How to Charge When You Freelance
At some point during every conversation about a potential freelance job you're going to talk money. Occasionally a client will tell you what they want to pay, but more often they'll ask you how much you charge.
Day Rate, Hourly or Project Fee - the three methods of charging that creative freelancers need to know.
Even before you come up with an amount, you have to decide on a method of charging. And there are three distinctly different ways we've used and continue to use. By the hour, by the day, or by the project. While some freelancers try and stick to one method, the savvy creative freelancer uses all three methods depending on the client and job.
In this article we’re going to walk you through the pros and cons of each, and offer some pointers on how to make them each work for you.
How Freelancers Should Approach Hourly Jobs
Hourly is the easiest and most common method of charing because it’s easy for everyone to understand. You agree on an hourly rate, and then you bill based on your hours. The upside is it's an easy sell, and you can schedule more than one hourly projects at time. The downside is if you’re not getting enough hours, you aren't making what you need.
Most freelancers in the early stages in their career start with hourly. While we highly recommend moving on to another method as your primary way to charge as you gain more experience, we both still use an hourly rate especially on smaller projects, and when helping out a non-profit or friends.
Here are a few things to keep in mind to making hourly work.
Track of your hours religiously.
Choose a time to log how much you've worked every day. Maybe it’s the first thing you do when you sit down to work, or the very last thing you do at the end of your work day. But you need to do this because if you don’t, two days can turn into five days and all of a sudden you’re trying to remember how much time you really put in. Maybe you overestimate your time and overcharge a bit, or maybe you underestimate and essentially reduce your rate voluntarily, but either way you’ll fail to do the next really important thing when it comes to hourly, which is coming up in the very next paragraph.
Keep your clients constantly aware of how many hours you’ve put in. Not every day, but frequently. Because if you put in 50 hours on what you and your clients agreed to was a 60 hour job, and you're only halfway done, you are going to have an unhappy client. Whereas if you are 20 hours in, and you tell your client it's going to take a lot longer than the 60 initially agreed upon and why, you can have a productive conversation about how best to move forward.
Finally, keep track of all your hours. If you’re an illustrator, count all your illustrating time. But also count the time you spend on client calls, the doing paperwork time, the emailing back and forth time, and the thinking time you spend consider what to illustrate or how to respond to feedback. If you come up with a great idea while grocery shopping, think about it on the way home, and write or draw or design something up in 10 minutes, charge for the full hour! You’re allowed to chew gum and walk or shop for groceries at the same time.
The Freelancer's Friend: The Glorious Day Rate
Day rate is Valhalla for freelancers. It means your client essentially owns your entire day. But the upside is you don’t have to worry about tracking hours or stringing together enough of them to make what you need. You just add up the days you worked. The only downside is there are some places that will expect you to essentially work the entire day, from morning through afternoon into the evening if not the night. Couple quick pointers here.
You’ve got to be pretty experienced with some great work under your belt to earn a day rate. (With the notable exception of on on-set production jobs, where everyone is expected to be present and work the entire day of a photo or film shoot.) So if you’re junior or mid-level, no harm in asking, but know it’s something to look forward to if you can't get your client to agree.
When you work a day rate, give your entire day. If you got a doctor’s appointment or something else you’re wrapping up, go do it. But you’re being paid to be essentially be available and on the project all-day long, so be it. If you're expected to be on-site, show up on time and be on site and don't slip out at 4 unless you're specifically told you can leave early. If you're working remote, answer any calls or emails right away. Waiting an hour to call a client back sends the message that you're not working.
Something to be aware of is different clients will interpret a day differently. Sometimes it's an 9 or 10 hour day, but there are clients that will expect you work 14 or 16 hours, especially if it's a new business pitch. Long days are also the norm for production jobs where shoot days are almost always long. If you don't mind, great. But if you're wary about working long hours, ask fellow freelancers or even the person hiring you what the work life balance is like before you start the gig.
Pro tip: there is a move called “Double Dipping” where you essentially work two places at a day rate at the same time. Which you can pull off if and only if you’re really, really good and really, really fast and are willing to work a full day, then work another full day into the night. We actually have an entire video about this on our bonus advanced technique section on how to pull this off.
Project Fees and the Freelancer
A Project Fee is often a preferred method for clients, especially on longer terms projects that won't require a freelancer's full time. It makes their life really easy. They have a certain amount budgeted for what you're going to provide and they know you will deliver and won't go over budget because you’ve agreed to a set amount.
There are some upsides. You’re already making your client happy, which is part of the job. And if you’re really good and really fast and can figure out what the client wants and give it to them pretty close to how they want it right out of the gate you can make really good money this way. But the downsides are if the job takes longer than you expect, or you get mired in rounds and rounds of feedback you will keep working and working without making more money.
So, be really clear on expectations. Talk through the process and number of rounds of presentation and feedback with your client, and be really clear about what the final deliverables will be and how you will deliver them before you take on the job. We actually have a PDF of all the questions you should have answers to before agreeing to a job that comes with Mt. Freelance course. It's important to ask these answers up front for any job, but in particular a project fee job where you're agree to a set amount of money for what might be a large and long project.
Remember: A project fee means you get to work on the project however you like. You can and should agree to come in for key meetings or to present your work, but you should also empower yourself to work on your own schedule and mark out times you are unavailable.
Which brings up another upside of project fee work. Like hourly projects, you can work on more than one of them at once. In fact, project fees work really well if you've got some ongoing clients that don’t need your help on a daily basis. It’s not uncommon for senior level creative people to have 5-10 on-going project fee clients going at once. As long as you’re organized and don’t stack deadlines on top of each other it’s a pretty fun way to do lots of good and/or lucrative work at once and not be all consumed or bored by one project.
Lastly, remember that a project fee isn’t a life sentence. You should be clear up front that if the job goes over a certain amount of time or a certain number of rounds of feedback because of their process or their client's process you will need more money.
So there you go. If you want to learn more lessons along these lines sign up for the Mt. Freelance course. We've got lots more to share.
Andrew & Aaron
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