How to Price Projects as a Freelancer

1. Class Preview: Do you want to know how to price that freelance project? Not sure whether to do it hourly or a per project flat rate. Not sure where to start your hourly pricing. This class is going to be for you. This is a short class that teaches you my pricing strategy. I have been a freelance graphic designer for 12 years. I've had to price negotiate pricing for hundreds of clients, old and new. I approaches classroom a creative freelancers perspective, but this class could apply to anyone in freelancing, so, as always, let's learn together. 2. Sizing up your client - The 3 Tier System: the first thing you want to do it size up your potential client. Usually a client contacts E V a personal connection, a referral on online email, even linked in up work for another freelance site. Referrals are my favorite because most of the time the referring client is a similar size and scope to the client that is being referred. But everyone else is a bit tricky. Tell me, Get started my prices project. I divide everyone into three different tiers. First, here are the clients that have small businesses these air, usually the mom and pop shops. Sometimes they're nonprofits, and a lot of times they're personal friends. These people usually have a small staff, if any. Sometimes there's just only one employee, and they're looking for a freelancer to help Warren cut off a support capacity or to help support their staff and whatever they're needy. Employees are usually less than 10 people. The second tier of clients have a little bit more of a regional influence. They have some brand and name recognition in the community, or they might be a little bit of a larger local company. They usually have around 10 plus employees eight or nine. That's possible, but kind of definitely in that 10 plus category. And they have a decent marketing budget. Not great, but they have a marketing budget. The final or third tier is the highest tier client you could hope for their large and in charge. And the possibly even national companies are well known companies or organizations. You'll be brought on as a freelancer to assist in the in house team, our agency, or to assist in employee of the pressure and timelines you have to meet with. These clients are very intense, and so they deserve the highest rate possible. Once I assigned a potential client to a tear, I can have a better idea of where and my pricing rain check in charge. The higher the tear, the higher on my pricing skill I will charge. Here's my hourly rate for graphic signs services. Obviously, Tier three clients the most profitable, but they are much harder to come by the goals to move from only Tier one clients to mostly tier two or three clients to increase your hourly or per project rate. Having a flat rate. Our project rate across all clients is a mistake you might be leaving money on the table with your slightly larger clients who can afford more. It's all about maximizing your rate and money made. You also want to be reasonable with your rate and at least fall into an average price. Rains. For your experience in industry, most of my clients actually fall into the Tier two range right around this area. The Tier three range is great for profitability, but it also comes with a higher amount of stress and deadlines. And sometimes those deadlines leave you with less flexibility to have multiple clients. So weigh the pros and cons of a Tier three. Create your own scale, one for hourly rates and one for flat project rates. It gives you the ability to have a system when pricing, as opposed to feeling like you're picking a random rate or number out of the air. This gives you a little more confidence. When presenting your price to the client, I offer more than just grab design services. I also offer Web development services and copyrighting and marketing services. My Web development services air, usually about $10 higher, cross all tears. That's because the industry demands a higher hourly rate. So I charge different rates for different services. Same goes for copyrighting, which tends to be lower on my scale than my design services. So how do I figure out what prices my industry average? A pretty good website check out is called up work dot com, one of the more popular sites for finding and posting freelance work. For example, search for graphic designer with similar experience and profile and see what the Our Liberty I really reach their charging same thing for Web development, virtual assistant, copy writer and illustrator. It gives you kind of a general idea of where to start. If you're working with someone locally and not on a freelance Web site or online, you might be able to get away with charging a little more since the employers not having to pay a little bit on these websites to find freelance work. So how do I know what is the most profitable? Do I charge hourly, or do I charge a per project flat rate? We'll discuss that in the next video 3. Hourly or Per Project? : how early are flat rate? This is the big debate freelancing. Should I charge her project or a flat rate for hourly? Some projects you can actually make more hourly. Others by charging per project the safest way to charges. Our you're guaranteed that every hour you put into the project, you will get a predictable amount of money in return. Although this is the safest bet, charging per project or flat rate can be more lucrative and profitable. I usually recommend new freelancers to start off with that predictable hourly rate. It makes it easy to predict a cash flow for more experienced freelancers or people who are interest free experts. I highly recommend a per project quote I showed you in the last video. How much I charge for hourly designed services has taken me a couple of years to get comfortable quoting for a per project rate. The danger of a per project rate is that the scope of the project starts to change. That means the original quoted project, for example, a Web design project starts to turn into something more complicated than originally planned , or you run into problems that need more time to fix The only way I quote a flat rate project is by making sure I sign a contract with my client. That states. If the project exceeds the overall original scope of the project, the contract and the rate may increase. The extra work outside of the original project or quote is now quoted as an hourly rate until the project is complete. It I love to charge per project for projects I do. Often I know how much time it takes into a local design for a tear to client. I will charge what I think is industry average for a local design based on my experience, which is 10 plus years. And I will try to complete that project and this little time as possible, but also keeping my quality up. In some instances, if I charge, for example, $500 for a basic local design for Tier two clients, my goal would be to complete the project in about eight hours or less. So $500 divided by eight hours, is around $62 an hour, a much better hourly rate than if I were to charge my tier two hourly rate. I can do this because I'm comfortable guessing how much time it will take me to complete the project. If I was not comfortable knowing that or if I was new to freelance than that hourly rate would be quoted, I'm gonna give you another example of a per project rate where it can work in a negative way. So let's say I have a nonprofit Tier one client. They don't have a huge budget, so I quote them only $1000 from the Web design project. Well, sometimes Web design projects can easily take 40 plus hours. If I was gonna take 40 hours and, um, figure out how much my hourly rate would be for $1000 it would only be $25 an hour that I would make. And if the project went be beyond the scope, which happens? A lot of Web design project that could spend 50 or 60 hours. My hourly rate could drop to $15 an hour, and they may not have any additional budget money passed $1000 to give me. So it really depends on the client as well. Ah, when it you've got to figure out if he wanted to hourly quote or per project personally. For my business, I use a free and voicing website called ZIP books dot com. They offer free and voicing, but they also have an ability to create a quote for an estimate. It looks just like an invoice, but it's an estimate. This provides a nice professional envoys or quote that you consent to a client and look top notch. I like to break down my pricing as much as possible to really marked make sure and clear and transparent to the future client. I think that goes a long way into winning trust. 4. Let's Do a Practice Quote!: we have mystery client number one, and he's ready to get a quote from us. Let's see what's better hourly or per project. Great. Good afternoon. I was looking to see how much it would cost to put together some social media posts and graphics around five. For now, I heard you were good at this. We're a small local companies that are growing fast. Quote for your services would be fantastic sooner the better. Now that you taking what you've learned from the first video about the three tier system, you've done your research and you figured out what's a reasonable hourly rate for your industry and what you're doing. And I believe this is a Tier one client, but they think they can start to fit in the Tier two clients and they say they were growing and they have a little bit of a marketing budget for this. So I think they're gonna fit somewhere right in this range. So let's do at the bottom of tear to for our hourly rate. Now let's see if I per project will get us more money. So let's take a look. If this is a social media graphic, okay? $40 apiece is fair. He wants five of them. I could charge about $200 flat per project. Great. So which one's the winner? So let's go ahead and compare the two with an hourly rate. I can probably get anywhere from 30 maybe even all the way up to $45 an hour for what he's requesting and the industry average. If I do a project great, I think I can charge a total of $200. And how I got to that is, I think it takes me around 1/2 hour for each social media graphic. So I multiply that by five and get $200. So I think we found our winner. Our winner is the per project Great. So it $200 an hour, half hour for you. Social media graphic. It comes out to $80 per hour, which is much better than before $2 or less. I could have gotten if I just quoted an hourly rate. Okay, so let's go into our estimate software and go ahead and develop an estimate. So I just went into Zipp books because that's what I use. I talked in my $200 quote I'm able to export as a PdF, send it to the client, and hopefully they will accept. I hope you enjoyed the short class and got a little something out of it if you enjoyed it. I love to hear feedback, and I absolutely love reviews. I also have a going freelance glass and some other classes. So click on my profile and check him out. Thank you. And good luck. 5. Pricing Question and Answer!: great question as someone who does Web development branding, graphic design, social media management and marketing of charge of many different rates at many different times, depending on what skill on being contract it to do. In some cases, it could use all open for one project. I did a local design once for a small tear. One client. They only had a budget of around $200. I spent about an hour coming up with some concepts and Adobe Illustrator and sent them along in an email with a few mock ups. They love one idea so much they did not want to change or modify it. Well, maybe a slight color change, but that was it. I spend another half hour preparing all the vector and other file formats for them, and they were happy. So for $200 divided by 1.5 hours equals about $133 an hour. It might not be my biggest job, but time ended up being rewarded, even though it's just a little client and a little job thing is always so tricky. My goal is to always get the client to reveal their budget in some way. I do this by asking questions about the project, more details and helps me size up their expectations if possible. I asked them first, with their budget is where they're expected rate they want to pay me. After that, you can respond. This puts the ball in your court. This is the same for any price negotiation. Let them lead first with the price and the new gets counter. There are many times when the price or hourly rate ahead in my head was so much smaller than what the client ended up presenting. I could have quoted first and missed out on some profits. If they drive a hard bargain and decided your quote was too high, you can either lower your price or stick with it. A lot of times they do like you and want to use you, but there's trying to get the best deal. It's up to you, but if you have not the lowest I want to be, I'm gonna stick with it. Most of the time, my client ends up going with my rate because my work was good and I was worth it. They're just bargaining. Not everyone just accepts the highest price without a fight. Would you buy a car from a car salesman at the first quote they give you? Absolutely not. You can't expect them to do the same, either. It's because we pay for our own health insurance, retirement and perks. We do not get free coffee in the office, and a lot of times you pay out of pocket for software each month. I know I do. We spend hours each month creating or invoices doing our own accounting, and these hours are not paid. So never compared a salaried or in house person with freelance rates that in house rate is usually only $25 an hour. For, Let's, say, a graphic designer in the United States and freelancers, weight rates will be at least double that, especially if you're gonna be working freelancing for a larger organization. And for good reason. Do not use in house rates to determine your worth as a freelancer, because when someone works for you, they're getting the accounting software that flexibility on perks that go with it. I want to hear what other questions you may have feel free to put your question in the discussions tab and let's start a conversation. If I get a couple of great questions, I'll create another video just like this.