That thought occurred to me this week as...
- a discussion on Linked In's LinkEds & Writers group posed the question "how much should I charge for editing web sites?"
- an article on Freelance-Zone dug into how the time-value of money affects freelancers, and
- I picked up a copy of Chris Anderson's Free: The Future of a Radical Price.
For any business, pricing your product or service properly is absolutely critical to survival, let alone profitability. Your spreadsheet includes not just the hard costs and time to execute the project, but the overhead costs--everything from the furniture, office supplies and utilities to healthcare and insurance.
My experience is that creatives in general (and freelancers in particular) tend to shoot too low--whether it's due to lack of experience, poor business sense, or simply undercharging for doing something they enjoy. Obviously, it's difficult to always put a monetary figure on something you've produced through nothing other than the gray matter between your ears. But one thing is for certain: If you fail to price your skills right, your clients will surely fail to value them properly.
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Jake,
ReplyDeleteThis is very useful information. Thanks!
Jake, can you or one of your readers name your favorite sources that can help me determine my hourly rate? Some of the ranges posted on the web are so wide I feel like I'm pulling numbers out of thin air.
ReplyDeleteThanks for the link Jake, glad you liked the article :) As far as setting rates, the best thing to do is to determine what you need to live on based on the billable hours you want to work in a week (remember that marketing hours are not billable but are damn important). You have to consider your budgetary needs, your taxes, your vacation time, your retirement plan, your savings and your sick time. Once you've developed the hourly and translated that into a per word cost, it's time to compare with other freelancers and make sure it's feasible. You can find the rate setting process a little more clearly written in Jennifer Mattern's book (found on http://www.allfreelancewriting.com). As far as comparing rates, you can Google search, use the Writer's Market and access other freelance writing average rate sources online.
ReplyDeleteHow right you are! I'm quite sure I've left a lot of money on the table over the years. In our little part of the world, we charge the most of any of the other "agencies"...and of course we think we're worth it. And I tell prospective clients up front we are. It's hard to price an intangible set of skills. But we're paying the bills, are debt free, and enjoying what we do. What I really need is a good BUSINESS person I can trust.
ReplyDeleteYolander, thanks for pitching in those ideas and the additional items that go into your pricing methodology. Nice to have a financial mind's insight onto these things!
ReplyDeleteadchick, I think your point is an excellent one, which is the importance of being upfront about it. If you're evasive about pricing, it will eventually do you more harm than good.
No problem Jake :)
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