Why you can’t call me cheap (anymore)
Four years ago, when I started out my business (or whenever it was—I always get fuzzy on the dates) I was charging all of $10 an hour (sometimes less, as was the case in my first job). Looking back, it’s no surprise, really, that by the end of my first solo year I was so broke. Technically, it was more than minimum wage, so I thought it would suffice. Of course, I forgot that around 50% of my time is unbillable, which has a rather dramatic effect, either on your “hourly” rate, or on the number of hours a week you need to work in order to be profitable.
There’s a maxim to pricing freelance work that goes something like this: you can have two of the following three elements: fast, cheap, and good. When I first started out, I tried to be all three. Naturally, there ended up being some compromise, most notably with respect to the “fast” and “good” elements of the equation. As I grew as a designer and a businessperson (it still sounds funny calling myself that), the scales shifted: my prices increased as the quality of my work and process increased.
For some time, I struggled with the idea of offering clients their choice between fast and cheap, but I’m coming to realize that this, too, is impractical on a larger scale—I’m so consistently busy that it simply doesn’t make sense for me to take on very many lower-paying gigs, regardless of how spread out their timelines may be. I really prefer working on projects with shorter timelines, anyway: the work-to-reward cycle is so much shorter (and thereby more gratifying), and a more rapid cycle of development means that the project remains fresher in my mind—I don’t forget details or need to re-learn anything as we progress. So, unless it’s a case ofhey-I-really-did-need-this-yesterday, in which case a priority placement and rapid-turnaround can be secured with a rush fee (although I’ve found most clients with urgent projects suddenly decide it can wait a little, after all, when they discover that it’ll cost more), “fast” is non-negotiable. Quality, naturally, is even less negotiable
As a result, my fees have been steadily increasing. A while ago, I switched to pricing projects using a flat rate based on an hourly model, with certain discounting for clients and projects I like (conversely, of course, there’s also a hidden “pain in the ass” fee that’s tacked on for work that’s going to drive me to the bottle). The per-project model makes me feel more comfortable about pricing negotiations, which I’ve always been terrible at, and as a result have an awful tendency to under-price myself.
Ooh, shiny.
I think my problem with properly pricing myself has always been an issue of perception: I still see myself, fundamentally, as a little girl who simply has no idea what’s going on. People are always surprised when I admit to this, which is gratifying—at least I don’t come off as naïve and insecure as I often feel!—and logically, I know that this isn’t how it is. I’m twenty-six, which means I’m officially Very Much a Grown-up; I’ve been running my own business for years and can still afford gorgeous shoes, which means I must have some sort of head for it; and my clients are happy with my work, which means that I’m producing good work. And so, every time I increase my prices, the logical part of my brain forcibly overrides the insecure, insane part.
Every time I increase my price in some way, I feel uncomfortable about it, but force myself to manage the discomfort. And every time, it pays off: I feel more valued, I feel happier in my work, and I can afford nicer shoes!
I think the shoe comparison works here: I used to buy $20 shoes. Now, my standards are higher: I won’t buy a pair that’s made of plastic, or that originally cost less than $100, simply because I realize that these will be of inferior quality. I no longer want to save money at the expense of quality, and this is a characteristic I’m looking for in my clients. I don’t want you to work with me because I’m cheap; I want you to work with me because I produce great work.
And ultimately, the higher my prices are, the better work I’ll be able to produce—both because I’ll be able to spend more time focusing on the minutia of the project, and because I’ll be able to spend more of my “spare” time developing my skills. While I’ll probably never be tackling million-dollar accounts (and because I keep my overhead low, I really don’t need to charge nearly as much as an agency would), I am no longer a low-cost solution. I’m a high-quality solution, and the more I charge, the better I’ll be.
Right now, I’m a pair of well-fitted leather Nine Wests. Eventually, I’ll be a pair of Louboutins. (And then I’ll be able to afford a pair!)
Apparently I can work the topic of shoes into every single subject ever. Eventually this website will stop pretending to be about design and will just go on and on, at length, about footwear. I’m beginning to believe I have a problem.
Tags: business, client relations, industry
I agree with every thing you say, except for one point: as you have become a more experienced designer, so you have also become faster designer. All those wonderful little tricks that you develop to save time, as well as all the mistakes that you no longer make (been there, done that) , means that you deliver the end product much earlier than before. This means that although your hourly rate has increased, the cost to the customer has not.
That’s both sort of true, and sort of not-true. My first website (that paid actual money) cost (I think) all of $300, though, and obviously I’m no longer charging that. So while I *have* become much faster and more efficient, my per-project cost has also increased substantially. I may do basic tasks faster now, but I also do more advanced tasks, which take more time. And some things (mockups, revisions, etc) simply don’t get faster.
Great Post Sarah.
I found myself falling into the same situation a few years back but no longer.
And just so you know, sometimes I still feel like I have no clue ‘what’s going on’ as well. ;)
I think everyone feels like that from time to time–and it’s that drive that keeps us trying to be better. It’s hard to be sure of your value, but in the client-relations case, I find it helps to just fake it–now everyone believes that I’m self-confident, which I feel isn’t entirely true.
Pricing is such a tricky issue, anyway–and honestly, I’d rather have people think I’m too expensive for them than to think I’m cheap. Somewhere on the internet there’s still a page up from when I was in school that reads “I’ll do pretty much anything for $6 an hour”. True then, not true now.