Freelancers: How do you figure out what to charge your clients?

There’s a huge debate among many freelancers: how you go about figuring out the price of your services and then how to go about translating that price to your potential clients. There’s one group who feels the best way to charge is by the hour. Basically, you figure out how much you need to make and how much work you expect to do and break down that large price into a per hour rate. Then, there are some who come up with an overall total price and will present that to the client. So really, which is best? In my opinion, a combination of both. Each has its pros and cons and it comes down to you and your business model.

Charging an hourly rate
This is probably the popular, old standard of freelancing. Many designers will tell you that their hourly rate is something like $30 and whenever someone approaches them about starting a new project and inquires about the price, rather than telling them what the total charge will be, they will tell them their hourly rate. The good thing about having or knowing your hourly rate is that it means you’ve gone through the process of assessing your own business and money needs and know the absolute minimum you will need to charge to make ends meat. The problem? In today’s economy, an hourly rate can seem a bit disarming. Imagine someone outside of the design industry (or whatever your industry is) calling a professional to help them solve a problem and asking the golden question, “How much will I be charged?” Then imagine your reaction if he or she responded, “Well, I charge $50 per hour.” It doesn’t really seem like an adequate response.

Many today are put off by the hourly rate because it feels a bit ambiguous. If they have not dealt with you in the past then certain concerns will come to mind: 1) Is this person going to drag his/her heels so that I’m charged out the wazoo? 2) What is a per hour rate? Why can’t they tell me exactly what it will cost? 3) This hourly rate seems really expensive. I think I’ll look elsewhere …

When I first started freelancing, I saw that the standard was an hourly rate. I calculated what I’d need to charge per hour and whenever I was approached to do work, I’d give out the hourly rate. What happened? I didn’t get much business and the business I did get wasn’t very profitable. In my opinion, hourly rates can cheat the freelancer out of well-earned money. It’s an easy way of telling your clients that you feel your work is only worth whatever your rate is or that you have no idea of the value of your work and self. Yes, everyone should have an hourly rate but not to give out – keep it as a guideline. You need to know how much you need to make to survive so when you’re approached to do a freelance job, simply divide that quoted amount or estimate by your hourly rate to figure out how many hours of work you’re agreeing to do. Is that sum the amount of hours you’d reasonably expect to put into the work? If you know it’ll take more hours than what you’re agreeing to, that’s when you negotiate with the client. If you know it’ll take fewer hours then hey, that’s when you’re making a real profit!

Charging based on Pre-established Prices
Take a stroll on Craigslist.com and stop by the art/media/design area of the job postings. Look through some of those ads and you’ll find what many people expect to pay you for your design services these days. Don’t gawk at the $10/$14 per hour expectation – often times this number comes from people just having no sense of what a real graphic design expert is. The economy we’re in today has sent our profession into a bit of a tumble. Back in the 1990s and early 2000s, people did not question the worth of a design. We were known for having the capabilities to do things that no one else could, thus, we were paid fairly. Nowadays as technology grows and takes over various areas of our lives, we’re faced with people thinking that graphic designers are nothing really special. Why pay someone tons of money when you’re little nephew is learning how to use Photoshop in his 6th grade computer class?

Get tough, become more confident, and know you’re worth. When I found that charging by an hourly rate wasn’t getting me anywhere, I sat down and made a list of all of the things I’m willing to design as a freelancer. This is the first key – like any business, figure out ahead of time what you’re services and offerings will be. You’re a freelancer and unless you work with a team of people, you can only do so much so stop trying to do it all. Figure out what you’re good at, what you can profit from and then go about figuring out what to charge for each of those things. Having spent a few years as an intern designing and a year in the real work force, I had a good idea how long it would take to complete certain tasks. This is when your hourly rate comes into play. Simply multiply your hourly rate by the number of hours you figure it will take you to complete a task and that’s the price to present to someone if they ask about your charges and prices.

This, of course, is not perfect: some design tasks will take longer than others. Your price is, overall, an estimate so be prepared to be off by an hour or two. You also want to make sure you aren’t setting your prices so high that you aren’t going to be taken seriously. For most of my clients, they seem wary of the overall total price I present to them for a project but I’m quick to follow up the quote with an outline of the project: I tell them how long I expect to the project to last, how I will communicate with them, the final file formats, discuss the style/expectations from them. Once you communicate and learn to back up your prices with a true sense of business, that total price won’t seem so daunting. Also, be prepared for some clients to walk away.  For some, they have it in their minds that graphic design, in this economy, is no more than a digital form of fast food. They want it done quickly, they want to be able to pick and choose who they work with and they want it done cheaply. They don’t understand that the services you’re offering them is of a great value and something that you spent time going to school for – just as they spent time earning (and paying for) a degree for whatever it is they’re trying to get you to help them promote and look good. If you encounter a client who wants to only pay you $50 for a logo that’ll promote their business for life, or $10 for a media kit that will in turn bring in ten times that amount of advertising and business, WALK. Don’t look back, don’t regret it.

Stay the Course
Forget what you hear – there’s money to be made in freelancing, even in today’s economy. With businesses cutting their full-time designers and creative departments, they are in search of temporary solutions and for those of us willing to moonlight and freelance, we’ll be the ones to profit. Freelancing is not a hobby – it’s a business. You’re setting out to make money, to build your brand and to create a base of clients that view you as a valuable asset and ally that they can come to, spend their money on, and will give them what they want. Know your worth – if you have no idea what to charge for your services, do some research and figure it out. Have a business plan in place and be tough when you’re approached to do freelance work.

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About Antoine

Antoine is a graphic designer and artist currently residing in North Carolina. He has a degree in Journalism and Mass Communication with a concentration in Visual Communication and specializes in graphic design and illustration. He has spent the past six years as a graphic artist for several publications based in North Carolina. He invites you to visit his design and social media blog at https://antoinereid.wordpress.com.
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