Pay Me Please: A Freelance Web Designer's Guide to Billing and Pricing
Going it alone as a web designer will quickly lead to the discovery that your accounting skills are as important as your design skills. If you've ever done any freelancing you know exactly what I mean. When should I bill? How much should I charge? What kind of pricing structure should I use? These are questions I've wrestled with more than once over my eight year tenure as a freelance web designer. But fortunately, out of the heap of triumphs and failures, a refined set of principles has emerged. I'm sure these rules will keep you out of some sticky situations.
How Much Should I Charge?
The first rule of pricing is never undercharge. Undercharging opens the gateway to Web Design Hades. It's a horrible place filled with cheap clients who won't pay and long tedious projects that don't make any sense. It may sound strange, but charging as much, or more, than your competitors will keep the bad clients away and the good clients coming back. If you can't book projects at the going rate, then you need to sharpen your design skills and try again.
When Should I Bill?
You've probably heard the saying "vote early, vote often"—it applies to billing too. This is one of the first difficult lessons I learned. Now, I bill half up front and half on completion for projects that take less than two months. For projects that take longer, I break up the second half into two or three invoices. If you decide to make this rule a policy—and I highly recommend you do—just remember that it's only effective if you hold off on starting the project until you get the first payment. Don't get sucked into the web of client manipulation. If they want a project started now, they can write a check now. The only exception you should make is for long-time trusted clients.
How Much is Your Time Worth?
Freelancers spend an inordinate amount of time fretting over how much to charge. But there is no right or wrong answer when it comes to pricing. It’s all completely subjective and dependent on a wide variety of factors, including what the market will bear, geographic location, timing, aggravation factor (or lack thereof) and your level of desperation (hopefully low to non-existent), just to name a few.
If you are selling creative services, one of the things that can get in the way of clear pricing is the belief that what you charge is related to your value as a person. Wrong! It has nothing to do with you.
For example, a client will often ask, “How much do you charge for a web site?” or “How much do you charge for a brochure?” They ask these questions as if they are buying shoes or tomatoes.
In fact, if you were selling shoes and a customer asked, “How much do you charge for these shoes?” you wouldn’t say, “I charge $100 for these shoes.” You would say, “These shoes cost $100.”
It’s the same with freelance or creative services. It has nothing to do with what “you charge.” It’s not about you, and it never will be. You must shift your mindset to think instead about what the product and the process costs. So when someone says, “How much do you charge for a web site?” take the “you” out of it and respond with, “A web site can cost $X.”
Clear pricing is based on a clear idea of what you are really selling. Many freelancers believe that what they are selling – and what clients are buying – is time. As a result, you price by the hour.
Sources and Contributors:
- Pay Me Please: A Freelance Web Designer's Guide to Billing and Pricing by Matthew Griffin http://bitsonewmedia.com/permalink/pay_me_please
- How Much is Your Time Worth? by llise Benun http://freelanceswitch.com/money/how-much-is-your-time-worth/