How to price shit.
How to price shit.
I see a lot of questions on here about how to price things, and the answer is almost always “multiply your hourly rate by how long you think it’s going to take (with an added buffer).” and this isn’t necessarily wrong, you’re just leaving a LOT of money on the table. the examples below will use web design (because that’s what i’m most familiar with, but it should apply to a lot of other freelancers as well).
1. first, get prospects to come to you. this in and of itself deserves its own post, but i’m going to skip over it for the sake of this post. assume you have a good inbound sales funnel, or that you have a good network and people are asking *you* for work (this could be friends and family, old coworkers, random people who find you on the internet, etc etc). so lets pretend your uncle emails you and says “hey, i’m looking to get a new website for my law firm, can you do this for us?”
2. figure out your minimum. by doing exactly what everyone says: multiply your hourly rate by how long you think it’s going to take (with an added buffer). in the example above, it would be about $2k for a standard site (20hrs @ $100/hr).
3. then: **ASK THEM WHAT THEIR BUDGET IS**. this is it. just ask them how much they want to spend. you’ll be surprised at the numbers you get (and if it’s below your minimum you can either take it or not). usually i do this before getting on the phone to learn more about the project. in the example above you could say something like “hey, would love to work on this with you guys! can you send over examples of other sites you like the look and feel of? also, what’s your budget / timeline for everything?” you could also have some kind of on boarding form, that you have prospects fill out to learn more about their project. one of the items should be their budget and timeline. do NOT ask to jump on the phone until they’ve responded to this email. if you do, it’s too easy to avoid the question (although you could just ask again on the phone, but i’ve found, for whatever reason, that people don’t often disclose how much they want to spend on the phone). when they respond (as long as it’s over your minimum), you can just say “i can make that work” (like you’re doing them a favor).
obviously if they come back and ask how much it will cost, then go ahead and give them a quote. you should think of things in terms of the *value* you’re bringing to their business, though. you are NOT an employee. with websites, for example, if it costs a small law firm $10k to get a site built, that means they probably need 3-4 clients from that site for it to pay itself off. that’s a crazy small amount over the course of the website’s life.