Show me the money!

After you have met with the client, and you have gathered information, it’s back to work and figure out how much the job will be. Unfortunately, there is no secret formula for knowing how much to charge for your work. Over time, you get experience from having to do it over and over again. And before you know it, you have a general idea of how much to charge a client.

Since this is your first gig, you may estimate a bit low, and some maybe a little too high. Eventually, you’ll figure it out, and find the sweet spot. Not all jobs will cost the same. If you ask a dozen designers or developers and what they charge, you will get several different answers. At least, you would get a ballpark figure in what to charge.

You get what you pay for!

A client can get estimates from several resources. They can meet with other freelancers or agencies. But, that would be time-consuming too. Time is money! So, how much should one charge? A former colleague once asked me to help them design a logo for their restaurant. There was an angle, and they mentioned if I designed their logo, I could also create the website too. Since I have done a few, I gave them an estimate on both fronts. They thought it was too much. The client mentioned that they could go through Fiverr and get it cheaper. The old saying is, ‘You get what you pay for.” I can’t compete with designers who charge almost next to nothing. But, I can compete with the quality of work, value, and fit.

What is the value?

You should, be charging clients based on what that work is worth to them, not the time it takes you to complete it. A good example is if you have been asked to design a simple five-page website — an informational site about the business on their services, the team, and contact information. You have never build a site before, and you figure that it might take you 10,000 hours to complete at a rate of $100 an hour. That would mean, the estimate would be a cool million (10,000 hours x $100 an hour). I don’t recommend you to charge the client for the time it takes you to learn a particular tool or code. So, again, you charge clients based on what that work is worth to them, not the time it takes you to complete it.

What is your billing rate?

Bill rate is the amount per hour of work before taxes, fees, and discounts. There isn’t a magic number that I can say that all new designers or developers charge per hour. Know the value of your time. The value of that work is what you need to charge them for.

Some formulas help you what to charge by looking at how much you need to make. It will help you add up your expenses, utilities, supplies, and then add a markup to that based on how much profit you want. It’s a helpful guide. There are many online tools too.

Putting the estimate together

Double-check everything before presenting the estimate. You will know you charged too little if the client agrees right away. There’s nothing quite like it when a client lights up, eyes squinting when they see your estimate, and race to sign on the dotted line before you realize you made a mistake. It happened to me recently. On a recent job, I enter the wrong number on my estimate. The client signed it, and when I received my deposit, I had to check to see why it was so low. Then I realized I made a mistake. Could I have gone back to the client and say, “Hey, I made a typo on the estimate, can you pay me more?” No, I wouldn’t. I made a mistake, and I paid the piper. Lesson learn. Don’t do it again! And yes, it stunk!

Negotiation on Estimates?

Yes, an estimate could be negotiated if you choose too. Don’t charge so much that you don’t get the job (pricing too high). You want a client to feel like your time and expertise are valuable, that you’re right for the job, and that it may take a little work on everybody’s part to make this happen. Clients want to get the most work from you for the least amount of money. If a client intends to negotiate to lower the price, then you need to go over the items on the list of what is being covered and cut it out. Explain to them why and what will happen without it. Yes, you will have some clients who will try to low-ball your estimate. And if you can’t say no to them, they will take full advantage of you in the end.

*Note: There may be times where you meet a client, and they give you bad vibes. It happens. Never leave the meeting mid-way. Unprofessional. Can you tell a client that you don’t want to work with them? You could, but they may ask you if they know someone else who can handle the project. If you got a bad vibe or maybe the client is plain creepy, and you wouldn’t want any of your friends working with that client, one way is pricing the job higher than usual.

I did this once to a client. I gave the client a shade higher than what I usually charge. The client thought I was too expensive. He asked if I can lower the price. I said I couldn’t. The client asked if I could refer him to someone else. I did. The client came back and said the referral was higher than mine and decided he wanted me. I told the client I wasn’t able to schedule him into my schedule at the time as I just signed another contract, and he had to wait a year. I was so glad I didn’t work on it. In the end, the client went with a different freelancer that I did not know, and the work shown says it all.