Every freelancer’s favorite question…

Jory MacKay
Apr 13, 2016 · 4 min read

Ask any freelance designer or developer what question strikes fear into their hearts, and you’ll probably hear some variation of:

Once the conversation has moved away from the courting stage and you’re ready to commit to something serious, all of a sudden all those things you have in common don’t really matter.

All of a sudden, the only thing that matters is value.

But as freelancers and independent creatives, it’s often hard to sum up all of the work we do into a nice, tidy by-the-hour rate. Especially one that our clients will agree with without objection.

And beyond that, the more experienced you get, and the faster you get with your craft, the less your value is tied to time. And there’s no reason to get punished for doing a job well done in good time.

So, what’s the alternative?

As freelance guru Paul Jarvis explains:

Getting rid of the hourly wage

Let’s quickly look at two scenarios:

  1. You quote a client $1000 to design a logo
  2. You quote a client $1000 to design a logo that will take you an hour to do

In both cases, the work is being done for an acceptable rate, but how many clients have you dealt with who wouldn’t balk at paying $1000/hour (if you do know some like this, please, please, send them my way!)

But if your skills and expertise allow you to finish that project in one hour, why should you be punished for that?

The client receives the same benefits in both scenarios, but the first connects the price with the value of the result, while the second associates the price with the time it takes to build.

Linking cost with time turns you into a commodity.

How to get started charging by value

Going back to my man Paul Jarvis, here’s his breakdown of how to implement these ideas and start charging by value:

1. Break each task down into a separate line item with individual deliverables (i.e. what the client will receive, such as a newsletter design)

For my projects (designing websites and coding them into custom themes) I break pricing down into: Strategy, branding, interface design, and programming.

I also always include some optional pieces that other clients typically wanted, like newsletter design and template creation, social media profile design, newsletter automation and onboarding strategy, and/or marketing/sales content creation. These become negotiation points, since I don’t discount, but I can take off optional pieces if the client can’t afford the entire job.

2. Create a price for each deliverable (newsletter design, $500)

While the client only ever sees the price for each deliverable, internally I know how long each will take to complete (on average, based on previous projects). I base my pricing on a formula that’s worked for me for 10+ years. If I’m booked for more than three months in advance, for more than three months in a row, without a rate increase during the last six months, I raise my rates by 15–20%.

I’ve raised my rates 700% since I started making websites for clients in the 90s based on the above formula (but then again, I was charging far too little back then).

3. Since all projects require timelines, attach a timeframe to each deliverable

Don’t indicate how long the project will take to complete, but rather when you’ll be able to deliver it to the client (newsletter design, $500, 2 weeks).

I base my timelines on the average of previous projects and at least triple it. So, if I know a newsletter design will take me 3 days of solid work, I quote 9 days. I do this because something always comes up to delay work. Either from life or other projects, I’ve learned the hard way that unless you pad your schedules for deliverables you’ll always be late (which is the worst thing that can happen for a freelancer if they want their client to be happy).

If I get the work done early, instead of sending it right away, I sit on it so I can work on other projects. The client gets it when I said I would deliver it, and sometimes a tiny bit early — to over-deliver and under-promise.

Pricing is not a simple task.

You’re not only being hired for the billable hours of completing deliverables, you’re also being tasked with solving problems.

Your price also takes into account the years you’ve spent learning your craft (either at school or through work) and the years you’ve spent working with previous clients and learning through those projects.

Remember: Your price is not just for the task at hand but for all that you bring to the table.

To minimize the risks, and to increase your expert status, make sure you always communicate the value of your work. Demonstrate how the end result will benefit your client. Separate cost from time and focus on the final price of each deliverable.

Your client wants results and an end product, so relate what you suggest creating for them to that above all else.

Want an idea of what your next website might cost?

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Jory MacKay

Written by

Award-winning freelance writer and editor. Lover of film. Drinker of coffee. Say 👋 jorymackay.com

The Startup

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