Sunday 2 April 2017

How To Fix Rates As A Freelancer?

This is another frequent ask from the beginners.

I find many struggling with pricing model/ commercial piece of their proposal to bid for assignments. This is an issue with both the kinds -

(A) People who have extensive experience 
(B) Fresh graduates and work at home moms 

The point I will drive today is this, you should be able to do the following appropriately and effectively, regardless of what you charge your buyers

1. Alignment of skills and experience to your quote
2. Set your rate based on what value you bring to the table.

Here is an example for better understanding

Think about a job in a local health spa

After 35 years of corporate experience and career gap of two years if you are hired to provide spa treatment after in house training, will your remuneration be based on your corporate experience/ last drawn salary or based on your limited expertise in spa?

Now think about a project in an online portal that you want to bid for

You have 20 years of sales experience however you have never done a power point presentation from scratch - How fair is it to charge a buyer for a sales pitch deck, based on your sales experience alone? 

Are you not supposed to consider your expertise in content and power point as well while quoting your fee?

You have to acknowledge basic reality first.

1. Are you  still learning the tricks of the trade?

2. Is your experience relevant to the skill you are offering?

It is just a roundabout way of telling the beginners, it does not matter what experience you have, what skills you offer as services or what rates you want to set, you should 

(A) Be good in what you do
(B) Be able to articulate in your proposal what and how your offer is beneficial to your buyer and justify that rate.

In Buyer's Shoes.

Imagine a prospective buyer’s dilemma when he receives multiple quotes for the exact same job/ project/ assignment (say, creating a power point) and the quote ranges from $40 to $450.

Quote 1

Quote 2
Quote 3

Content will be created after thorough research

Content with research included.

$80 Content Writing in story board format (Customized for target audience) – 8 Slides
$20 Format and animation
$90 Research (Feasibility, Industry and Competition analysis
$10 Logo upload /Color schemes
$20 Smart Art (Visual Theme)
$20 Tagline in Title Slide
$80 Talking points for each slide
$70 Rationale Document or tips to prepare the presenter for dry run/ go live.
Timelines: 7 Days
$60 Express Delivery 4 Days
Buyer has no idea how many slides he will get 

What sort of research will be done.
Here a buyer can assess if the rates for each piece of work quoted is exorbitant or reasonable.

Here are a few possibilities:

The buyer can increase his budget to accommodate your quote and award you the order because he knows he is getting a deck ready for real time presentation the minute he receives it. 

The buyer may have limited budget and ask you, if you can drop it to $200 – You sure can as long as he is providing the researched inputs (That is what will take most of your time) 

He will ask for samples because he cannot afford you and yet wants to see how your mind works.

Know your worth and when you quote, consider the following:

(A) Is your skill niche or easily available in the market?
(B) The time required to execute an assignment
(C) Inputs / research materials/ support that you need from buyer - the less your dependence on buyer, the more you can charge
(D) The depth of research you need to do
(E) The proportion between doing and thinking - The more thinking required, the higher the quote.

One last tip on justifying the quote -

Never sell the solution (your services) through a price. 

Aim to sell the price through your solution. 

Your solution - the detail inputs you provide in the proposal should be so good that the price will seem reasonable and affordable

Write to to evaluate your proposal and share neutral perspectives. Know more here 

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