Taking the Stress Out of Quoting Freelance Projects

By Ed Gandia

For many freelancers, one of the most stressful aspects of their
business is quoting project fees to a new prospect. There’s a lot at
stake. Quote too high and you risk losing the project. Quote too low
and the prospect may wonder if you’re a newbie with little
experience.

The best solution to this dilemma involves the use of a “master fee
schedule,” which is nothing more than a list of the types of
projects you work on and an approximate fee range for each.

The beauty of a master fee schedule is that it takes the stress out
of the quoting process. That’s because when you’re confident that
the fees in your schedule are fair and reasonable (based on the value
you bring to the table and what other freelancers at your level are
charging), you no longer have to worry about quoting a fee that’s
going to scare the prospect away.

Sure, she may still decide that you’re too low or too high. But
that decision will be based on her budget — not your value.

How Do You Assemble a Master Fee Schedule?

#1: Ask fellow freelancers
Developing a reliable fee schedule takes time. You can start by
talking to fellow freelancers and asking them what they charge for
different types of projects. You should also factor in the feedback
you get from clients and prospects when you quote various projects.

#2: Scour the web
Many freelancers will also post their fees for a variety of projects
on their website. You can poke around and get a good feel for what
others are charging. However, be careful with those figures. There are
thousands of freelancers doing work for virtually nothing. That’s
not where you want to be.

#3: Consider the time and effort required
You should then compare this information with the time you spend on
projects. You’ll want to see if the fees you’re charging are
aligned with the time and effort you’ve been putting in. You’ll
also want to compare how your colleague’s fees compare to the
average time you’re investing in some of your projects. That can
reveal areas where you might be undercharging.

I use a tool called TraxTime to record the time I spend on every project
(For Mac users, you have other options. My friend and colleague Steve
Knapp uses “On The Job” from Stunt Software.

Every three months or so, I run reports in TraxTime to find out how
I’m trending in terms of time spent on different types of projects
and profitability levels with each of my clients. This information is
invaluable in helping me evaluate and update my master fee schedule.

#4: Books and Reports
Other good sources on fees are books and reports written by
professionals in your particular field. For instance, Steve
Slaunwhite’s Pricing Your Writing Services is an excellent resource
for freelance writers (Steve is a friend and co-founder of this blog,
so yes, I’m biased!).

So is Michael Stelzner’s White Paper Writer Industry Report. Also,
The Designer’s Guide To Marketing And Pricing: How To Win Clients and
What To Charge Them by Ilise Benun and Peleg Top, has been
recommended to me by several graphic designers.

Whatever your field, you will more than likely be able to locate a
book, article or report on pricing for your profession via a quick
Google search.

How to Use Your Master Fee Schedule

Here’s how I use my master fee schedule to qualify a lead. Say that
I get a call from a company looking for someone to write three case
studies. My fee range to write a two-page case study is $1,500 -
$2,000. This includes an interview and up to two rounds of edits.

Once I understand the full scope of the project, the work involved,
the prospect’s needs, degree of urgency and other miscellaneous
factors, I pull out my master fee schedule and quote a range.

But I don’t quote the full range. Instead, I usually quote from
somewhere around the midpoint to the high point. So I may quote $1,500
to $1,750. Why? Because, invariably, if you quote from the low point,
the low number is the only number many folks will remember. Quoting
from the middle up avoids this problem. It helps you set the right
expectations. Also, it gives you a cushion that can protect you should
the project be more difficult than you expected.

Once I quote the fee range, I’ll ask the prospect, “Is this range
within your budget?” I find that this two-step approach (asking
first if they have a budget and then quoting a fee range) is more
effective than the more abrasive “What’s your budget?” question.

This last question is important because getting the “money” issue
out of the way as early as possible will reveal if the prospect is
viable from a budget perspective. In many cases, it will keep you from
having to spend a lot of time thinking about the project, drafting a
proposal and following up three or four times with a prospect who was
only willing to pay half of what you’re asking.

Finally, if the fee range fits within the prospect’s budget, let
the prospect know when he or she can expect your proposal. Even if
they ask for one, never give prospects a firm number during the
initial call. A fee range is as far as you should go. You need some
time to think through all the factors and arrive at a number that
makes sense.

Is this a foolproof system? Not at all. But it takes a lot of the
stress out of the process. It also saves me a great deal of time. It
impresses many prospects who want straight answers (rather than a,
“Well, it depends, Mr. Prospect. I can’t really say.”). And,
above all, it enables me to land more profitable work.

—

Ed Gandia is the co-founder of TheWealthyFreelancer.com and co-author of The Wealthy Freelancer: 12 Secrets to a Great Income and an Enviable Lifestyle (Penguin, 2010). To grab a free copy of his “Freelancer’s Income Expander Kit” (a $126 value) visit http://www.TheWealthyFreelancer.com.