Pricing Work in a Side Hustle or Freelance Business

1. Intro: Hi, my name is Teresa Christine. I am a travel blogger and a freelance writer, and this course is going to help you learn how you should price your work in a side hustle or a freelance business. I have been freelancing for quite a while now and I know when I started, I really wasn't sure how to price my work. I felt some very much like it was just guessing. I'm guessing that you are here in this class because you've experienced that as well. You don't really know what's the right number. You are afraid of guessing something that might be a little too low and then basically under pricing your work and you definitely don't want to price your work too high because then nobody's going to want to hire you. Finding that right number is very challenging because there is no guidebook when it's a side hustle, when it's a freelance business or a small business, you can charge whatever you want, but you still have to make it something that is fair, something that is fair for you based on your experience and the industry that you are in and also something that is going to be fair for your clients so that you are getting steady work. This course is going to teach you some really useful information so that you are not just picking this magical number that you hope works and instead you are actually choosing an educated answer to what your rate is, whether you decide to do an hourly rate or a flat rate, which is something that we're going to be talking about in this course. I will also talk about how to find your ideal hourly rate. Even if you don't want to charge your clients hourly, this is really like the core of it and that's going to be the first lesson that we'll get into. We will also be talking about, should you do custom quotes or is it better for you to just have some rate that you advertise on your website. How should you go about pricing your work? That's what this course is going to be all about and at the end, you are going to have all the information that you need, so that you can create a good rate for yourself, and the parts that you should include in a contract or a letter of agreement with a new client. So when they are bringing that contract to the table or you have to write it up yourself. You'll have all of those parts ready to go. I am super excited to have you here in class really all you are going to need is some place to take notes. Feel free to start a project here and make a note of all of the little tasks that we are doing throughout this course. Each lesson has a task at the end. If you do that work along the way, you will be well on your way to figuring out your ideal rate and what you should be charging clients. When you are ready to get started, you can head on to the next video. 2. Lesson 1: Where to Start: Hi, and welcome back to class. For this first lesson, we're going to be talking about figuring out your ideal hourly rates. This is a really important first step, even if you don't want to charge your clients hourly and you'd rather charged them maybe per project. You need to figure out your ideal hourly rate because that's going to inform the other ways that you can charge your clients. This is a really great first step. Now when you're just starting out or if you're still figuring things out, it might feel like you're just picking this arbitrary number. You're just saying, "I think, and this is the right amount." But in actuality, there is a real number that you can pick, that is going to make sense. It's just that you have to figure out what it is. That's what we're going to be figuring out in this lesson, and when, when I first learned about doing this, it blew my mind, and so I'm really hoping that it blows your mind in the same wonderful way. Basically what's going to happen is we'll be working backwards. Instead of saying, "Well, I'll just say I'll work for this amount per hour and hope that I make this amount per year," we're going to work the other way around and say, "This is how much I really want to make in a year," and then break that backwards into an hourly rate and say, "Okay, well, if I want to make this much, I have to charge this much per hour. " Again, even if you're not going to charge hourly in the end, this is still going to be very helpful for you. How do you figure out an hourly rate that works for you? It sounds complicated and it's actually crazy easy. The first thing that you need to do is decide what it is that you would like to make in the year, and this is basically your takeaway. At the end of the year after taxes and everything, how much money would you like to have in the bank? How much money would you have liked to earn? Make sure that you keep in mind, how much rent costs for you, how much you typically spend on going out, look at your past finances the past few months, and figure out what your spending habits are like just so that you have an idea and you're like, "Okay well, yeah sure, it's nice maybe to say that 40,000 is plenty, but really in a lot of metropolitan places, 40,000 is not a lot of money when we're talking about the United States and in US dollars. Additionally, you might say, "I want to make $300,000 my first year," and that might be a little bit ambitious, but go ahead and figure out like what it is that you would be happiest with, make it realistic, but still shoot for something that is fair for you because you should be paid fairly for your work. This is the not so fun step. You have to add on a certain amount for taxes, at least if you are located in the United States. If you are not in the United States, I'm not an expert on what tax situation is overseas in any other country. I'm honestly not even an expert in the United States. You want to look that up online or talk with someone who does taxes in your country to learn more about what you should be saving for that. In the United States, it's quite a large sum, unfortunately, 30-40 percent is what you want to have set aside. That means that original amount that you had from number 1, you want to add on 30-40 percent for taxes. The next part of this is figuring out how many weeks you're going to work in a year and know 52 weeks is not an answer. You need to make sure that you have time off, that you have time for vacation, that you allow yourself some time in case there is some family emergency or if somebody gets married and you need to take that time off. Figure out how many weeks you would ideally like to be working. Then once you have that, how many hours per week will you work? Figure out a number that's comfortable for you. You don't have to work 40 hours per week. You don't have to work 60 hours per week and drive yourself into the ground. If you want to work 30 hours a week so that you have more time for your family. If you want to work 25 hours a week so that you have more option to travel on the weekends, whatever it is, it can happen, we can make it work. Just know that when you choose a fewer amount of hours per week that you're working, that's going to make your hourly rate go up. If you make your hourly rate go up too high, especially when you're just getting started and not really established, you could be cutting yourself off from potential clients who just think you're a little too expensive. Again here be reasonable. Look back at your past to figure out what realistically you'll be doing in the future. If you normally work about 35 hours a week, then maybe you can try and aim for somewhere around there. Now basically this breaks down into the amount of money that you've got for the year. You want to make sure that you include a tax amount in this, divided by the hours for the year, and the way you figure that out is how many weeks you're working, multiplied by the number of hours you're working each week. That gives you the total amount of hours you're going to work in a year, and that equals your hourly rate. Again, the amount you make in the year, divided by the number of hours you worked per year, is the money per hour. It's the amount of money you're making each hour, that's your hourly rate. It's just on a larger scale than we normally think about. Another thing that's good to include in that original sum, like what you want to be making is any certain business expenses. Setting aside money for new supplies, for classes and education, your Skillshare membership, things like that that are going to be very beneficial for you. Your computer is not going to last forever, and if in five years you're going to need to replace it, why not start setting aside some money for it now? Why not build that into your rate right now so that when it comes time to buy that new computer, you don't have to stress about it. You've got the money set aside. It's been built into your rate because it's a supply that you need for your business or for your freelance work or your side hustle, whatever it is that you're doing. Again, going back to that formula, the amount of money you make any year, taxes and extras, if you want to add that in there, divided by the hours you work each year and that is going to be your hourly rate. Are you going to earn this amount right off the bat? Well, maybe not. This might be a bit of a dream right now. It might feel like a bit of a stretch, but it's an important number to have, and I'll tell you why. There are three good reasons. First of all, it's a really good goal to have. You might look at this number and say, "Wow, that's like probably way too much. That's significantly more than anyone might ever pay me," and that might be true. I think that especially at the beginning, freelance or underestimate how valuable their work really is, and there probably are clients out there who will pay you a very fair rate that is close to this, if not matching this. But if you're just getting started and don't have the experience, you might not quite be there. Basically if you're new, this is something you can work towards, and if you've been underpricing yourself based on your experience, you can then build up to this with your clients and let them know, "Hey, I'm going to be increasing my rates on this date, I wanted to let you know." That way they can be prepared for that. As I mentioned before, it also just opens your eyes. You're going to have a better understanding of what it is that you really need to make your life work because freelancing is so wonderful. Having a side hustle, having your small business, it can often feel like a passion project, but it can be a way of life. It should be a way of life. It's a way for you to make the money that you need to live and you should have the life that you want to live. This helps you understand how many hours you need to work and what you need to charge so that you can achieve that, and as I mentioned, it also helps you determine your other rates. If you're going to charge per project, per day, if you're a writer like myself per word, per illustration, whatever it is, knowing that hourly rate is going to inform this and that's going to help you in the future to figure out what to charge clients. For this task, you are going to determine your hourly rate. Remember, It's that yearly money amount divided by the yearly hour amount. It sounds a little complicated, but when you break it down, it's actually quite simple. I'll show you the equation here again. The amount of money you make per year makes sure that you include taxes that you have to set aside, as well as the extras, and then divide that by the number of hours you worked per year, which is your weeks times hours per week, and that is your hourly rate. Once you've figured out your hourly rate, go ahead and you are ready to move on to the next lesson. 3. Lesson 2: Researching Your Field: Welcome back to class. In this lesson, we are going to talk a little bit more about what other people charge, and this is an important part of figuring out your rate as well. Because you want to be competitive you don't want to be charging way too much, and you definitely don't want to be charging way too little because both of those can hurt you. It's really helpful to know what other people are asking for. Just understand that if you do decide to charge less or charge more, there should be a reason attached to why you're doing this. Maybe it's because of the experience you have, whether it's because you have a lot, or because you don't have so much, whatever it is, there should be a reason so that people don't look at that number and say, ooh, she's really under pricing herself, I guess she's not very good, or wow, he's asking for way too much, I know that we can find somebody who does just the same amount of work for half the price. Now, where do you find this information? I think maybe 10, 20 years ago, you would go to the library, but the Internet is definitely just the easiest option for you. The main thing is you want to make sure you're referring to resources that are up-to-date. If you're looking at something online that is listing how much people in your field get paid and it's from 2006. That's probably a little outdated and you want to try and find something that's in the most, 1-2 years recent. Also, you want to try and find a range of rates that people are going to charge. It's never black and white, it's never just, oh, this is the amount and that's it. It's never like that. You want to try and find what is someone who is very new in your industry charging versus someone who they've got a little bit experience under their belt versus someone who has a lot of experience. What are the differences there and how did they compare? Additionally, make note of how people charge clients in your field, there are many different ways that people can charge, and obviously the most common one is going to be per hour. But you might notice it's also per project, or it might just be per something else; per word, per minute, per page, per anything at all. As a writer, obviously, I'm most familiar with the per hour, per project, per word options, but there are different types of writers who work on different things than I do, and they actually charge per page. It just really depends on the project. You want to see what it is in your industry and how people are charging. Your task for this lesson is to find that information and find out what others in your field or charging. Remember to look for the different skill levels, see if you can find the variety in there, and how does experience play a part in the rates that people charge? Also look for how payment is based. Is it per hour? Is it per project? Or is it per something else? Once you've gone ahead and done that, make a note of that in your project, and then you're ready to move on to the next lesson. 4. Lesson 3: Pros and Cons of Rate Types: Hi, I'm so glad to have you back in class. In this lesson, I'm going to be chatting about the differences between charging a flat rate versus charging a custom rate for your client. This is something that is just essentially, it can change the rate that you charge and we'll get a little bit into it and I know that money stuff is a little exhausting to talk about so I figured I would throw any cute, adorable pug photo here because this is frustrating. There's no straight answer whether or not you should charge the same rate for every client who comes your way or should you create a custom quote per person. I am going to, however, talk about the pros and cons. Let's talk about charging a flat rate first and this is basically you charge a rate for every client who comes your way and that it's the same rate, it doesn't really change at all. The benefits to this. First of all, you can really easily advertise your rate, you can put it on your website. It feels very transparent and people are sometimes they respond well to that. When you seem a little mysterious on your website, if they're really just looking for a quick answer, if they just want to know, can I afford this person? That's something that can help them out. Also, a flat rate like this makes budgeting a little bit easier, not just on your end for, let's say that you charge 100 bucks per every project that you do and you're $200 short this month, you have to go out and find two more clients to get some more work. It also means that budgeting for the client that you're working for, for your freelance business, your side hustle, your small business, whatever it is, it makes it easier for them too, they know up front that there just paying that flat rate and it's good to go. The downsides to this are that you can't really customize based on the client budget or at least upfront, it really doesn't feel like you can. People who have a really big budget and are willing to pay and happy to pay more money, are going to get you at a steal and people who have a little bit less money won't ever have the chance to work with you, even if the project that they've got is really cool and something that you'd really enjoy doing. What if you want to charge per client? This basically means that you customize your rates based on who is hiring you. This is how I operate, I can't say that this is the best way to do it, it's the way that works for me. But really truly I can see the benefits and the downsides to both of these. But I will say this is the option that I tend to go with because I like to know, as you'll see in some of these pros, I like to know some of these things that are going on. First thing here is that you can create that customized proposal. That means not only are you going to be maybe a little more on the knows with what someone's budget is, it just feels more personal. Clients almost feel like they're getting this personalized treatment right off the bat, it's really nice. Also, you can charge more for clients who have a bigger budget and you're not cutting yourself off to those lesser paid opportunities. Some people disagree with this, they really don't think that you should charge more for clients who can afford more. I do you think that you should, I think it's a matter of what is it worth to this client for them to get your services. If they say, "You know what, it's worth $700 to me.", and normally you only would charge 500 for a project like that. It's worth it to them to pay 700, as long as your work is good and amazing, they're going to be happy that they spent that money. The downsides to charging per client. Obviously, you can't really advertise your rates as easily. I'll get a little bit into when you're communicating with clients, how you can phrase things so that you can potentially include that on your website. I will often quote people a range of an amount that I would typically charge for certain services. You could include that on your website just to give people an idea of how much you cost but it feels a little fuzzy. Another thing is it requires time to craft a proposal. You have to look at the information they're sending over and when it comes down to it, if you spend 15-20 minutes making this proposal for a potential client and they don't want to go with you, you don't get paid for those 20 minutes. The upside to this, if this is an issue for you, you build that time into the quote that you give them essentially, but it still doesn't change the fact that if they don't accept it, you don't get paid. Last but not least, when you charge per client and customize your quote, it's a little harder to figure out how to reach your money goals. As I gave that past example, you're $200 short in that month and you know, "I charge $100 per client so I just need to find two more clients." If you are fluctuating with how much you charge, you might not know how to reach that extra $200 in a month. So it's a little more stressful. The bottom line is you have to figure out what works best for you and like I said, unfortunately, there's really no answer here. It just totally depends on what you're most comfortable with. For this task, I want you to go ahead and think about those pros and cons and determine if in your line of work it makes more sense to charge a flat rate that you would just basically charge for any client who comes your way. Or if you have something per client and it really helps to think about past experiences. I know a lot of life coaches and they have these tiers of the kind of services they offer and those are basically flat rates. They just say, "If you want monthly coaching calls with me, then it's $500." I just made that number up. But just to give you an idea like that's a very transparent number, versus let's say you're a graphic designer and your freelance, and this new client comes along, maybe you feel things out and figure out what their budget is and you create a custom quote. So you just have to think about what is good for you and also consider your past experiences and where you'd like to move forward in your business. Go ahead, figure out what works better for you, and then once you are ready move on to the next video. 5. Lesson 4: Pros and Cons of How You Get Paid: Hello. Welcome back to class. In this lesson, I'm going to chat with you a little bit about charging hourly versus charging per project. With this one, it's the same. It really depends on you. It depends on your industry and goals that you have for your business, for your side hustle, for your freelance career. I am going to list out some pros and cons of each. However, unlike the last lesson, I do have a bit of a bias with one of these, and I do prefer one over the other. That said, I recently just took on a project that's the opposite of what I usually go with. So it just goes to show you that it really depends. I'll go into that a little bit later. So charging per hour, and this is an easy one. Basically, for every hour you work, you get X amount of money. The big pro to this one is that it's familiar. Everybody knows about hourly work. Probably, your first job when you were in high school or maybe in college. You worked hourly and you probably, right before payday, you are adding up your hours and trying to figure out how much money you're going to make. We know what that feeling is, working hourly. So it's familiar. You know it as an employee or as a freelancer. Also, clients and employers know it too. A big benefit to charging per hour is that if the project ends up taking longer than you anticipate, you get paid for that time. Let's say, I'm going to take on a project. I think it's going to be about five hours, and it ends up taking 10 hours. It takes twice the amount of time. Well, if I worked for $10 an hour and I only did those five hours, I get $50. But when it's the double amount, I get double the amount of money as well. So if I were to be charging a flat rate for that project, I wouldn't be getting any extra money for that extra time I'm putting in. The cons of charging per hour. First of all, you don't know how much you get paid until afterwards. I was just talking about that. How, right before payday when you had an hourly job or have an hourly job, your kind of counting up your hours to figure out how much you're going to be making. That's a downside when you are managing your own business, or you're a freelancer, or this is your side hustle. It's kind of nice to know what amount of extra money you're going to have coming in or what amount of your income you'll have. It also hurts the client a little bit, because they might struggle with how much to pay you. They might not know how to budget for you. Because, one month might be really busy, and they end up paying you for 20 hours of work. Another month, isn't so busy, and they only end up paying you for 10 and they might say, "Well, that was kind of nice that 10 hour month or 10 hour week." Like that was kind of nice to not pay so much. Then they might pressure you in a way to work fewer hours. It creates a weird imbalance where clients or employers, they want as much as possible from you. But they want to pay less than your worth. The big one here, if you work efficiently, your hourly rate goes down. This seems a little confusing. So I'm going to go into that, right now. You might be like, "Wait, that doesn't make any sense." What? Lets just say, I pulled this number, I just made it up. Let's say that I start designing graphics for a website, and I'm going to charge $40 an hour. Again, I made that number up, but let's just say that's what it is. So it takes me one hour to complete three graphics. I take three graphics in an hour. That means I get paid 40 bucks an hour. Great. Once they become more familiar with what the company likes and the things they like to feature, I can actually get the same amount done in 30 minutes. That means that I work 30 minutes and I get paid for $20, basically, for getting three graphics done. Or I add on three more graphics into my hour, and I'm still getting paid $40 an hour. But instead of three graphics, I've done six. So I've done twice as much work, but I'm getting paid the same amount. Basically, what it means is in the end, I'm more experienced. I know the brand better than other graphic designers. Yet here I am, doing twice as much work and not getting paid anymore for it. I'm getting paid less than I would, actually. This is where charging per project comes in. If you can't tell already, this is my preferred way to charge clients. This is basically a rate that is not dependent on the time that it takes to complete it. So it's going to be per project, maybe it's per page, per illustration, per photo, whatever it is. You charge that rate per project, and it doesn't matter how much time you spend on it, you get paid the same amount. Why is this a good thing? First of all, you and the client know what to expect with money. This is good for you because you know what to budget. This is good for them because they know what to budget upfront, also so they can set that money aside. You can maximize your hourly rate. I'm going to go back to that example in a minute, that I was just on, and talk about how that works exactly. You also don't need to worry about logging hours. This is just something that I find is a pain in the butt. I don't really like having to log my hours. I really, firmly believe that as long as I get the work done and do it well, it doesn't matter how long I take to do it. I feel like I always forget to log my hours, no matter how many apps I've tried, I always forget. So with this, you don't have to worry about it. There are still downsides to charging per project. Obviously, if this project takes longer than expected, your rate isn't as good. So that example I used before. Five hours, in an hourly situation, I charge $10 per hour. But, let's just say I decided to charge $50 total for a five-hour project, but it ends up being a ten hour project instead. Well, I'm not going to get paid anymore than $50. So really, my hourly rate goes down to $5 an hour, and that's not very good. It's also very difficult to predict at the beginning. I think this is why a lot of people shy away from charging per project at the beginning. Because you just have no idea. You don't want to find yourself in that situation that I just mentioned above, where a project takes way longer than you expect and you're roped into finishing it, even though you're not getting paid anymore for it. Now, let's take that one example again and break it down. Thinking about it in terms of per project. So I start designing graphics for a website. I charge $40 for every three graphics. Now at first, it takes me an hour to complete three graphics. This is the same situation as before. I was doing three graphics in an hour, and I got paid $40 an hour. But I eventually become more familiar with the company and what works for them and I'm able to get three graphics done in 30 minutes. This means I can do an additional three graphics for them and have an hourly rate of $80. Or I might go ahead and just go ahead and cap it off at 30 minutes, and say I did my three graphics, that's all they needed and I got the same amount of money, $40, but in half the time. That's where a project situation is really nice. Basically, like I said, you're rewarded for doing more work and for getting it done more efficiently. I like to think of it too, is that extra 30 minutes, like I said, you could spend it on doing three more graphics for the site. Or you might just add in more work for the clients so you can kind of maximize your rate there. Something I really did not understand until I started freelancing is that time is money. Time is money. I can't emphasize it enough. It's just when you spend, just imagine sitting at your computer or whatever it is that you're trying to get done, and you spend 30 minutes just looking at Facebook. You just wasted 30 minutes of time that you could have spent doing those three graphics and getting paid that $40. In the same vein, if you are trying to get as much money as possible per hour, you can't really go past a certain amount if you charge per hour. You want to charge per project because then you get more efficient, you can get more done and you can pack in more into an hour's amount of time and maximize that rate there. You might be wondering now, how do I get that flat rate from my hourly rate? You've figured out your hourly rate and less than one. How do you get to this flat rate now? Basically, it's a little bit of a process. If you don't already have an idea, you're going to want to start tracking how long it takes you to work so that you have a relatively good estimate on how long something will take you. For me personally, when I started just blogging on Tremendous Times, it took me a very long time to put together a post, like over six hours because I was new, I didn't know what I was doing. Now, I can get an entire post done, drafted, written, edited, images, social media, the whole shebang, in under three hours. If someone came to me and they were like, I want you to do a project like you do on Tremendous Times for my blog, I would have a relatively good idea of how much time that is going to take me. As I mentioned, this is really hard as a beginner, but it does get easier. Truly what's going to help is starting to track now how long it takes you to get certain things done. Just make a note of these things so that in the future when you have these potential clients asking you about doing certain projects, you'll have a pretty good time estimate and you won't just be guessing, this is my ideal hourly rate and I think this will take me five hours. You'll have a much better idea and a much clearer idea of what to charge. The other part of this is, how do you convince a client to pay you per project rather than per hour? Because as I mentioned before, clients also are more familiar with paying you hourly. Just like your first job in high school was probably an hourly job, this is what clients are most familiar with and they can kind of cling to this idea of paying people hourly. It's a little frustrating and it can take a little bit of work to explain to them that this is actually better for them. There are two ways to do it. First of all, highlight the fact that this is going to vastly help them with their budgeting. They will not have any surprises since the amount is fixed. Just a side note here, you can go ahead when it's a flat rate like this, ask for a bit of a retainer upfront, ask for a deposit and then the rest they pay when the project is complete. That really helps them just ensure that they're investing in you and ensure that they know how much money to set aside. The other thing that you can mention is that this basically shows a dedication to the project and a commitment to complete it, rather than to have it drag on so that you just accrue hours. You want to see the project through to the end. You want to get it done efficiently. You don't want to have this drag on forever and ever. You want to get it done and make it the best it can possibly be. That's really what you want to try and emphasize to a potential client. You might be thinking all this talk like per project is the best way to go and per hour is a bad way to charge and that's not true. As I mentioned, I just had a client come to me and we both agreed a per hour payment was actually going to be better for this project. It really just depends. You have to choose what makes sense for your industry and for where you are in your career. But do remember that a flat rate allows you to maximize your earnings in the end. You might be a little hesitant to get started with it, but you have to start somewhere, so really just dip your feet in with a somewhat smaller project, track your times and you will learn from there. Task time. I want you to think about what you might have charged per project for the last job that you did, or maybe for one that you hope to do in the future. Maybe you've got a client already knocking on your door and you're trying to figure it out right now, remember to use that original hourly amount to figure out this per project rate. Additionally, with a per project rate, it's not just hourly. You can also include a bit of that prep time. Remember, we talked before about, you spend maybe 15 to 20 minutes creating a quote, well, build that into your flat rate. It can be all encompassing. Once you've gone ahead and figured out what you will charge per project, whether it's for your last job or something that you hope to have in the near future, then you are ready to move on to the next video. 6. Lesson 5: What's Next?: Hi there and welcome back to class. We are going to now get chatting about how you proceed with an interested client. Let's say you've gotten interested client, that cat is cheering you on. These are some things that you will want to keep in mind as you move forward. First things first, you might be wondering, how do I bring up the topic of money? Well, first of all, I know that money is a weird thing. People get strange about it. But you should not be afraid to bring up a budget. Because you deserve to be paid for your work. You might go ahead and figure out that the best way to get the conversation started is to just ask and see what their budget is. This is really useful. If you're trying to feel things out and you want to just see if they're able to afford you, or you're trying to see what is an educated quote for you to give them. Particularly helpful if you create custom quotes. You don't want to undershoot things and you don't want to overshoot. Another thing, it's always really nice to find clients who are willing to pay your rate or maybe even more than that, without you really having to negotiate much. Again, this helps you from aiming too low and also aiming too high and maybe shutting out a client who you really want to work with. The downside here is that you might find that you struggle to be a little far from their rate in the negotiation. You might have your rate in your mind and if they list their budget first, then you might feel like, "Oh, I can't see my rate because it's so much higher than that or because it doesn't totally match up." If you were to go ahead and unless your rate first, then perhaps the opposite is true. Meaning that they would maybe try and meet your price a little bit more if they could. I don't know how I feel about that. I think that asking for the budget up front is a really good idea just to feel things out. But there are some people who think that you should start the other way around, and list what your rate is. I've got some recommended reading at the end of this lesson that's going to help clarify what might be better for you and just give you some opinions on what's the best choice for your industry and for your experience. But basically, in an e-mail you were just saying, " What's your budget for this project, how much were you thinking of spending on this?" Another way to approach things either instead of or in addition to the previous slide is quoting a range. This is something I do very often because I feel a lot of times I won't get all the information that I need up front and I'll get general idea of what they're looking for and they want a quote. If I'm interested and I want to pursue things, I'll let them know, well, for this type of work, I typically charge between this amount and this amount. It's really a great option when I feel like I still need a little bit more information from them. I can keep that conversation going and still feel a little transparent. They don't think I'm hiding something from them. It also let's them feel out a little bit and say, okay, like she's in her price range or "Oh, well, we were hoping not to spend over this amount, but you sound really great" and basically just open up that conversation. You do want to keep in mind though, that lower end of the rate, so that x amount is still something you should be comfortable working for. It shouldn't, well, this is just the lowest rate that I could humanly possibly do. It should be something you still feel good about. Another thing you want to keep in mind is to charge more for rushed jobs, because when it's a last minute project, you're really valuable to them. The way I like to think about it is basically you're working overtime. A rush job will either just push back your other work to another week or you're going to be putting in more hours in your work week. Basically you're doing overtime and you should be compensated the way that people who get paid a salary with overtime get compensated. Additionally, money is important. This is an entire class about pricing your work. But, what's really going to sell you is not just the money amount. What it is, it's going to be so much more than that. It's what you bring to the table. Clients don't just want to know the amount of money. They don't want to see an e-mail that says, " I charge this much." Then you sign off. They want to know why you're good for the project. They want to know why this kind of project excites you? Why you're interested in working with them? And what it is that you bring that no other person in your field can bring to the table? You will have so much more to negotiate with and you'll have way more success with negotiating when you highlight your experience and your skills and passion for the project. Don't just seem like you're interested in doing a project for the money, but actually you seem interested in doing it because it's something you want to do. Then of course, you want to name your price. This might be a little bit based on what their budget is. You might be quoting something and crafting something off of that, or it might be just a flat rate that you've determined this working class, or it might be a combination of both. The bottom line now is be confident. You want to be so confident when you name your price. Even though a lot of times and I quote, I send quotes to people, I'm flexible with my rates because I create custom quotes. I never say this is negotiable. I feel like saying my rate is negotiable is almost like a form of weakness so I say, " Well, for this project, I'll be doing this, this, this, and this, and I would charge this amount. Let me know what you think?" You want to list out what that cost includes. Again, you list the price and they're, like, " Okay I'm looking at the amount of money here." Then they see all the great things that you're going to do for them. Because clients wants to know what they're paying for before it comes time to sign that contract. We will talk about contracts in one of the next lessons. Recommended reading time. I've got a couple of useful articles here for you. There are two of them in there, and I just want you to check those out and read through them. Hopefully they'll shed a little bit of light. I tried to find some articles that supplement what I went over here in class. If you have questions about these, make sure that you use the discussion area. I'd love to chat about them in and see what you thought about them. This document also has some assignments for future videos, for future lessons as well in this course. Hang on to that and just keep that link. When you have done your recommended reading ask any questions in the discussion area that you need to, then you're ready to move on to the next video. 7. Lesson 6: Negotiation Tips: Hi, and welcome back to class. This lesson is all about negotiation time. So a couple of negotiation tactics and things to keep in mind as you're just trying to nail down that rate. Now obviously, in a perfect world, your client says "yes, so absolutely pay you that amount". But you probably guessed that is not the thing that always happens. So what can you do? First thing you can do is to stand by your original offer, and this is uncomfortable, obviously, but it's a really necessary part of a side hustle or freelance work or small business. You have to have confidence, you have to stand up for yourself. If you really feel like you can't charge any less for this work than what you've already told them, then that's the way to go. Basically, you will simply explain to them, you can't reduce your rate. You hope that they understand and re-emphasize what you bring to the table and why you are the best person for the gig. It's really helpful to paint this picture for them of what the solution will look like. Because that can be very tempting for them to say, "well, I didn't think about it in that way. That would be super nice to achieve that. Okay, we'll go ahead and hire you". They may come back and say, "sorry, we really can't do your rate, and that's it". But at least you stood your ground. In the recommended reading for this lesson, there's actually a story of someone who does this, who stands by the original offer and they end up getting it in the end. It's a really cool story. I look forward to hearing your responses to that. Now, another option is you can go ahead with what they counter-offer or negotiate a rate with them that is lower than what you originally quoted. This is a good option in some situations. I know that as a freelancer, I really don't feel like you should ever be doing work for free. You should be getting paid, what you feel comfortable getting paid for your work. But there are situations where this is good. Maybe there's a non-profit client who has values that align with yours, maybe you're just new on the scene and you're trying to get some experience, whatever it is. If you've got a good reason to do this work and you're still passionate about it, then go ahead. You can do it for that lesser amount. The bottom line is you should feel good about the project still. So if suddenly you're not making as much money on it and you're not as excited about it, then don't try and force that situation. Also in the recommended reading for this lesson, there is a story of a man who actually gives half of his work away for free. He's a very well-known designer and he does a lot of work for non-profits and he doesn't charge them at all. So this is a really interesting profile on him and the work that he does and how he makes an actual living doing that. Again, negotiation isn't just about the money. So you want to be highlighting other things as well, and you're working for less than you originally quoted. Let's say that that's the situation. That doesn't necessarily mean that you just get paid less and you're doing the same amount of work. Maybe you can craft up something that suits your time investment, that's a little bit better. For example: Let's say a client wants to hire you for 10 illustrations, but at a lower rate than you normally charge. Do you think that maybe you can negotiate down to fewer illustrations? Yes, you're getting paid less money, but you're also doing less work. So it's not, "well, they couldn't pay me my normal rate for 10 illustrations. I'll just do it at a lower rate". It's "okay, well, you can only pay me this much? Then I can only do these many illustrations". I had to do that recently with a client. They were like, "this is our absolute max, and I said, "that's fine. I can work with that budget. Just so you know, I won't be doing quite as many blog posts per month". That worked out. I'm staying within their budget, I'm getting to do the work that I want to do, they love working with me, and it all works out. You can also strip down the services that you provide. Let's say the client wants to hire you for social media management, and instead of doing Instagram, Twitter and Facebook, maybe you just do two of those platforms instead. Or maybe you do the three platforms, but you do, I don't want to say water down, but a not quite as intense version of that. That way, again, yes, you might be getting paid less money than normal, but you're also not doing your full amount of work that you normally do. Of course, you can reject their offer. You really want to be gracious here. You do not want to burn bridges ever. I have people emailing me all the time asking me of I'll do this work for them. They ask me to do it for free. I really rarely do work for free, if ever. But I'm never going to email them back with some snarky remark. I just say, "I'm sorry, I can't take on unpaid work right now". Here are a few other examples of ways that you can politely reject and make it so that you're not just being a jerk to them, even if they are being a little bit disrespectful of you. Also, maybe you've been doing this back and forth with the client and you really want it to make it work and it just didn't, and that's okay. You can talk whether it's about the rate or you might just tell a little white lie and say, 'I've got too much on my plate, I can't do this, but best of luck". You can also say things like, "I wish I could do this, please keep me in mind". Another thing is, maybe you can refer them to someone if you think it's a really good project, and you know somebody who might be good for it, go ahead and refer them on, that is a really good way to build your community in a freelance business, a small business, or a side hustle. You do want to stand your ground. I said this is about confidence and it can be a little scary, but you do want to sign up for yourself. At the end of the day, whatever the rate is, whether you are working for free, whether you're working for twice what you normally work for, it should be something you feel good about, and not just because of the money, it should be because of the project itself. You do not want to buy into the scarcity mentality. There are always going to be other projects. I do this all the time myself. I think what if this is the last paid project that ever comes across my desk? That's not true. There are always going to be other projects to come by your desk. So leave your time and mental energy open for something that comes along that is a much better fit. That is someone who can pay you what you're worth, that is a project you're genuinely excited to do. Last reminder, be nice, as nice as you possibly can. Leave that door open if you want to keep it open because people do talk and you want to have a good reputation. We're going back to that recommended reading list. There are two more articles in there that I want you to check out. Again, I will love to hear your reactions to these articles. Go ahead and leave those in the discussion area below. Once you've done that, you are ready to move on to the next lesson. 8. Lesson 7: Contracts or LOAs: Hello and welcome back to class. This last lesson we're going to talk about get it in writing, basically, have a contract. Now this whole thing about negotiating your rate, figuring out your ideal hourly rate, quoting, individual quotes for people, whatever it is, this might still feel really new and that's fine. It's going to take some trial and error to get more comfortable with all of this that's expected. But what else is expected is a contract. You always want to have a contract, even if you're doing work for free, even if you know this person who you're working for. Even if you think it feels weird, oddly formal, have a contract. I think people imagine a contract is this thing that you have in place so that you can sue somebody if they don't do what you want them to do or whatever and that's not true. Yes, at the end of the day, maybe that's what you need it for but I think that those in very rare occasions, really, it's just a way to make sure everyone understands the terms of your assignment completely and they agree to them that's all that it really is. It's not so that you can see what other people get so strange about it but it's just to keep things in place and to be extra clear about Them. What should you include in a contract? I'm going to go through these things individually with you and then I'll have a list of all of them on one page. We'll go through individually first. First thing is the deliverables, this is basically like what are you doing for them, that details exactly what you're doing, the different little parts you want to break it down. If I'm writing a blog post for a client, I don't just write one blog post. I write one outline, research for set article and at least three backlinks in the article. I link to previous articles they've got on their site, things like that. They know exactly what to expect and what that piece is going to look like. Next is deadlines, you want to set them, you want to stick to them and if you can get things in early, it just makes a really good impression. A termination clause, it always feels extra formal but you don't have this in there because let's say that you're doing work and you're getting paid for it. But what if this company decides to cancel the assignment halfway through? What if you deliver something and they just don't like it at all? or what if you submit something and they never publish it or use it? What happens in those situations? Do you still get paid? Do you get paid a different amount? You want to have some termination clause in there just to protect yourself and for them to protect themselves well. It's also good to list out what isn't included, the opposite of what deliverables are. For me, as a writer, I very often will state, I don't include images. That's something that a lot of times people expect but I want to be up front link. I'm not including images with this, you have to source your own images and figure that out. Think about any additional assets that are generally associated with your work which you don't provide. It can be as simple as like a word document versus a PDF, maybe you only give them the PDF for something so that they can't go in and edit things like that. You give them a finalized PDF versus a word document, which they can go in and use an edit and all of that good stuff. It's totally up to you, what you don't include. A very important thing to do is list how many revisions you'll do. Basically like a maximum number of back and forths with the project and this really helps to prevent a client from coming to you and saying, just one more thing, that can go on. If you've ever had a client who just keeps coming back to you with one extra little thing, make sure that you put a maximum number of back and forths because that's going to make them a little more serious about their conversations and correspondences with you. Also who owns the rights to your work. If this is something where you're producing work for them versus maybe you've got a service like if you're a life coach, this doesn't necessarily apply to you but let's say you're creating work for them, more than likely if it's a contract position like you're not an employee, it's pretty much always going to go to the person who hires you, they own the rights to it. But I'm still like it all just depends. You want to be clear on who owns the rights to this and on a basic level, like, can you use it in your portfolio? Can you share it? Can you include it on your site? Can you republish it elsewhere? Things like that. This is the big list of things that I was talking about. Deliverables, deadlines, termination clause, anything not included, revisions and who owns the rights? These are the six things that I just covered that you want to look into and every industry is different. Please look into your industry and figure out the typical deliverables and what is a reasonable deadline? Who owns the rights? I'm really like I'm not a lawyer, so I can't give you very good advice on that, very specific advice. You want to go in with that information and of course, payment details. How much are you being compensated for this, if anything at all? Hopefully you are. How are you going to be paid? Is there a deposit that the client pays up front? What are your invoice terms or unit 15, net 30, all of this stuff. It should be listed out in some part in your letter of agreement or in your contract. A lot of times people use those as interchangeable terms. I just say contract because that's what it is to me. You want to list this out, so that there are no surprises and they're like, you're not 15, we only pay net 30 and then that's an issue. When you get that figured out up front before a contract is signed, then you can be like, okay well, net 30 is fine. Or like can we do net 20 or something like that? Task time. This is the time for you to create a sample contract. As I mentioned before, the word contract and letter of agreement, they're often used interchangeably but I like to use the word contract because it is more of a legally binding document. You're not necessarily going to use this. A lot of times clients will have one that they want to have you sign and you just have a look over it, make sure you agree with it all. Feel free to ask them questions or consult with your lawyer if you need to. But it's nice to have one in case you have a client who just doesn't have a contract and by creating your own, it's going to help you figure out what you should be looking for. Now you don't have to make this from scratch. In that document where we had the recommended reading, you probably noticed at the bottom, there's a link for you to go to and it's got a couple of useful documents that you can use. Head there and that's going to help you figure everything out. Go ahead, get to work on that sample contracts, see how things go. Let me know if you have any questions and once you are done, you are ready to move on to the next lesson. 9. Some Final Thoughts on Pricing Work: All right. You made it to the end of class. I really hope that the tasks in all these lessons have helped to demystify how our work is supposed to price your work. Now instead of just making up an arbitrary number and hoping that it is the right number to be charge on clients. You feel like you have a much more educated idea of what you need to be letting your clients know you charge for your product or your services. If you like this class, I hope that you leave a review. You can do that down here and also check out my other classes. I teach lots of classes here on Skillshare about writing, blogging and having an online business and basically being an entrepreneur. Of course, please let me know how things are going in the discussion area below. What questions do you have? What are your reactions to the recommended reading? Let me know. That is our area to discuss things and chat and I'd love to hear what your thoughts are. All right, it's like a really wonderful having you in class. I hope to see you in another discussion class very soon.