This question was sent in by Tom Nowell.
Tom said he was a university student and has been building websites for people lately. He says that he does it on his own time so it doesn't cost him anything, so he has no idea what to charge.
All of us have faced this problem before. It's a bit of an awkward situation. You are putting a price tag on yourself and it feels weird. Most of us are modest fellows (and gals) and tend to want to keep it cheap so we don't scare away the client. There is such a thing as "sticker shock" when clients look at an estimate for the first time and can easily walk away. So the trick is figuring out how badly you need the client and balancing it with how valuable you think you are. Eventually, you'll get to the point where you charge what you charge, take it or leave it, but most university students probably aren't quite there yet =)
Tom said it "doesn't cost him anything", and we all know what he means, but we should make very clear that is just not true. All that work you are doing costs you the most valuable thing you have: your time.
It is a little hard to talk hard numbers here since this will vary wildly from agency to agency, firm to firm, freelancer to freelancer. But let's just throw some out there just for fun. $75 / hour. That's a fair rate, I think, for a reasonably skillful freelance web designer.
Does that seem high to you? It might, since very few in-house designers make even half that. There are some important things to consider as to why the freelance rate is (and should be) so much higher.
- You aren't an employee. That means they aren't giving you health insurance, they don't need to buy you a computer, they don't have to train you, the list goes on... Employees are expensive. You are cheap in comparison.
- They need you. Even though employees are expensive, if they already had one that could do what they needed done, they would just have them do it. It might not be a skill issue, it could just be time.
- No long-term commitment. An in-house designer probably works 40-hour weeks. They have some degree of job security and steady paychecks. Those are valuable things that freelancers don't get.
- You're good! That's why they want you, right?
So let's say that $75 / hour is a BASE charge. There are things that could effect that price up or down.
- How big is the project? If it's a huge long term project, perhaps you could bring it down a bit.
- Is it for friend/family? Totally up to you, but most of us try to hook up our friends. You may have similar rules for non-profits and the like, but don't let altruism send you to the poorhouse.
- Are they a long-time client or a first-time client? Personally I don't think you should charge any different here, but it's worth considering. Do you go cheap to get a first time client? That would set a bad precedent for more work later. And going high might lose them in the first place. One thing you should definitely consider is charging some percentage of the estimate up front for first-time clients.
- Can you handle this project 100% on your own? Will you need to outsource? Are you a designer that may need to outsource some of the custom programming work? Are you a developer that is going to need to buy some design work to get started?
- To what degree can you recycle things you've already done? If you happen to know that this project is really similar to things you done in the past and you will be able to knock it out very quickly, you may want to pass those savings along =) Or, that could just be your reward for being so efficient.
- How fully are you going to commit to this? Tom is a University student, so he's not going to be available all day every day for his project. He's also learning as he goes (well, we all do that, but you know what I mean). If you can only commit a few hours on a Saturday to a freelance project, you probably shouldn't charge as much as you would if you could fully commit to it.
Another thing I want to pack in here is the concept of "charging by the project" instead of "charging by the hour". In my experience, clients love paying by the project, and designers hate it. Clients like knowing exactly what their bill is going to be, instead of the arbitrary nature of "hours". The problem is, you just never know exactly how a project is going to go when you start it. The client themselves might send you through rounds and rounds and rounds of changes and that "charge by the project" idea really starts to suck. In my experience, charging by the project works better for print work.
What do other people say?
Just for fun, I asked on Twitter: Do any of you freelancers have a hard hourly-rate, no matter what client?
Arjan Terol said:
Quick and dirty: $100 / (client type * job description) + time + pressure - freedom - fun factor =
Benjamin Sterling said:
I charge one hourly rate for all work, it helps keep me sane.
Alen Grakalic said:
No matter how hard I try to keep all of my clients at equal level, some are "more equal" than others, so is the hourly rate
Mike Susz said:
I don't vary my rate so much by client, but by type of work and turnaround time. rush job = +money, specialized work = +money.
Donna Donohue said:
Yes I do. No bumping up for big guys and for lil guys, well, I am in their ballpark.
Selene M Bowlby said:
Yes, $100/hr though I give a discount to close family/friends. I usually bill per project though (use hrly rate as basis)
Cerven Cotter said:
Yeah, I have a standard hourly rate, but most work is quoted per project.
(Thanks for all the responses. There were more than printed here, I just kinda picked and chose a few.)
It's all a lot to think about, but above all, just remember that you skill and time ARE worth money and you should charge appropriately. You're own enthusiasm and quality of work will suffer if you don't.