most likely, people from all corners of the earth watching here on scale share high. I'll give you some general advice on setting a project based fee, which might be a bit unsatisfying. But generally Google. It's normal in your industry and in your or your clients region, and then talk to people in your industry and ask them how much they charge the the old Judas. So the other approach to project based fees is to calculate the future benefit your work will have for your client especially, for example, art. It's hard to assess industry prices, so you might need to ask people in the industry what a suitable fee could be. Additionally, and in some countries and for some industries, there are specific flat rates for usage rights that ought to be paid in addition to the project fee, which again, an answer satisfying answer is something you'll have to go for your own security shin. 5. How to Calculate Your Hourly Rate? : depending on your industry, your region and your level of experience. Different only rates are standard. Years ago, when I first started freelancing, I decided to write a book about it and learn from successful, Freeland says. How they did it, coming from a full time job and being used to 40 hours a V, I was shocked to hear in those interviews, the freelance has only have about 20 billable hours. Very, I would say it can be up to maybe 24. But if you have talking about deep focused work, it's definitely not much more than that. Also, as a celeb burner, you're responsible for everything in your business. You need Teoh, do your income. Think you need to find new clients and do your own market thing, even need to clean your own workspace, even if it's just your bedroom. Everyone has to do that. So now we have you. Now you have now. You know you have about 20 or is a week to work. Let's say you have 80 billable hours each month, so this is how much you would earn in a month if you're fully booked, which, as a success of France thing I can say is not always the case. What does this mean for your annual income? I guess your natural instinct right now is to probably multiply this number by 12. But before you do that, you need to remember that you also need to consider vacation and sick leave. So it's probably just about 10 months. Everything else is a bonus. So let's reverse this whole copulation. How much she wants to earn pair year, first question, then divide this number by 10 Then divide this number by 80 and that would be the only rate you need. In order to cover your spending, however, you're a freelancer, so you also need to consider putting money aside for dry months. Then you don't have any plan, work and for retirement. And now you have learned that own Hamas. You should charge per hour. Given the nature off my work, I usually work with people for an agreed upon time frame and charged accordingly. Instead of charging by the hour, I usually have a weekly or a monthly rate, which is also an option, but to definitely be calculated similarly, toe how you figure out your only rate. I would love to know what you're thinking right now. You can also send me a private message if you would like to discuss this. 6. Information to Include in Your Offer: So far, I've come across to thoughts of for first very beautifully designed ones and simple PDS that just states the price in terms and conditions. If you would like to have a beautifully crafted template for your cost estimates, you can vitamin sites like Creative Market as a marketing consultant. My clients have bean just fine with simple pdf, so it's not mandatory to have it look super fancy. But I did want to mention it here. Now let's get to the more technical side of things in my coast estimates I always include my clients address and the text number, my business address and my text number and the date. So far, so good. No surprises there. I didn't write at Subject Line to explain what's the collaboration, What the offer is about then I include a short description for to Convex realize why this project is important and what the client wants to achieve with our collaboration. I usually take parts of the briefing off the client and then just at some off my faults, and that's the short description. Next I. That's the project scope in the project scope. I list what activities and deliver bulls are expected I extra dates to make it clear. Windows deliver. Both argue No, just my deliverables, but also any sort of information the client is responsible for providing. To me, If I'm supposed to collaborate this or manage a team as part of the project, I always make sure to state how many people and also include their availability to make sure I can deliver on what's being discussed. Also, if there are a set you're being promised that are supposed to help you, make sure you include all the information you have about those in the contract to always stayed in your contract that any changes of scope after the approval will have to be a re negotiated and gonna require additional time and budget. You can't do more of work in the same amount of time, and there is no something small and extracted we haven't fought off before. You need to look after yourself and make sure you get paid for the extra work you're asked to do unless you're happy to do it for free. Which might be the case sometimes, but you're definitely Nobita rule like I do. Thanks for free on top, but just I like to be Thanks for it. And no, just see as part of the whole thing. Also never forget to include vendor work is supposed to start, and then it's supposed to finish. Always include the number of rounds of feet back in your estimate. I personally like to include two rounds of feet bag and say that all additional feet big will be extra bill fighting. Our always make sure to include payment conditions, the take your invoices valid until and your payment details. I'll explain what they are in the next video, but the ramp, this whole thing up last pregnant. Please don't forget to set the date when your offer is valid tail to make sure no one comes back a year later and expects you to do to work for the same price. This state also creates a sense of urgency for clients to sign a foster 7. How about Payment Conditions? : So whenever the invoices higher than 1000 I always ask for a 50% down payment. Before I started working on a project. I've never had a problem with anyone paying this if they haven't issued, if a down payment outside this is a red flag, if you're not in a European Union country than you might say $1000.1000 pounds, whatever the equivalent is if the person gets more complex and they had different delivery bubbles at different times or if the project happens in phases, I like to set up a payment plan for a payment plan. I create the breakdown, divided by calendar weeks to outline when a face starts and ends and then decline should expect an invoice for me or us If I collaborate with someone else, even been working in phases, I still charge 50% up front between two phases out an invoice the final payment for a face and simultaneously asked for the down payment for the next phase off our collaboration. If it's a success based project, make sure you at a note that the payment is due regardless of whether you've achieved the estimated goal or not. If there's any sort of liability. Make sure you clarify that in your contract to always make sure you add a sentence that old travel and accommodation costs are excluded from your firm. In case you need to make a trip, make sure down no questions as to who pays for it. Your payment conditions should those include how fast you expect your clients pain. The business centre in Europe is 30 days. Some corporate companies face six weeks later As a freelancer, it's most common toe. Ask your client to pave within two weeks. If you are a creative professional and your deliverable off a creative is of creative nature, you might also want to charge for uses usage right separately. I'd be transfers should also only happen after you've been paid in full. That way you ensure that your work is yours until you've gotten paid accordingly. If they use your work before they pay you, you can threaten them before lawsuit. Or, as Mike Montero would say in his famous creative morning stock, begin suit a hell out of them. You should watch his talk if you haven't already. I just don't want to mention the title because it would be explicit language. Also make sure to include the required tax or in case there is no text that applies at a sentence that explains wine up and mentioned the bill that a client can look it up. For example, business to business transactions between European Union countries have no V 80 because of the reverse charge plane. Okay, who? Two more conditions you might want to consider adding to your cost estimate. So a late fee You can say something like this. A late fee of 1% will be edit. If each invoices not paid within 15 days, an additional 1% will be at it every 15 days until the invoices paid in full and second is a termination fee in case of project based work or a notice period. In the case of time based Ward at termination, fee is an amount the client will have to pay if they step away from the project Midway. This is important because as a solo printer, you've reserved your valuable time to work with this company, and you've most likely not had any time to look for other fork out of projects. If you reserve several months for client, you must ensure you have a kill fee in your terms and conditions. And now we're even test me, you and which this part again, because it's really important. 8. Get the Client to Sign Off on the Contract! : depending on the size of your clients, they might have a legal department and contracts in place. Always make sure the contract includes older things I've discussed before. Usually, it's enough to get your cost estimates signed or the email approved us a binding contract. I'm no legal adviser. So if you're not sure, please check with a lawyer. I've created this class to give you a checklist of things to think about to keep you safe. 9. What if There Is Not Enough Budget? : so this is a tricky one. Sometimes the client gets Victor you and say they can't afford to collaborate with you. One of the things I've learned working at an agency is that if someone can't beautiful price, never just lower the price. Always adept what you offer. That's why it's, for example, a good idea to offer two runs of feet back that way. You can, for example, cut around the feet back and offered the charge pair are if the client needs more. Sometimes you just really want to work with a client, and I'm happy to offer a lower price. Nevertheless, we've all been there. If you don't see evade to make the price work, that's also fine. Just make sure toe calendar prices exclusive to them, and you charge us more to make sure they don't refer to you because you're cheap. Second, never idealized that a client will eventually pay you more once they have a larger budget. Usually, once a client can afford more, they'll go to a person that charges more. People, naturally wants to be able to afford something that seems more valuable to then. It's an interpretation of value, and you shouldn't have any false illusions about this because, well, once they put you in a price, break it. That's video remain, and it's unlikely Little change in the future, so I just wanted to put it out there. 10. How to Deal with Invoicing? : Okay, here we are, its temple invoice. I don't know your organization level, but I myself noted, if I didn't get the counting so fair from day one, my business would probably no longer exist. Some people are happy to keep track of their receipts and forgers. And why Excell and also use excellent Google Dogs or Microsoft Worth even listen, Invoices. I decided a long time ago that paying for fresh books every month totally makes sense because it keeps me organized. My editor, for example, uses the sado diminish her entire business. If you are a creative spirit, having so fair to keep you organized is most likely a very good idea. What you used to run your business is completely up to you, and I don't want to spend too much time on this subject. But I just wanted to add this So your affair A few options 11. What if the Client Doesn’t Want to Pay? : so I wish real. It's been a beautiful world there. There are never any issues, and everyone always pays on time. However, that's unfortunately not the case. In my field of work market thing, clients always have certain expectations and sometimes uncover issues that need to be fixed before a product can be successful. That's not always a smooth process. And so I've run into issues with clients not willing to pay multiple times. If your client doesn't want to pay and you don't have a detail contract, you might be on the losing end of Finks if there is a contract, even if it's a sign cost estimate. The email you and it clarifies you're right. Then you're right. It's vice to remember the most important details of your contract by heart. If a client cause you under phone to terminate your agreement, you should remember you're cancellation policy. If clients decides they want to pay you less because they change their mind for some reason , and that happens, you should remember what you agreed on or be fast enough to look it up and have it in front of you. Why they're talking to you if you don't ask to go back. If someone changes their mind for some irrelevant reason, you can always simply advise them to follow what's been stated in your contract. Sometimes clients will, once the Lord iffy and you should assess the situation so you can make a judgment better their request This fair or not? If not, don't make it personal. Simply tell him to follow what's been agreed on in the contract. From my experience Day might try to push back a couple of times, and you can be sure they will. But a contract is a binding agreement, and you have the right to get paid for the work you've done the time you have spent and the risk you've put yourself in a K. You should also get your cancellation fee. If a cancellation fee applies, you ever fit. And don't let anyone and any difficult client make you top that Who, Um, I will still a cane. I know that this is a difficult topic for most of us, and it's also difficult for me to talk about it. I just feel like the old needs to talk about it 12. Final Words: I hope this class was helpful and that you have learned some new things. I have published a number of classes here on scale share and have also African free books for creative freelancers. I would really appreciate a review for me. Also, I published regular updates on my block and have a secret mailing list for freedom. Says you can sign up for variety articles page on my website. I have a second mailing list under home base, so don't mix them up. I hope to see you there very soon. And also here in skill share in one of my other classes. For now, I issued a best of flak with your projects and yeah, bye.