I recently made the decision to go full-time freelance. While that decision was a big one on it’s own, it came with many other decisions that had to made. One of those was figuring out how to make a sustainable living, which leads to how I priced my services. I know this is a big deal for many other people, so I thought I would openly share how I figured out my rates and how I charge clients for the work I do.
Pricing is somewhat of a hot drama topic in web design and development. There is no method of standardization to fall back on and this causes frustration for both designers and clients alike. I’m not trying to solve that in this post, but rather provide some transparency in the way I approached it.
I Created an Inventory of Skills
I knew from my experience running a small agency that clients can and will ask you to do a lot more than what you were hired to do. I often started out as the web designer on a project and ended up being the photographer, copywriter and developer as well.
Although I love doing all of those things and am capable of doing them and more, I often found myself overworked and underpriced for the work I was doing.
Services are different than products, but you’d never catch Apple without an inventory of all the things it sells. The same is true for providing services as well. Now I have a single page of the core services I provide and offer them for any new project request.
I Compared Myself to Others
I hate hate HATE the idea of comparing your work to other people, but it makes sense here. It’s less about self esteem and more about being honest about where you fit in the market.
If you’re interested in freelance web design, then I bet you’re also reading lots of blogs and following rock star designers on Twitter. I do for sure, and that’s how I know where to set the bar for excellence. You’ve probably also seen some pretty horrific sites that were designed and built by self proclaimed “web gurus” and “online ninjas” as well. Well, that’s the bar for mediocrity.
Based on those two extremes, I was able to place myself somewhere north of middle, but not too high for the sun to melt my wax wings. This was honestly the most difficult exercise for me because I have a tendency to downplay my skills and had to intentionally push those feelings aside and make an honest assessment.
I Priced the Market
I have had the luxury of hiring some pretty rock star freelance designers and developers in my previous jobs, so I already had a good idea of what awesome work is and how much it costs. Gauging bad work isn’t rocket science, either. A simple Google search for “long beach web design” gave me all the examples I needed, plus rates.
That gave me a high and low end for pricing my services. I was able to use this information to price my rate where I feel it is both true to my skills and competitive for the area I live in, while allowing me earn a sustainable living. For the sake of transparency, that was $80. I’ve seen others priced as high as $150 and others as low as $25. I think mine fits right and I’m not ashamed of it.
Now, I should be clear here that I am purely pricing an hourly rate here. There are plenty of other ways to price your services, but I am using an hourly rate because it makes sense for someone who is starting out solo for the first time and it will help estimate the cost of flat-rate projects by calculating the required effort. In other words, I am using it as a unit of measurement but not necessarily as a method for billing.
I Bulk Discount Like Costco
This is where pricing got complicated for me. Some clients wants to keep me on retainer. Others want to hire me for a single project. And others just want me when they want me.
That’s why having a base rate is so great for me. It gives me the exact rate for those last-minute requests while giving me a flexible baseline for quoting retainers and one-off projects.
In general, I charge my full hourly rate for quick requests that only take me up to a few hours to finish. I make sure my client knows I’m charging an hourly rate up front and I give a ceiling for how long it should take.
For retainers and larger projects, I provide a flat quote for the entire contract and discount my hourly rate by 25 percent since the clients are purchasing my time in bulk and guaranteeing those hours. And if they go over? We go back to the full hourly rate for the overage.
Be consistent to a fault
When was the last time you were asked by an uncle or bestie to build them a website and give you the “friends and family” discount? It probably happens a lot.
I don’t have a real policy on this, but there are some assignments I take as “passion projects” which simply means I do it either free or very cheap. I will either cut my rate in half or just not charge at all because the project is near and dear to my heart. Personally, I think it’s healthy to work on these types of projects because it’s an excellent way to give back to the community. For example, I love the Pittsburg Food Bank project Brad Frost took pro bono.
I’ve learned that it is extremely important to be rigidly consistent in the way I price and quote projects. I would suggest never quoting a project based on the size or type of client it is but focusing instead on the required effort it takes. The more I stay true to my pricing, the less frustrated my clients are and the easier it is to track my costs, expenses and billing. Can you imagine the admin effort required to track unique rates for every client? Ouch.
Extra things I considered
OK, so pricing your freelance services is easy, right? Um, no. The reason I’m writing this post is share the process I chose and hopefully help others who might struggle as much as I did. There is no easy recipe for determining a rate that tastes good for everyone, no matter how many blog posts out there claim to have the secret sauce.
So far, the path I chose works for me. If it fails and I change it up? Well, you’ll probably read about it here.
Here are a few extra things to consider that I thought about when nailing down my rate:
- Do you have startup costs? How much are they and how long will it take to recoup them? CSS Tricks has a good summary on the average costs of being a freelance web developer.
- Do you want benefits? Most of us choose freelance for the independence but sacrifice the security of benefits that come with a traditional job. If you want benefits like retirement, vacation and health coverage, you need to get them yourself and have to consider those in your pricing.
- Do you have a solid contract? A good contract will be super transparent when it comes to your pricing and how you arrive at a quote. It will also specify what happens if you need to charge more than the quoted amount. I use a modified version of the Contract Killer template.
- Try using calculators. The fine folks over at Sumo have put together an online calculator you can either fill out or use as the basis for setting up your own spreadsheet of things to consider when calculating an hourly rate.
Have other thoughts, suggestions or ideas? Go ahead and share them in the comments.