Scopic Pricing Guidelines
 

Back to Setting Your Rate As A Creative Freelancer

From our own experiences as freelancers, we know fair pricing is one of the toughest things about the freelance market these days. That is why we have done the research and hard work to help you figure out how to appropriately price yourself. Hourly rates are just a starting point for your final equation but we thought we would give you a start by helping you pinpoint what price range you should fall under due to your experience and skill level.
 

INTERN: $15 /hr

You are the newest of the new. Perhaps you are fresh out of high school, or want to switch careers. Your industry knowledge and technical skills might be limited, but you are enthusiastic and eager to learn. 
 

STILL GREEN: $20-$35 /hr

You are rigorously teaching yourself or are in the midst of a school program. Maybe you have one or two internships under your belt and some related experience. 
 

UP-AND-COMING: $36-55 /hr

You have a year or two of industry experience and strong educational foundation to guide your professional practice. You still have a lot to learn, but your education, training and accolades are proof of your value in the market. 
 

EXPERIENCED: $56 - $75 /hr

You've been in the business for a few years now. You have refined your technical and professional skills and a lot of great ideas to bring to the table. You have paid your dues and have the great work ethic, portfolio and chutzpah to prove it!
 

EXPERT: $76 - $150 /hr

You have had loads of job experience, and are a seasoned professional, You know your creative process so well you could patent it. Your business skills are those of a wizard and your client relations are unicorn-esque. 
 

PRO: $150+ /hr

You know who you are, go get em'!

 

 
Scopic
How Much Should I Pay A Freelancer?
 
In this article, our friend, community organizer Marina Martinez, provides a practical, no-nonsense guide to pricing so that freelancers and those who hire them can start out on the same page. See original here.


In my work I find myself talking to a lot of new freelancers as well as local businesses looking to hire freelancers for the first time, and almost universally their first question is “Where do I find clients/freelancers?” Luckily, there are plenty of resources available that not only tell you how to find freelancers or clients, but actually streamline the process of choosing and hiring.

The second question I usually get from new freelancers or expanding businesses is “and how do I charge/pay them?”, and unfortunately, there is not a lot of good, solid, numerically-explicit information on this topic. I feel like that is primarily based on a lot of fear.

As contract workers, we are afraid of working too much and not earning enough; as business owners, we are afraid of paying too much and not making enough. As both, I can say that they are equally valid concerns. However, this should not keep contractors and business owners from communicating with each other about our needs and expectations.

No one I work with, on the business side or on the freelance side, wants to live in a world of scarcity. No one wants people to be unable to support themselves or their families and employees. No one wants anyone to be stressed, frantic or over-burdened, least of all the people we work with.

 

Rule of thumb

In order to pay people enough to do good work, I recommend paying a base minimum of twice as much as you would pay an employee to do the same job. Then, increase that number exponentially based on years of experience and professionalism.

The reason we pay twice as much is because freelancers routinely pay 40-50% of their income to taxes, supplies, and healthcare costs. The reason we increase exponentially is because potential returns increase at the same rate based on experience and professionalism. A new freelancer is still learning their own process. For every level they advance in terms of experience and professionalism, they bring their clients exponentially higher returns.

When years of experience and level of professionalism contradict, look for another freelancer. But, if you insist on hiring someone whose experience isn’t roughly commensurate with their level of professionalism, I recommend you pay them based on their professionalism.

If you have never hired a freelancer to do this kind of work and you’re not sure what you would pay them if you did, I have made a table to help you establish your minimums. This is the absolute minimum a decent employer would pay a contract worker based on their experience.

 

How to apply the contractor pay table

Start with the minimum based on the level of professionalism and experience you perceive your contractor to have. Then, increase the rate based on attributes such as:

  • their years of non-contract experience in the industry
  • specialty degrees and certifications (M.D., J.D., etc.)
  • industry averages
  • other professional benchmarks like awards, clients, and the things you personally look for in an ideal contractor (ex: has great website; always emails back the same day, etc.)

If you find yourself wanting to decrease the rate, do not hire that contractor. They are not the right fit for you.

 

Contractor Pay Table  

Absolute Minimum: $15 /hr
This leaves the contractor with about $10 per hour in their pocket after taxes. Anything less than that would be inhumane. This rate is reserved for completely untried contractors in their first six months of working with them. If you have someone you’re paying $15 an hour and they are not worth $20 in the first 6 months, and $25 after their first year, you should fire them and hire someone who’s worth paying more.

Beginner (0-1 year): $25 /hr
Contractors with less than 1 year of experience are just getting their bearings. They are just learning about their own process, and may even be figuring out whether or not this is the right move for them. They are completely unreliable in terms of long-term availability or project success.

Startup (1-2 years): $50 /hr
Most contractors quit in the first two years. Hiring someone who has less than two years of experience under their belt means that they may not be around in 5 or 10 years when you need to continue the project or make a new version of the thing they made you. Their product is still somewhat unreliable because their attention is divided.

Established (3-5 years): $100 /hr
Established contractors have documentable processes and campaign success under their belt. They are far more likely to stay in business long-term, and they are mostly reliable. They may have sub-contractors they work with, but they are the primary point of contact for their clients. They should have some published work to refer to, even if that’s just a blog or podcast.

Experienced (5+ years): $200 /hr
Experienced contractors are similar to established contractors, only more so. Their processes are fully documented, their product is completely reliable, and they are professional and easy to work with.  They frequently have their own team, but they are available for their clients. They speak at conferences occasionally; they have a book or a popular blog or podcast.

Distinguished: Asking Price
Distinguished contractors are the top 3% of their industry. They are regularly asked to speak at conferences, they have published books, and they have industry-wide, nation-wide and even world-wide name recognition. Their processes are the most reliable in the industry. They have a large team, and although you probably won’t be working directly with them, their name recognition alone opens doors that would be closed to other contractors.

 

A Note on Project Rates

Most professional service providers (myself, for example) won’t take hourly work from new clients after their first year or so in business. Instead, they sell packages and projects.

For some contractors, projects and packages are based on a percentage (usually 10-20% but sometimes as much as 50%) of what they expect their client will make off their professional services for the first year that they are implemented. Many people believe this is the ideal pricing structure for both client and contractor.

Unfortunately, in order to appropriately employ return-based pricing, the process has to be very reliable. Since every client is unique, this kind of reliability can’t be guaranteed in the first six months of a new client, a new process, or new parameters. Some contractors who use this pricing will counteract this by restricting their client-type, on-boarding a lot of clients, and quickly off-loading anyone for whom the process is not working. For the clients that experience success with this process, it is extremely rewarding.

Most businesses are constantly experiencing significant changes in processes and parameters, so most contractors will employ a combination of return-based and hourly-based pricing for their packages.

A contractor will assess how many hours it will take them to accomplish the associated tasks, and then quote the client an amount based on this hourly commitment.  If an immediate, quantifiable return is a sure thing, sometimes the contractor will add a percentage of the lowest possible return estimated.

Some contractors will say that they don’t base their rates on an hourly rate at all; that they base them on operating costs. This is an accepted and respected billing logic, but it can also be broken down by hours for comparison purposes.

 

How the table will work in your business

At the end of the day, we have to feel like the amount we pay is worth the work we get, or no table will help us. I wrote the table with the expectation that the person who uses it will believe, as I do, that all people deserve to be paid a living wage for their work. I live in Oregon, there the minimum wage is $9.45, and I am one of the many business owners in the state who fervently supports the $15 minimum wage.

I use this logic to pay my own contractors and I can honestly say that paying people has become a joy. There is a framework behind why I pay what I pay, there is an expectation based on rate of pay, and when I pay invoices I feel relieved that this work is being done for me by people whom I trust to deliver.

I believe that no one wins an unbalanced deal. If I “get away” with paying a valuable contractor less than their value, I’m cheating myself more than the contractor. I also believe that, as I support newer contractors and encourage them to develop professionally, their work may become worth more than I can afford to pay. That’s something to celebrate and I would never want to hold anybody back by demanding that they stay in my price range because they’re growing faster than I am.

We are encouraged to be afraid of losing people, or money, or both, but I didn’t build this business to be afraid. I built it to make things better and create connections, which is the opposite of fear. So, when you use these parameters to hire your freelancers, know that I wrote them in order to ensure that everyone involved was treated with respect, and given the best possible results for their level of investment, and please use them in that spirit as you go forward.

 
Scopic
Value-Based Pricing: Don't Sell Yourself Short
 
This article by Scopic freelancer, master hand-lettering artist, and educator Dina Rodriguez, can help you feel confident in asserting the value of your work to potential clients. Full article below. See the original here.

 

An inside look into what techniques are necessary to establish the confidence to charge clients what you’re worth. Time + Expenses + Value = Value Based Pricing

People seem to think that they only need to be compensated for their time and expenses, but what about the overall value of what you’re providing to your client. If that new website your building is going to allow that business to grow and make over 500K over the next 3 years then you should be charging a higher more appropriate price to reflect that.
 

Establish a baseline price for your expenses and time first.

It’s important to include not only your project specific expenses but also the equipment and software you use every month to do business. First and foremost you should be charging enough to keep the lights on, no matter what the cost.

You will have a different baseline price for each different service you offer. It will take more time to develop a 5 page website then a business card so estimate your hours accordingly and don’t forget to add a buffer of 5% as a safety net.

As a freelancer or business owner you are in charge of paying yourself meaning that you need to decide on an hourly rate that reflects your professionalism and experience. Once you have established this baseline estimate then you can increase your pricing according to the realized value of the project to the client.
 

Your client is responsible for estimating your value, not you.

When you’re first approached by a client you need to set yourself apart by focusing the conversation around being a consultant not a technician. Be inquisitive about their business goals by asking questions like “How much net profit do you anticipate for this upcoming year?” or “How much money are you willing to invest to insure the success of your business?” These questions help your client realize that what you bring to the table creates additional value long after your services are completed.

Let’s be honest, your services alone can add 25% – 50% of additional value for your client. You are an amazing problem solver and you need to approach your client with confidence in order to build trust. This confidence will enable you to provide additional value that will make your client invest more. Remember that you’re a professional so if your client says no to your final estimate then you didn’t really want that client to begin with.
 

There is no such thing as bad clients, only bad designers.

I know this is hard to hear and with websites like Clients From Hell it’s a hard thing to argue. The sad truth is, taking on clients that are rude, disrespectful and broke are the designer’s fault. We should be experienced enough to be able to recognize a potential painful client and be able to say “NO!” If every designer had a higher sense of worth then it would be the client that needed to raise their investment rather than a designer who had to underbid to pay their bills.

No matter what, there will always be someone in your industry who is going to charge less than you but it’s important to remember that your prices are not meant to be competitive. You need to distinguish yourself apart by conveying the unique value you can bring with a positive track record of successful projects. Use your portfolio and case studies to speak for themselves on the quality of work you can provide.
 

Work smart so you won’t go broke.

In the beginning of your business you will need to have diversified sources of income in order for value pricing to work. Allow your professionalism to grow organically, or else you will compromise and end up creating sub par work. Don’t put a financial strain on your self. Get a day job that pays the bills so you can build up a portfolio that will gain trust for your audience in order to get the clients that you want.

Yes, this technique is going to make you miss out on clients, but think of the kind of client you’re missing out on. One $40,000 project would easily make up for the ten declined $2,000 projects. Its just the fear that the $40,000 project will never come that prevents us from doing our best work. Grow your business the right way and don’t compromise your projects to pay your bills.
 

Be confident and the high paying clients will follow.

You’re not a production monkey, so don’t act like one. Set yourself apart by being confident in your work and don’t show that you’re desperate. If you follow this pricing structure; rather than getting clients that just shop around you will get clients that only want to hire YOU.

Clients need to be managed and consulted not the professional. I’ll end this with just a simple question. What would happen if you hired a doctor and then told them how to operate on you?

You can use this advice or not use it, but it is going create the best results for you. Don’t look at what your friends and colleges are charging to base your pricing from. Recognize the true potential you have and realize the value that your are creating every day. I want to enable you to pursue your own passions without hesitation.

Don’t be afraid. I dare you to double your rates. Price your self as a professional not a commodity.

 
Scopic
The Price Is Right
 

Back To Setting Your Rates As A Creative Freelancer


For our, The Price is Right: Design Week 2017 event 50 people joined us to help tackle one of the biggest quandaries we face as creative freelancers: how much should I charge for my work? Don't fret if you weren't able to join us, click the button below to get the presentation slides for your own viewing pleasure. 

And lets us not forget, a very special thanks to our guest speaker, Keith Lay

 
 
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