Freelancing: Pricing Jobs, Quoting Fees and Getting Paid

For Creatives who are freelancing to keep the lights on and currently trying to figure out what prices to quote to a potential client without scaring them off, how to price different types of jobs and how to make sure you get paid for your work (even when the client is a total jerk!)

[This comes off the back of a recent interview with the totally nifty Kelly McClellan on getting started as a Freelance Creative in the games industry (how to get that first job, find clients, make ends meet while building your portfolio, etc). That interview has heaps more awesome advice! You can read it here!]

 

So, what happens AFTER they say “I’d like to hire you”?

Here’s the story: You’ve met a dude who needs some nifty work done – and it’s totally the kind of thing you’re geared for (Which is awesome because you probably need cash to keep the lights on for your OWN projects!)

So you’re like: “Hells yes I’ll help you out! I can totally do that for you Mr. Dude!”

…and he’s like: “Great! How much do you charge?”

You: “…um…let me get back to you on that”.

Then, if you’re anything like me, you search SO MANY pages of Google trying to find good advice on how to come up with fees and how to quote a price (without scaring this potential client away):

After all that, again if you’re anything like me, you a) learned a lot but STILL don’t have an answer for how much to charge and b) what you did find was ALL OVER THE SHOP and usually conflicting.

Yeah, I went through that too. It sucked and was confusing as hell.

In this article I’ll share the results of my experiments with pricing and quoting, you’ll find Kelly’s tips on pricing different types of jobs and at the end of the article I’ve included my FAVOURITE video on dealing with clients and getting paid for your work.

 

Look! CHOICES! (Or, How to NOT Scare Away Clients)

 

When I started this whole “how much should I charge” thing I started the same way everybody does – I created a spreadsheet and worked out how much I need to live each month, how much I WANT to make, how much I’ll have to work to make that, etc etc.

And, like everyone who goes through that process, I was surprised and frustrated when the “perfect” hourly fees I came up with weren’t so perfect for the Client.

“…but…but…they were PERFECT! I have a spreadsheet that says so! SEE?!?”

Couple reasons why I think that whole “What do I want to make?” method  makes it difficult to find/keep good clients:

Reason #1: Those “perfect” hourly fees are based on what YOU want right now – and how much of what you want right now has to do with bad habits, unsustainable living conditions and a desire for expensive things that you probably don’t need?

You’re human, it’s okay, we all think about what the Self wants first. It’s how we survive right?!? But you’ve gotta keep in mind that any fees you determine NOW (before figuring out the details of the job or if you even want to work with that client) are going to be HIGHLY SUSPECT and heavily influenced by needs based on a discomfort/desire that should probably be dealt with instead of relieved by spending money.

Reason #2: Every project is different because every PERSON you work with on a given project is different and they bring with them a whole bunch of variable stuff. You’ll have resources you didn’t have last time, making this project easier or go more smoothly. Or you’ll have brand new problems you’ve never had to deal with before. Either way every project has a bunch of X and Y variables you have to work out before you can quote Z.

Z being the time/cost you’re estimating when you make a proposal to a client. If you’re trying to quote Z before knowing what X and Y are…well…you’re just guessing aren’t you? Or, at worst, you’re talking out of your ass and that client isn’t going to want to work with you again anyways. Then they’ll tell other people that you’re full of shit and that reputation will spread.

So…just avoid that whole scenario by not letting yourself be tempted into quoting Z (time/cost of a job) before you know X (what resources are available) and Y (what problems you have to solve first).

 

What’s my solution?

 “Good Things Come in 3‘s”

 

After finding X and Y (see above for definitions) I put together an email with 3 different proposals, each with their own Z value (time/cost).

Client chooses which one fits their circumstances (which may have changed since we last spoke) and then we go ahead from there!

Here’s an example from a recent proposal (note, prices quoted here were based on the project work involved, what resources were available and what problems I’d have to solve to make these things happen. ie: don’t just copy my prices! Your project and your needs are different!).

Light Involvement

Design Direction Document: including project immediate purpose, long term goals, feature specifications, analysis of competing products and needs analysis of target customers. This is something you can take to a small game development studio and say “this is exactly what I want: how much would it cost to prototype and how long would that take?” which they can then produce a Project Plan for.

Timeline: 1 week

Costs: $390 (what this covers: partial minimum cost of living, tax)

 

Moderate Involvement:

Design Direction Document + Pre-Production Project Plan: including user stories, blueprints/wireframes, budget, production requirements and project milestones. With this you’d be able to hire just the freelancers you need to produce a Public Prototype.

Timeline: 4 weeks

Costs: $2000 (what this covers: partial minimum cost of living, business administration, tax)

 

Full Involvement:

An Indie Bits Production: All of the above plus I manage the project directly on an iterative, month by month basis. This means you would get an iteration of the project to review at the end of each month (starting as a minimal but functional prototype scaling up to a user friendly public prototype). Your feedback and any additional user testing would direct development on the next iteration.

Ongoing Development: Generally I recommend working in 3 month blocks, with the aim to release a live version at the end of each block. For example, you might bring me on to help you develop the Public Prototype of SUPER COOL PROJECT to be released live with a small group of early adopters. After that you may ask me to come on board again to develop towards an Alpha release over another 3 month period (with your first customers). If you want to continue working together we’d then move towards Beta (another 3 month project) and Gold (a final 3 months, aiming to get the whole distribution system automated so you can start work on the next project.

Exit Points: At each stage (Public Prototype, Alpha, Beta and Gold) we have an exit point where we can chat about whether we want to keep working together or go our separate ways. This way we we’re free to respond to shifts in the market or the need to pivot and re-evaluate the project if circumstances change.

Timeline: 3 months per milestone

Cost per milestone (minimum): $6000 (what this covers: full minimum cost of living, business administration, legal fees, minimal travel, tax)

Additional Costs: freelance creatives and developers per project needs

 

For a list of definitions on what I mean by stuff like Alpha and Gold checkout the end of this article on my Step by Step Production Framework

 

Yeah, But…You could get away with charging so much more!!

Yeah, I could, but then the only people who would then afford to work with me are sleazy sales dudes turned on by gamification or marketing companies who want advergames to sell more Coke or something. And I really have no interest in working with those kinds of people (besides, those people just give me the hibbie jibbies o_O).

My hourly wage is roughly $75 for consulting work (if I HAVE to give an hourly wage, I’d rather find out about the project before quoting – see reasons above!). This rough wage means that the kind of people I want to work with can afford to hire me if they genuinely need my help…and they’ll ONLY hire me if they genuinely need my help. Which is ideal, because then no one has to waste time or money on something that isn’t needed!

Yeah, But…Aren’t you afraid of someone underbidding you? Some kid in Arkansas could do the job for like, $5 an hour!!

No, what a client is paying for is NOT my ability to write a document, post a freelance job ad on elance.com, sketch pretty pictures or tweak vertices on a 3D mesh. They’re paying for the thousands of hours that have gone in to developing this very personal logic and reason of mine, my skill and standard of quality and a gut feeling for what to add/remove to make the project better.

Anyway, that kid in Arkansas is still there if that particular client really wants to pay just $5 dollars an hour. I’d rather work with someone who wants to work with me.

 

Pricing Different Types of Jobs w/ Kelly McClellan

 

Me: “It occurs to me that when I post this people are going to ask how much you charge for your work and how that might change between different kinds of projects. I get that question a LOT! Are you comfortable answering that?”

Kelly: Yeah, it’s cool, it’s just a matter of weighing a few factors – the client’s budget, how much I’m into the subject matter, and how much the project will benefit my portfolio. I have friends that will take a bit lower pay to work on something like Warhammer 40k illustrations – it’s something they are interested in, and it’ll also look good in their portfolio to have Fantasy Flight as a client. If there’s something I’m working on that I’m not super into, I might not take it unless it pays well!

Personally I try to never take a project that pays less than minimum wage when I do all the math. If someone wants a quote for five illustrations, I’ll estimate about ten hours for each one, so if I make at least ten bucks an hour, I could quote 500, which is pretty reasonable, though I could quote up to 1,000 and still be well within a decent hourly rate for a client with a small budget. Eventually you want to start charging more per hour once you have some savings built up and you can afford to be a little pickier.

I’ve heard the quote “If you’re working too many hours, you’re not charging enough,” which makes sense. The reverse is also true – if you need more work, sometimes you have to take jobs that don’t pay very well. Just try to avoid taking jobs that will ultimately pay you less per hour than you’d make flipping burgers unless you’ve got a really great reason to take it. I once took a job that promised only royalties because – a) The clients were reputable, b) I wanted/needed this project for my portfolio, and c) it was a steampunk project that I was super into (PS it’s on kickstarter!) so I knew the hours would pass quickly.

It’s hard to always advise “charge what you’re worth” because when you’re starting out, it’s sometimes hard to achieve that. But if you have a client that can’t pay what you’d like and still decide to take on their project, at the very least demand respect, good/specific art direction, and quick feedback.

 

Finally, what to say when you do have a totally crap client who’s being a jerk about paying you:

 

F*ck You, Pay Me (by Mike Monteiro)

 

 

 

So, how do YOU price your jobs?!?

 

About Epona

Epona Schweer wants to figure out what "switches on" creativity in people. Researching, experimenting and sharing results here. Writing books, making games and coaching folks all over the interwebs. Shoot me an email, follow me on twitter (@EponaSchweer) or drop me a comment and say "Hi"!

Comments

  1. Nice article! Here’s how I set my rate, since the article asks:

    As for “knowing what you’re worth” – I didn’t have to struggle with this nearly as much by the time I went freelance. The easiest way for me to get new contract work is through people I worked with previously, since I worked at several studios (and schools) before going totally mercenary. I seem to have done good enough work in the past that I now have a few dozen people I worked with before who, due to studio closings and layoffs and stuff, now work at lots of different companies. So now I occasionally get one of those “hey, we need some short-term help on this project and it’d be great to work with you again” calls. I wouldn’t be able to freelance otherwise – why would anyone hire me as an outside consultant when they don’t know me, since that’s just one more risk for a project, and since they probably already have a few outside consultants that their people DO collectively know? So, I start from there and I’d recommend anyone else do that too (for the game industry at least).

    So at that point, I already know what I got paid when I worked full-time for a studio (important: figuring out not just base salary but also cash value of benefits. So if I had medical and dental insurance at one place, and I have to pay for those myself now, that’s extra money that I was getting as a full-timer, so that gets added to take-home cash). Having worked at several places, and getting a general sense of whether I felt like I was getting paid well or poorly there (and adjusting accordingly), that gave me a baseline annual compensation for… well, if not what I was “worth” then at least what I had been able to negotiate in the past.

    Converting to hourly rate for short-term projects is easy. Assuming 2 weeks of vacation a year, that gives a nice round 50 paid work weeks per year. If I worked 40 hours per week on average (ha!) that’s 2000 hours per year, so divide annual pay by 2000 and that’s the hourly rate. If I felt I worked closer to 50 or 60 hours per week, that’s 2500 or 3000 hours per year, respectively. And so on. So now I have an actual number.

    For me, I consider the above number (my former hourly full-time rate) to be an ABSOLUTE minimum. In reality, freelancing is feast-and-famine, as I have no direct control over whether I have steady work (usually it’s either getting too many projects to do all at once, or getting dry spells with too little work). So if I’m “worth” a certain amount of money per year, I absolutely have to account for the downtime in between projects. Which means generally adding some kind of premium onto the minimum rate, for any short-term work (longer-term projects can relax this a bit since it’s predictable, steady income). Luckily, clients that need outside workers are generally already in a bind (otherwise they’d have the in-house staff to handle it) or else they just really really want to work with me, so either way they’re incentivized to pay a little extra anyway; so this isn’t usually a major issue.

    Then there’s the fudge-factor based on the particular work being offered. Will I get any fringe benefits from this project, like a really nice portfolio piece, creative autonomy, working with people who I really enjoy working with, or just working on a really awesome project that gets me super excited? Maybe I’ll drop my rate since I don’t want to endanger my chance of getting it. Is it a yucky project that’s sure to be a soul-sucking grind, but I’m in a dry spell and need the money? Charge the baseline number plus a premium for the downtime before and after. Is it an equally lousy project but I’ve already got enough work right now, so this would be an add-on? Quote something totally ridiculous, like 10x what I’d normally ask for; if they say yes then great, I’m eating well for a year; if they say no, I don’t feel any loss, and at least we’ve all established that my time is valuable.

    So, it’s all a bit hand-wavy, not unlike game design itself. Interested to see if others follow a similar method or if it’s just me.

    • “So, it’s all a bit hand-wavy, not unlike game design itself.”

      Exactly! Every project has so many new variables to consider once you understand the core of what it is you’re trying to create…I find the idea of a “catch all” fee or timeline really difficult to wrap my head around!

      I find it easier to work with a formula:

      Fee for this project = X(my operating expenses * Y)

      Y = specific project expenses

      X = estimated days * 3

      I multiply estimated days by 3 to account for early stage development ramp up time and the “WTF?!?” factor.

      “WTF?!?” being a concession to Murphy’s Law and the randomness of Real Life.

      I may not be one to model from though! I only take contract work if I absolutely have to – when I absolutely have to. I’ll continue working on my own stuff for as long as I can without taking on paid work.

      And I’ll drastically reduce my operating expenses before I take contract work!

      Thank you for the epic reply Ian! That was a valuable article in and of itself :)

  2. Eons ago it seems — well a decade ago really — I decided to do the whole freelance designer thing. Tough sell as I’ve always found designers and design to be undervalued by most game developers.

    Regardless, after much (marketing) effort I did manage to get at least one major studio in the Land of Oz interested in what I could offer them; and really, all you need is the one to make the right impression with and start your client base. It was all going well until they asked about pricing.

    I used “advice” given as part of the NEIS program where their tutor/consultant preached to us the value of “What do I want to make?” approach to what to charge. It was the wrong advice to take on, which I realised soon afterwards.

    You’d think that dealing with business people — and this studio was very much run by business people who ran it out of existence — that they would at least haggle and provide some kind of counter offer. I learned that is not the case ;).

    Not really sure how it would go if I tried it these days; my “profile” isn’t what it used to be.

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