Bill_Cullen_The_Price_Is_Right_1963

To ask for payment for your work, it is imperative that you believe that the value you provide is worth paying for.  Be clear: that is a very different belief from “I need the money.” If you have clarity about the value that you bring to the table and you have identified the buyer who needs just that, then you will have leapt the hardest hurdles.

But how to figure a price for doing what you love? Here are some ideas to get  you thinking about this in a relatively rational manner.

You should have a sense of what other good/equivalent talent is charging but do not get caught up with the fear that someone will do it for less than you and you won’t get the gig.  However low you go, there will always be someone who will do it for less, so don’t dwell on that.

So should you charge by time or by project?  Think about the client’s POV and make it easy for her to agree.

In most cases where there is a clear job specification the client really only wants to know what the cost of the finished product will be, whether it is a consultant’s report or a design or a fabrication or an ad or a photograph. Be ready to give her a breakdown to show that there is a rationale, and to keep the procurement folk happy; but she will really only care about the bottom line. No vagueness – no surprises – that will feel good to her.

Of course, if she just wants to have your talents on tap, open-ended, and there is no clear project scope, then you will have to define a rate based on time spent.  If you are a speedy genius then a high rate should reflect that value.

So how much should you charge?  Critically this has to make sense to you so that you can charge with conviction. Think in detail through all the steps of how you will do the job and itemize how many hours each step will take you.  Write it down – a spreadsheet or estimating program can work for this. Protect yourself from surprises by adding in a pad of maybe 10%.

Try out a few hourly rates and multiply them by the total number of hours you came up with.  See how they look and how you feel about them to settle on the one that makes you feel comfortable, respected, appropriately compensated.  Consider settling on a rate that’s, say, 25% higher than your instinct tells you.

Look at this proposed hourly rate and test it against your needs. Multiply the rate by 20 (hours a week) and then again by 30 (weeks per year) to see if you can thrive over the long haul when being paid for an average of 20 hours a week for thirty weeks in a year.  Adjust accordingly.

Itemize any out of pockets that you have to pay for and add in a handling fee for any that you will be passing on the client.  Floating the job and managing vendors has real value too.

But you are not done yet, especially if your work is idea/concept based.  That genius idea could come to you in just one hour of looking at the problem – so there has to be a value placed on all that went into your life to date that enabled you to reach this perfect idea. So if you feel that you are bringing a big creative added value to the project, and not just going through the motions, consider putting a creative fee on top of the hourlies.  It’s not about whether you are worth it, it’s about whether your contribution is worth it.

Now look at the total and see if you have the cojones to present that to the client. If you believe it is fair and right – this should not be hard. If you think you just made it up out of whole cloth, then you will have a harder time presenting it.  But you didn’t just make it up – you had a rationale behind all the components that you added up.  So if they balk you can explain.

If necessary you can trim – perhaps adjust the scope – perhaps separate the project into stages – find out what approach would make the client comfortable.  The magic words that I learned from one very smart boss:  “What do you think would be fair?  I just want to be fair.”

If you both really want this job to happen, then between you, you can find the fair way. If you are impossibly far apart and there is no good reason to take the job, then walk away and move right on to the other opportunities you have in the pipeline.

 

Photo:  Bill Cullen hosted The Price is Right from 1956 – 1965




More on the pollock*spark blog: