I hear a lot of bad advice on how much to charge for freelancing that leaves good money on the table. The most commonly suggested method is the “cost plus” style, where you calculate your desired hourly rate, multiply it by hours worked and get your cost. Don’t use this method, there is a better way!
Last year at Iowa Code Camp (and more recently at the Des Moines Javascript group) I gave a talk on how to so succeed at freelancing and always the most asked question is how to decide how much to charge. When Des Moines Web Geeks had their social event I gave a condensed version of the talk focused just on how much to charge. That talk was recorded and uploaded to YouTube. Considering how high the interest is, my plan is to re-record this and upload it as a free course to Udemy, but in the mean time, here is a short (21 min) video of my talk.
Will these methods work for me?
The methods described here are general purpose and should work for any freelance work, wither it be technical, writing, art / photography, cake decorating or whatever.
The talk is also equally relevant if your freelance income is side work or your primary revenue stream.
Summary:
This video discusses three methods for pricing:
- “Picked from air” – in other words, simply guessing and hoping you’re right
- “Cost plus” – trying to estimate how much time a job will take and multiplying by your desired hourly rate
- “A better way” – pricing based on the value provided – a technique that takes some practice to get right, but when done correctly provides the greatest revenue for you and helps your clients to feel that they’re getting the best quality product
This recording of my live presentation discusses each of the points in detail and gives the benefits and disadvantages of each. (yes, even “picked from air” has some benefits)
If you’d like to see this presentation live or if you’d like to know when the higher quality version of the presentation is available, please leave me a comment or direct message me on Twitter.
