I’ve been getting many questions from students asking how to price a job. So I’ve decided that I will add some best-practices tips for new freelancers on my site.
There are 2 important things to consider when pricing a job.
The first is, what the job is worth to the client? Ask them what their budget is. Most times they won’t tell you. But honestly, if someone was shopping for a car or a house, they would have a budget they had in mind.
The second thing to consider is, what the job is worth to you? Is this a project that will fill out your portfolio, or has some prestige? Then you price it to get the job.
If you can get a sense of either of them, it’s a good starting point.
What I generally do is figure out how many hours it will take me to do the work. Included are meeting times, and rounds of changes. Also consider how many versions you will present. I specify in my proposals: initial designs, up to 3 versions, and 2 additional rounds of changes. You should be able to get an idea from the first presentation what they are looking for, if they haven’t told you up front. Additional rounds of changes cost more, especially for clients who are undecided or don’t really know what they want.
Determine your rate of pay: $25/40/60/hour?
Try and come up with a final number in multiple ways, and see how closely they match. What is your gut price? When you break it down by hours and $rate do you come up with the same number? Work through each step of the process: research, sketches, layouts, rounds of changes, build, debugging. What’s your number now?
For example, 3 days is 8 hours x 3 (24 hours). At $25/hour, it would be $600 for 3 days of work. A week is 40 hours. At $25/hour, a week is $1000.
Remember that you may not be overly productive every day, or you may be focusing on multiple projects, so while you may bill for 24 hours, put in additional time into your timeline. So give yourself a week to do 3 days of work.
As you get more work, you gradually raise your rates. I recommend increasing your rate on new customers as they come in, rather than raising rates on existing customers.
Corporate clients should be charged top rates. They have bigger budgets, but more importantly, there are more meetings, delays and more levels of people who have to buy-in to the designs. Price accordingly. You generally don’t have to worry about getting paid by a corporate client, however, it often takes 45-90 days from the time you invoice them to getting paid. Don’t fret too much. Just don’t plan on getting the money right away. This waiting time is worth charging top rate.
Small businesses, and individuals get lower rates. Make sure you let them know they are getting lower rates by adding up the full amount and then subtracting the discount at the end. Or let them know your corporate rate is $50/hour, but you are only charging them $30/hour. They should know that they’re getting a discount.
People who ask for a discount are the worst clients. They quickly forget that you gave them a discount. And when they are fussy enough to ask for one, they are just as fussy when you do the work. They generally feel that their money is worth more than your time and work. So steer clear of them.
Designs for a website, with html/css deliverables, with up to 3 design options, plus additional 2 rounds of design changes (i.e., 3 rounds total) should be between $1000-3000 for a corporate client. Of course this depends on the complexity of the site, and how demanding the client is. Small business, friends, not-for-profit, $500-1500 for the same work. As you have more experience, the price for designing an interface would top out around $5000 for a corporate client, $3000 for small business/friend. The back end technology development is extra, unless we’re talking html/css.