Freelance Friday: Quoting

on Misc  

Pricing is one of those things which is a little scary to talk about. Am I charging too much? Too little? I’ve been told both in the past and still get told this, even though I’m pretty happy with the way I quote for things these days. This won’t work for everyone, but here’s how I do it.

1. Decide on an hourly rate

I think I’d prefer not to publish my hourly rate here, especially as I work fast and quote by project, as described below. But basically it has to be something which you’re comfortable with charging and which is going to cover your costs. The rate calculator on FreelanceSwitch is pretty helpful, if a bit in depth. You should definitely be charging more than what you would be getting paid in a full-time position, as there’s a number of expenses (office rent, software, computer gear, time spent marketing etc) that you wouldn’t otherwise have to cover, as well as the complete lack of security.

It can take a while to feel out the right rate as well as the right clients for you – don’t be disheartened if you get a couple of potential clients disappear once they get their quote, as long as you have some work. If you have people commenting that your rates are very low or clients insisting that you quote more, then maybe it’s time to raise the rates.

2. Break the project down into tasks

How granular you go is up to you I suppose – the point is to get it to a point that you can accurately estimate the time it will take you to complete each task. Most of my jobs are website design and development ones, so my task list generally looks like this:

  • Homepage design, with up to 2 rounds of revisions
  • Secondary page design
  • Installation of WordPress and basic plugins
  • Development of approved design
  • Add-ons (blog, gallery, illustration, any dynamic features)
  • Training for the client, if necessary

3. Estimate the time required for each of the tasks

This takes a while to get the hang of, and even then some projects still surprise me. It helps to keep records of the time it takes to projects, broken down into tasks as above, for all projects – it’s a lot easier to see if you’re coming in under the time budget or not.

Some things are straightforward enough that I can predict pretty accurately how long it will take (installing WordPress, or coding simple templates). Other things, like design, can easily get really time-consuming. I usually try to estimate towards the longer end of what I think it will take me, as sometimes you need that extra time to give the client what they want and really get a design right. If the client has a very specific look in mind that cuts down the time needed considerably, since I can usually get the design right in an initial concept with some tweaking after feedback, so I charge much less for these. Asking the right questions or getting a detailed quote helps immensely with this.

Quoting for things I haven’t done before, but can figure out (like a lot of the jQuery stuff which is becoming so popular) is pretty tricky, and usually I end up losing out on those. On the plus side, the next time I have to do the same thing I know exactly what to do.

4. Multiply time estimates by the hourly rate

Pretty straightforward! If any of the figures look a bit out of whack, I double check that my time estimates look right.

5. Adjust as necessary

This is also a bit tricky to get the hang of, and I can’t say I’ve mastered it. After a while I’ve gotten fairly fast at what I do, so sometimes the amount I come up with from my hourly rate multiplied by my estimate of how long it will take me looks a bit low. At that point you also have to look at what it’s worth to the client, and how your estimate compares to others in the industry. Other factors to consider are whether you’re including the rights to what you’ve created (such as design work, templates or logos for example) which are worth more than just the time you spend on them, how desirable the work is, how busy you are, whether the client is picky or laid back, how soon the deadline is. It might not sound ‘fair’, but remember that there’s always going to be someone charging more than you – I can guarantee that design agencies pitching for big name clients aren’t just quoting $100 for a logo, no matter how little time it takes them. The quality of work is what makes it worth more than the time it took them to create it.

It’s also worth considering what the client expects to pay – certain types will go for what they consider a mid-range option over bargain-basement. Others will say upfront that they have a limited budget, and you have to decide if you’re able to work within that or not.

5. Put it into a formal quote

I use Billings for quoting and invoicing these days (more on that in another post), but I used to just use a Word template to put together quotes. I keep the quote itemised into tasks (grouped if they got too granular in the process) so that the client can see how much they’re spending on each aspect of the project. I put down the final cost estimate for each task, without the hours estimate. People seem to react badly to hearing a freelancer’s preferred hourly rate, because they compare it to what they earn per hour – usually in their secure, full-time-with-paid-leave jobs, which are completely different. Fixed prices always seem to get a better response.

A few extra notes

  • When putting down the tasks in a fixed quote, it’s a good idea to be fairly specific – that way if the client requests extra things during the process, an additional quote can be made for the extra work. If it’s unclear to begin with you can end up doing extra work beyond what you thought was the original scope without getting paid for it.
  • Some projects can be a bit hard to estimate accurately, so I end up giving a rough estimate of time along with an hourly rate to the client instead of a fixed quote. I try to stick with fixed quotes where I can though.
  • I usually try to also let the client know that I require a 50% deposit upfront when sending the quote, so they have all the information they need to decide whether to work with me or not. I suppose I’ll write more about invoicing in another post.
  • People who have no idea about your work might be severely misinformed about what you should be charging, so try not to take their comments to heart. I have a feeling a lot of my friends still think a complete website is worth just a couple hundred dollars (it is not!).
  • On the other hand, if your quotes are all unsuccessful it’s time to look at whether you’re charging correctly for your services and skill level, or whether you’re just pitching to the wrong sort of client.

Happy quoting!

I’m going to try and write a weekly post each Friday about what it’s like to be a freelancer! This is something that I find a lot of people are curious about, and there’s a lot of incorrect assumptions out there. If you have any questions for me on freelancing, leave a comment here or on Formspring.

One note

  1. Ahhh quoting. It took me a good few years to work out a formula that I am happy with. I developed a rate card which works well. I send it off to new clients so they get an idea of my rates for basic projects. Then, if they want something a little different, I just tweak it.

    Great post!

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