Freelance advice?

levieenrose

I am so lucky--I have been approached by a major academic publisher looking for freelance work in image research. I've done this work before, but I don't feel that I earned a terribly fair wage at my last place of employment. I'm just getting more details from them about the scope of the project at this point, but I also have no idea what my rate should be.

Freelance folks, how do you figure out what is a fair price? Do you charge hourly wages or is it a flat fee for the contract? What factors should I take into account, and how do I not end up kicking myself for either pricing myself out of range or selling myself too short for what might end up being stressful work? 

JCbride2015

My mom works sort of freelance-- she owns a small design business.  She and her partner charge a flat fee depending on the size of the home and the type of service needed.  It took a LOT of trial and error and I think she is still selling herself somewhat short.  The best thing that she did though, after it had been a year and they weren't profitable yet, was really compare herself with the competition.  She figured out what the competition was charging, and then tried to price herself somewhere around the bottom half/third of the pack.  Not rock bottom, just enough to still be a bargain.

Can you find a way to figure out what the competition is charging and whether they are based on a flat fee or hourly rate?  Back in college I did freelance web design and charged hourly, but clients always wanted to know how many hours I thought it would take, so I wound up estimating sort of a flat fee anyway.

manateehugger

Disclaimer: not a freelancer, nor have I ever worked with a freelancer client, but I worked as a compensation consultant for years. The biggest thing with self-employment (which essentially is what freelancers are), is that you have to take into consideration the total cash compensation employers offer versus an hourly or salary base pay and the blow of paying self-employment taxes.

My recommendation would be:

1. Dig around and do some market research. How much do freelancers in your field, in your general location (or a location with similar cost of living), and with similar work experience typically charge? Do internet research, but also call around to local freelancers (or see if they have websites). Good networking and good research. Find a good median number to consider. There also might be some publically available salary surveys out there (though take these with a grain of salt - publicly available compensation surveys often use shaky methodology).

2. Calculate up your personal and business expenses, keeping in mind that employer benefits no longer apply to you - taxes, 401k plans, PTO, health insurance, etc. So what is the annual salary you need to survive (this will be a different number for everyone, which is why you need a good range when doing your market research)? Do not compare employer rates to freelance rates - they are not comparable. You are far less protected and assisted without an employer - $25/hr with an employer is a decent rate. $25/hr as a freelancer probably isn't for many people.  

3. Divide the annual number above by the number of hours per year you think you will work (remember you will need to take time off like any one else who earns sick leave and vacation will need), and you've essentially got an hourly rate for yourself.  

4. Figure out what the tax rate on your services needs to be and fold that into your number. 

5. I would strongly advise using flat rates for projects rather than giving the prospective client an hourly rate. If you give an hourly rate, you are offering the client a chance to estimate the number of hours a project will take you and your worth. A flexible flat rate that you're willing to negotiate within an acceptable range leaves most of that control with you. HOWEVER, if you go this way, I would look to include some sort of scope note in your contract. That way you won't have clients abusing your flat rate; if the project goes outside the originally agreed upon scope, you will want to charge more.

 

levieenrose

Thanks for the insight, JC! 

I have been searching for competitors online, but I'm having difficulty finding anything that relates exactly to the work. Won't give up, though.  

levieenrose

Wow, thank you Manateehugger! 

I was just thinking, "well, I know how much I made as an intern...so maybe just upping the antee a little?" I am (and frankly, I also think I was) worth more than the wages I made as an intern. But you're right. I should take into account health insurance, taxes, etc. 

Especially thank you for point 5. It makes a lot of sense. If you hadn't pointed it out, I probably would never have thought about strategy that way.