Freelance Matters | Estimating and Billing
The most frequently asked question I get when it comes to freelancing is how to estimate and bill for work. I wish there was an easy formula but clearly there isn't. I've avoided answering this question because it's taken me years of trial and error to figure it out for myself and find out what works for me. But I'm finally going to share with you all how I handle estimating and billing.
ESTIMATING:
FLAT FEE VS. HOURLY
I've found that most designers work under a flat or hourly fee. I prefer flat fees - this means rather than charging per hour for my services I'm charging one established rate for the project. That way the client and I both know what to expect. However, I do have a disclaimer in my contract that should a project go beyond the scope of what was estimated or if we go through excessive revisions the client may be charged at an additional hourly rate.
WHAT SHOULD I CHARGE?
I get asked this all the time. Only you can put a monetary value on your experience, talent and time. It's tricky to be objective but I'll break it down:
The scope of the project: Even though I don't charge an hourly rate I think about things like "how long is this project going to take?" Again, my experience plays into knowing how long it takes me to design a logo, a 100-page book or a wedding invitation.
Experience: Because I've been in this field for 10+ years I'm probably going to charge more than a college grad right out of school. A client isn't just paying for my services - they're paying for everything that has lead up to me being the designer I am today. They're not just paying for a logo - they're paying for my expertise.
A friend told me this story - it goes like this: some guy went up to Picasso as he was enjoying dinner in a Paris cafe. The guy asks him to draw something on a napkin as a keepsake. Picasso does a quick little sketch, hands the man the napkin and says "That will be $6,000." The man was flabbergasted and exclaims "It took you 2 seconds to draw that!" Picasso responds "No, it took me 40 years."
Now, I'm not trying to compare myself to Picasso but this story always comes to mind when someone emails me asking for an estimate for a "really simple and easy" project.
Time:This is simple economics of supply and demand. The more in demand my services are the more expensive my rates are. If my schedule is more open I'll charge less in order to secure the work.
FAST, CHEAP AND GOOD: 
This is the ol' project management triangle. It's a good model to consider when estimating a project. The rule is that a client gets to pick two from this triangle. I personally never like to sacrifice "good" - if a client doesn't care about quality it means I'm not the designer for him.
ESTIMATING A TIMELINE:
Along with estimating a fee for the scope of a project I also give my clients a timeline that helps describe when certain tasks will be complete. This not only helps to keep the project moving forward but it also gives the client an idea of what the design process is like. Estimating a timeline goes hand-in-hand with my current workflow (see my to-do matters and project management posts).
NEGOTIATING:
Sometimes if I really want to work on a project I will tell a client upfront that I am open to adjusting an estimate as needed to fit their budget. Or I will work out a trade. Other times, the price is the price. If a client can't pay for my services that's okay - it just means we weren't a good fit for each other.
RESOURCES:
• I have a few trusted friends who are also designers that I will discuss actual dollar amounts with. I think it's important to discuss but it is also sensitive - so make sure you know and trust the people you discuss the value of your work with.
• A friend of mine gave me a book called Graphic Artist's Guild Handbook Pricing & Ethical Guidelines - my prices conflicted with some listed in the book but it's a great resource for project scopes, typical market value and contracts & terms. If you are a freelance designer buy this book.
BILLING:
I get asked a lot about billing and it's pretty easy. I hear a lot about designers being stiffed for their services and it's yet to happen to me. I like to credit my clients for being awesome stand-up folks but I also think the way I bill helps.
Deposit:
I request a 50% deposit up front unless it's from a client that has a billing department. But because I'm usually working with other freelancers or brides that's usually not the case. I also don't require deposits from repeat clients.
Balance Payment:
I get my final payment after the project is complete but BEFORE I deliver final files to a client or send something to print.
Payment Plans:
I know how it is to be on a tight budget so oftentimes I'll work out a payment plan with clients. Usually it's the estimate divided in thirds and paid out over 3 months.
Billing Tools:
I use Freshbooks to keep careful track of my expenses and income - I highly recommend this software. I also have an accountant who handles things like my taxes and tells me what I can and cannot write-off.
If you all have any more questions about estimating and billing please leave them in the comments section. If you are a freelancer I'd love to hear what works for you when it comes to estimating and billing.
Related posts:
• Freelance Matters | Project Management
• To-Do Matters
• Money Matters
I *love* that Picasso story. Experience matters and it shows in your work. Fantastic post, Kathleen!
Thank you, Erin!
I meant to mention the book you handed down to me as a resource - I'm going to update the post right now to include that.
These posts are so helpful! I really hope that I'm able to say I'm a freelancer soon. Thank you!
Though my line of work is slightly different, I cannot tell you how much I -along with I'm sure hundreds of other freelance and independent artists- appreciate you opening up your incredible cache of knowledge to share. There was actually a group of articles on Design Sponge that *really* helped me first starting out as well.. discussing price points for goods you've created using a few different formulas. of course having my old computer die meant losing those links haha..
Long story short.. you rock :) ps I might be coming to you again soon!!
I love the idea that time and money are so closely related. Thanks for posting this! I'm a photographer not a designer, but hoping laying out my timeline/post production schedule will give clients a better perspective of where the money goes!
Thank you so much for sharing! I always like hearing about how different designers handle this particular subject. I do have one question, when do you discuss print fees? Do you handle all of it yourself within a budget they give you? Just curious!
this is great kathleen. i've done a couple custom projects and it really is the hardest thing to estimate. i do wish i'd read this before a gigantic project i did this past winter. but then...you hadn't written it yet and i hadn't lived and learned!
This is an awesome read. The Picasso story is genius.
Great, helpful info. Thanks so much for sharing!
I'm so glad this post is helpful to you guys!
Erin - Good question. If I am working on a project that will requires printing (ie. wedding invitations) I include that in the cost of my estimate - usually lumped in with the design fee. Because my work is so custom oftentimes I will have to get a print estimate from my printer before giving the client my quote.
Now, I will often give my clients a few options for printing right off the bat - from letterpress (most expensive) to digital (budget friendly) and from there they can decide what they can afford.
I hope that helps!
Thanks so much for sharing! I feel like most people tend to be very secretive about this type of info (so they can be more competitive? I don't really know) and so it's refreshing to see people willing to share what's worked for them.
Lauren - I can understand most people being guarded or uncomfortable when it comes to sharing this kind of information and they have every right to be. I wouldn't necessarily say they are being secretive or have bad intent, though.
But I do think it's great to discuss - I've chosen to talk about it because I want other freelancers to find success in their own endeavors. There's enough work for all of us.
i'm a fan of flat fees, too (especially with my contractors). generally easier for everyone.
kelly
Kelly - I'm glad to see this goes beyond graphic design & photography and also applies to your line of work in architecture & real estate.
Totally agree with everything you've said here. But one other thing...
When estimating, I feel like you have to think about not only the time it will take you, but also the SPACE it will take up in your brain. If it's a really challenging (or intense or obnoxious) project/client, it is going to feel like you're spending 10x more time on it. There must be a premium on something that wakes me up in a cold sweat.
Which brings me to my question: how do you handle rush fees? If someone wants something faster than you're comfortable with, do you say no, or do you add a % increase to the estimate?
Angie - there is a reason I stopped doing wedding invitations. ;)
I have had a few rush jobs - so the triangle dictates that I will do it "good" and I will do it fast. But it's not going to be cheap. I don't have a formula for rush fees because I don't really have a formula for estimating. I just think "Will I do this for $$$ amount? What about just $$?" I slide the scale until I feel out what is fair and appropriate. What I'm willing to work for and what the client is willing to pay.
I am completely comfortable saying no to most jobs - especially rush ones that will do nothing for my portfolio. Unless they will afford me a vacation or something insane like that - then I'm equally okay with saying yes, knocking it out and packing my bags for the beach.
But no amount of money is worth waking up in a cold sweat.
Sorry - I feel like that was an incoherent answer to your question... It's tricky!
Your "Matters" posts are awesome, this one especially. I'm not in freelancing or a creative field, but everything you wrote is also applicable to engineering.
Kathleen, this post is amazing! Looking at Freshbooks now.
Yes that helps a lot! I am also a fan of flat fees. I don't know why so many designers are against it. To me, it keeps you more accountable for the time you are putting in.
Emahlee - I'm so glad to hear this method for estimating spans beyond just design or photography. Jeremy is an engineer and I'm always discussing with him ways to approach the administrative processes in my business, including estimating - he's often able to look at it from a different angle which is helpful.
Erin - I feel like I should clarify and expand on the answer to your question. Basically, I always wrap my print fees in with my design fees. I find that itemizing out these costs (which I used to do in the beginning) can confuse clients - often they don't understand that they're paying for the materials and supplies as well as my talent and time. So it's easier to just wrap it all in one.
Thank you for this post. My husband is a photographer with his own studio and in this day and age of digital photography people seem to think it's so simple and they "could do it themselves" so a photographer should do it for cheap. People forget that staging, posing and lighting are an art and it can take hours to get the right combination for the best possible shot. Never mind post photo processing time.
Anyone can do "happy snaps" but not anyone can take photographs.
I loved reading this! I, too, sometimes don't know how to answer those questions, and while it did take me a long time to figure things out (and I still am!), I'm always more than willing to help out fellow artists with what has worked for me, and why. Why reinvent the circle? Not that the way I or you do things is the "right way," but the guidance is invaluable.
Thank you!
Great post Kathleen, as always, keep up the amazing design work!
Great post Kathleen, as always, keep up the great design work!
ahh thanks for sharing this!! it's one of those things i want to ask people, but never really sure if it's appropriate. i love love the picasso story.
i do a similar billing process - 1/2 deposit due up front and final payment due once everything has been approved, before it goes to print or is delivered. sometimes i will allow payment upon delivery. just depends on the situation.
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