This is a tough question that all freelancers must answer at some point.
Should I charge per hour? Or should I charge a flat fee per project?
If I do charge, how much do I charge for my services? What’s a good starting point?
Well, let’s jump right into it:
How much should I charge when I first start out?:
That’s an excellent question that I’m getting better at answering everyday, but I still struggle with it (part of the fact is that I offer new services).
When I first started, I struggled with pricing my services.
I started at $15/hr doing random oDesk projects while I was still in school. In hindsight, that was a terrible mistake. The jobs were neither long-term nor consistent. I spent more time looking for work than actually doing it. When the project was completed, I was actually making way less than $15/hr if I included all that time finding work.
On the contrary, it gave me some low-risk projects to work on that helped develop my design, management and customer service skills.
So how much should you be charging as a freelancer that’s starting out? I would say at least $25/hr.
Should I charge by hour or by project?
This is a definitely tough question to answer, as some clients are better off with hourly and some are better off with project based pricing.
For example, I have a client that gives me small and random graphic and web design projects weekly. They usually don’t take more than 2-3 hours a week, so I charge her by hour.
On other cases, some clients asks for a 8-10 page website. I consider all the factors and charge them by the project.
However, I’m moving away from hourly and going towards project base (even for the small ones). Here are 3 reasons why:
1) Some projects that I can do in an hour, other ordinary people will do in 4 hours.
2) The better I get at design, the less time it takes for me to do it. This means that I’m making less for better and more efficient at what I do.
3) Charging by project makes much more sense because it goes by what it’s worth for the clients, and puts the importance on the project, not on how much I charge.
Point number 3 is the most important here. Because we get to charge based on VALUE.
Let’s say I got a Real Estate client that wants a new website done because their current one isn’t generating enough customers for them. If they get one client, their typical commission is roughly $10,000.
Imagine that I decided to charge by the hour $50/hr (which may scare a lot of clients away). In the end, I spend 30 hours to finish the project. That comes out to be a $1500 project.
Now imagine that I decided to charge by the project. I can quote the Real Estate Client a $5000 website, and give him the same product as the one that goes by hourly.
What’s the difference? Yes, the price. But we’re talking about what it’s worth for the client. If the website redesign helps the real estate agent get one NEW client, it pays for the website and gets her $5000.
I get paid more, and the client is still happy.
Of course there are a lot more variables involved, but that’s one of the biggest reasons why. And this example is not a true story but just an example to explain the point.
So should go by hourly or project based pricing? I would recommend going by project based pricing.
This is a bit of a throw-back from my previous blog but I think it’s worth republishing.
In early October, I wrote a post about my efforts to fight the fear of public speaking. Since then, I have taken a series of workshop to help me overcome it. The class ended two weeks ago, and I decided to hold my urge to quickly write a blog post. Perhaps it’s better to wait to see if the workshop had any last effects on me, I thought.
Well, things have changed. Do I still get nervous? Of course, I don’t think just taking workshops will solve that problem. In fact, Howard Schultz, CEO of Starbucks, was nervous when he had to explain his company’s disturbing performance to investors during the 2008 economic crisis. A man of his stature, experience and charisma had butterflies in his stomach. Even Taylor Swift was nervous before her concerts. Unbelievable right?
Even though I still get nervous, I am far more confident then I was before. Cameras and large groups don’t bug me like they used to. If I have a core message and a good story to tell, there’s nothing holding me back from speaking in public. As long as I focus on providing value to you, the audience, I will succeed. If I think about my own ego, and how to prevent it from getting hurt, my message, story and character will not come through.
So what happens from here? For anything, it takes time to get better. I need to practice whenever a speaking opportunity knocks on the door; it can be in front of a camera or a group of people. I have all the tips and techniques from the workshop to help with this process, so I shouldn’t waste what I’ve learned.
Overcoming my fear of public speaking has changed my life. I feel like I can achieve anything that I am determined to. Acknowledging and fighting one of my greatest fears is proof of this. To end, I want you to read a quote from Lucas Mattiello, my workshop instructor:
“Failure is having a goal and allowing the fear to prevent the first step”
If you’re a new or veteran freelancer, you might find it hard to narrow down your niche.
Even as I am writing this right now, I still find it hard.
I learned from Marketing Master Eben Pagan, or perhaps better known as David DeAngelo, that narrowing down to your niche makes you distinguishable. It’s counter-intuitive to narrow down because we’re afraid of losing out on sales.
The “I do everything” approach is more like “I am okay at everything and good at nothing” to many people including the customers you really like working with.
For the past few months, I’ve been struggling to narrow my focus.
“I do web design and social media,” I would say.
And so does everyone else. This was not relevant to anyone, and there wasn’t a distinguishable factor that made me stand out from the crowd.
But, if I say, “I do Facebook Marketing for Sports Retail Stores,” wouldn’t that make me stand out?
When someone is looking for someone that does Facebook Marketing for their sports business, people recognize me as the go-to expert for that type of work. I’m not just a social media guy.
Because I have a specialty.
And it’s easier to get referrals for that type of business because people can place a need to a name/face.
How far are you down in narrowing your niche?
If you need help, ask yourself these questions below (I suggest writing them down on a piece of paper). These questions are from Sue Clement’s book, Insider Secrets to Referral Success, www.sueclement.com. I’m half way through reading it and it’s helping me with my business. I highly recommend it if you’re having trouble developing your niche, message and network.
1. What types of customers do you most enjoy working with?
Do you notice any trends when you’re thinking about your customers? I really enjoy working with customers that are organized, that value my knowledge and suggestions, are prompt and let me take charge of the project.
2. What types of customers are most profitable for you to service?
Now you have to think about what industry you service. Just because you like working with them doesn’t make them more profitable for you.
3. What types of customers are easiest to service?
Distinguish between the clients that are easy to work with and the ones that make your blood boil. Notice any trends?
4. What types of customers are you most successful in servicing?
Who do you do your best work with?
5. What unique skills, industry experience or expertise do you have that aligns with your customers?
This is what defines your niche. Your niche might be your background expertise in food, electronics etc. Your niche may come from your values. Knowing this helps you connect with the right type of clients.
So, what do you think? Did that help?
I learned a really powerful lesson today.
I’ve made one crucial mistake. And that’s starting to design before the message or story has been crafted. Because words are the most powerful in web.
A simple HTML page with words can evoke emotion and engage.
Just words. No design.
This blog is simple. There’s no fancy design. Just words that I write.
If you’re interested in what I have to say, you keep reading. If not, you don’t.
It’s best demonstrated here.
I wish I had thought of this first.
This will make freelance designers have something to think about for the next little while.
We’re always waiting for the one big client. Or better yet, we’re waiting to win the lottery.
“That’s when I’ll know that I am really successful,” you might think.
Well, it certainly does define success to a certain extent, but by focusing on the big victory, you might just be focusing on things that don’t actually make you successful.
I used to wonder about that one big client I’d land, then I’d be rich and I could go on a nice vacation. But, we always wonder why it just doesn’t happen.
You see, it’s counter-intuitive to focus on your small victories. We’ve been taught growing up to chase the big dream, that trophy of success from a soccer tournament, to the point where we forget about the little things that actually make us successful human beings.
We often forget about the work we put into it, the friendships we’ve developed and the person we’ve become.
But once your paradigm shifts and you begin to appreciate your small wins, you start to become more and more successful.
It’s the same in networking.
Some of us hope to immediately build a relationship with a super influential person, get lots of clients and make lots of money.
Sorry, that won’t happen.
Last time I wrote about how networking isn’t always about money.
I discussed how doing Pro Bono work can actually help you build real business friendships.
And what do friends do? They introduce you to professionals in their circle, and your network grows exponentially.
And why is this important?
Well, when you first started off going to meetups, networking events or workshops, it must have been fairly awkward.
We all know that phone texting routine when that happens. You check your phone and make yourself look busy.
“I’m just texting a friend, that’s why I’m not talking to anyone. I’m occupied.”
But we all know that deep down inside, we just didn’t know who to talk to and what to talk about.
However, at some point, you will establish a rapport with someone. (Great! Celebrate that small win!).
Let’s call that someone Bob. In the meetup scene, people know him, but he’s not that influential.
You and Bob will eventually start trusting each other. He’ll introduce you to people he knows, and guess what!
One of those people will be slightly more influential than Bob is. (Another small win to celebrate). And that person will know someone even more influential. The cycle repeats, and eventually you will get to know some really influential people in your area.
With a repeat of small wins (slowly meeting more and more influential people), you will meet a highly influential person that’s interested in what you do (big victory).
This will take time.
But, when you start to associate yourself with these influential people, your credibility sky rockets. People want to get to know you just because of that association, and they will be more interested in your business because of it.
You might be thinking why this is the photograph for this post. I’ll explain later.
Networking is not all about finding clients and making money.
Have you seen those few people that go around handing out business cards to everyone? I’m sure you’ve seen people do that. I shake my head when I see people who don’t care enough to make genuine connections with others.
As you may already know, networking is about building relationships.
Well, duh Ken, that’s obvious!
Hold on, let me explain.
Over the last 1.5 years, I have attended many different workshops, meetups and seminars. I met a lot of different people.
Some people eventually became friends, some eventually became business partners, and some people eventually became clients.
But the important point I want to discuss in networking is friendship.
There will be people who want your help, but can’t pay for it.
They are not asking for a lot, but it’s something you typically charge for.
You might be thinking that it’s a waste of time. Well, that depends on how you look at it, especially when you’re starting out as a freelancer (I’m not asking you to take on free work all the time).
Sometimes you must take on Pro Bono work to build a solid relationship. When you spend a few extra hours of your week voluntarily helping someone, you establish rapport with that person.
That person becomes your raving supporter.
And what do raving supporters do? They talk about you. They promote you. They support you. And they refer you to their network of people.
When your raving supporter introduces you to another person. You’re not starting from scratch.
In fact, that person trusts you a little more based on that introduction.
That’s the value of networking. Sometimes, it’s not always about the money.
Oh, right. I promised that I would talk about the image above.
I met Ricky Shetty a few months ago at a meetup (he’s a blogger at www.daddyblogger.ca. We talked, and eventually I helped him design his new book’s cover (for free), called “Wisdom From Daddies”.
It just became a #1 Amazon Best Seller. My name is on the back cover and on the first few pages of the book.
Ricky also promoted me at meetups and online using social media. He has a large network and is well-known in the business meetup community. He supports my work and is now teaching me how to blog.
I believe this is effective networking. What do you think?
It’s important to appreciate the moments where I’m uncomfortable, because that’s where I begin to live.
Yesterday was the first time I rode on a scooter. I always believed that scooters–even bikes were dangerous.
They are in fact, dangerous. But, that’s what made it so much fun.
When I first propped myself on my scooter, I was nervous. I didn’t know what to expect.
But, eventually I had to drive it. In the back alley, I went down the hill, did a u-turn and drove back up.
Wow, I thought, that wasn’t that bad at all.
We went around the blocks a couple of times and here’s the fun part.
Imagine yourself going 60km/hr in your car.
When I was going 30km/hr on my scooter, it felt exactly like what you just imagined.
Once we took it to the main roads, it became fun. It became exhilarating.
The day flew by–those 8 hours on the scooter felt only like two and a half.
Would I be having this much fun if I didn’t push my comfort zone? Probably. Probably not.
But I think my life’s significant breakthroughs all came from being uncomfortable. My freelance business, public speaking, and overcoming my childhood anxiety all came from pushing my limits.
It was completely uncomfortable. But it’s comfortable now.