The next thing to determine is the retail value of the work you are going to deliver. You can do this by Googling, knowing your industry, talking regularly with your peers, reflecting on your past experience, understanding your client’s financial goals, and consulting with mentors.
Graphic designers have the Pricing and Ethical Guidelines to reference; your industry might offer something similar. As you gather data on other peoples’ rates and salaries, keep in mind that some people may not be paid fairly, so some data may be more noise than signal.
Part of the beauty of freelance work is that you get to decide what’s fair. On the flip side, the market will keep you honest. If a client is asking you to create a logo, for example, chances are they’ve asked others to quote the same job, and their reaction to your quote will give you an indication of whether it’s over or under the market. This is just another data point of course, not an absolute truth, but after a few failed attempts at charging $10K for a branding job, you might learn that charging $7K is actually more lucrative for you, because at this price you’ll actually be working.
Your quote needs to be somewhere between your cost basis and the retail value of the work. That difference is your profit margin, which is the money that stays in your business savings account until you either need it for an emergency or it’s time to pay yourself a bonus, whichever comes first.
Play with margins, shooting for 50%, in your Excel model until you settle on a quote that matches the retail value of the work. Make it precise, and not too round in number.
When you put out your first quote, it is not unlikely that the client will come back to you with a startled tone and a story about budget constraints. Don’t be mad. This is part of the dance, and now it’s your turn.
You’re reading a preview of an online book. Buy it now for lifetime access to expert knowledge, including future updates.