mikestrange.blog

Thoughts on where we are now, and where we're going

Freelancers - heres how you can charge what your really worth

As freelancers and solo-businesses we often struggle with the pricing conversation. We feel awkward, like we’re somehow doing our customer a disservice by charging enough money to make our own businesses work.

I’ve made this mistake so many times it’s embarrassing — hitting my bottom line with a double whammy of wrong thinking.

The process begins

I would look at their job and then work out how many hours I thought it would take to do it well and then multiply that by the arbitrary “hourly rate” I had set myself.

Next up - self-sabotage

Then I would look at it, and say to myself, “ahh - that looks a bit expensive… they might not go for that…” and start trimming the price to something that felt more comfortable.

I wasn’t going to actually reduce the quality of work, or the time spent doing it, I was basically just reducing the amount I would be paid for my efforts.

This was stupid.

It’s not as if the client had even asked me to reduce the prices. I was basically haggling myself down.

Then I would present it to the client. As all clients feel that they have to haggle, they would often then ask me to reduce prices a bit.

I thought this meant that my prices were still too high, so would dutifully trim a bit more off my already depleted invoice.

Then end result: I was frequently overworked, and frequently underpaid.

I know from the many people I’ve spoken to about this that I’m not alone.

So what changed?

I got asked to do a project I really didn’t want very much.

I had worked on several successful projects for a client, but I found them really difficult to deal with. The thought of embarking on a bigger, more complex project didn’t inspire me at all.

As it turned out though, not wanting the job freed up my thinking and ended up changing the way I’ve done things ever since.

I started the same way - I worked out roughly how I would approach the project and because I wasn’t scared of pricing too highly, I went all out. Everything would be done as well as I possibly could.

Because the client had a tendency to be difficult, I also allowed plenty for revisions, changes to scope, etc.

I then looked at it all, and basically decided how much I would want to make to tackle all that. I had a rough idea about how long it would take, but rather than itemising everything, I came up with a figure that was high enough to make me feel a little uncomfortable. (It also made me a little excited about the tiny chance that they would go for it.)

I sent it over saying:

“I’ve gone into it in detail and figured out what I think it would take to do it properly. The charge for me to take care of it for you is £____.”

As expected, they came back with a response saying that that was a bit higher than they had anticipated, could I send a breakdown.

Normally, I would have done so, but to be honest, I hadn’t worked one out in detail. I still didn’t really think I’d get the job so instead I responded with:

“The project is doesn’t break down easily into itemisable chunks. It’s a bit too creative and complex for that.

However, I do understand we need to make this work financially for you. If we need to reduce the scope of the work to fit within your budget, then I’d be happy to work that through with you.

There are nearly always things that we can remove, simplify or leave for a future update, so I’m sure we can work something out.”

This changed the conversation completely. We weren’t talking about costs or time, we were talking about quality and making sure the client got what they needed. This is the right conversation to have.

And it’s actually more truthful. You usually end up doing the work to the best of your ability anyway. If you cut corners in your work, your soul starts to suffer and you end up feeling miserable. Your going to do the work whatever, you need to be making enough for your efforts.

The projects we do has to work for our client, and for us. If it doesn’t work for everyone involved, then we don’t really have a business at all.

So how did it all pan out?

Brilliantly!. The client got some other quotes, some lower, some higher, but they wanted me to do it. I’d been honest and candid - they liked that. (Clients always like that.)

The project came together superbly, exceeding the clients expectations on all counts. There were a few scope changes as we went along, but i’d accounted for that. It was nice to be able to just say, “sure - no problem” rather than having to banging on about scope and re-quoting all the time.

And because I had the time in the budget to do everything as well as I could - it was work I was really proud of.

All good!

Key takeaways

These points sum up my pricing strategy and work really well. I do my best work, I get paid well and my clients are very pleased with what I make for them. Literally; everyone’s a winner. Here goes:

  1. Choose a price for your best work and stick to it. Think, “How much do I need to be able to do the project the way I think out should be done”.
  2. Charge enough to feel a little uncomfortable with it. That will make you try harder, work better and everyone wins with that.
  3. Don’t talk about “hours” or try and justify yourself. Keep it simple. It is what it is.
  4. If they ask for breakdowns of hourly rates, explain that you work to a fixed project price as clients tend to prefer costs rather than a price that will change.
  5. If they do ask for a discount, then say no, because that would involve taking shortcuts or not doing things right. Instead offer to reduce the features, or scope of the work if they need to bring the costs down.
  6. Don’t get dragged into competing with other suppliers - but do encourage them to ask around. You have nothing to hide.
  7. If they really can’t afford you, that’s ok, let them go. After all, you can’t afford to work for them either. Everyone, including you needs to get what they need out the deal.