Nikola Tesla visited Henry Ford at his factory, which was having a design difficulty. Ford asked Tesla if he could help identify the problem area. Tesla looked at the designs and made a small “x” in chalk. Ford was thrilled and told him to send an invoice.
The bill arrived, for $10,000. Ford asked for a breakdown. Tesla sent a second invoice indicating a $1 charge for marking the plans and $9,999 for knowing where to put the mark.
While that’s a cute joke and urban legend, it’s also something that freelancers face all the time. We do work that may be quick and easy–but it’s taken years of education, self-education, and practice to develop these skills.
When You Become Faster At Your Work
There are three options when faced with this situation.
- Change nothing, get paid less.
- Charge more hourly for this kind of work.
- Set a minimum price and charge at your usual hourly rate for anything beyond that.
Option one may feel fair, especially to women who’ve been taught to undervalue our work. But the work you’re doing is no more or less valuable to clients than it was when you were spending longer on it. If you weren’t a freelancer and were instead employed at a traditional company, you’d likely transition to a higher pay-grade as you became more experienced, which brings us to #2.
Option two works, and may be good if you’re only doing a few types of work. For example, if you’re a Thesis guru, you may charge $50/hour for Thesis work and $40/hour for something else. The problem is that if you have a number of different areas, it becomes hard to keep track of that–especially if the client needs work done in more than one field.
Option three involves first setting a fair hourly rate for your average work. Maybe setting a couple if there are some dramatic differences in the type of work you’re doing. Next, set a minimum price for the job at hand–such as $25. Then present both numbers to the client, e.g.: $50/hour with a $30 minimum.
Setting a Minimum Freelance Project Price
You are charging for:
- Taking the time to learn the underlying skills.
- Taking the time to learn this specific task.
- Taking the time to execute it.
This doesn’t mean setting some exorbitant price to take into account all the work you’ve ever done leading up to this point. Either consider your level of expertise and combine what seems like a fair hourly wage with a time estimate, or use what you’ve charged before for such work and found client to think an acceptable market price.
The Advantage of Minimum Price + Hourly
The biggest advantage of taking option #3 and setting a minimum price and then an hourly one is that you don’t undersell yourself and your skills. I’m still not as good at charging as I’d like to be, but when I use this method it helps me keep from doing more work (for free) than I’d included in my original estimate for the job.
Setting this up at the beginning makes a difference in how I feel (and I think how the client feels) if the job does take more time than the minimum. Instead of being in a position where I have to tell the client that I mis-priced and the client was expecting to pay X, the client (should be) thinking of a number as the minimum they’ll have to pay, but still have a framework for how it’ll be priced.
If you’re a freelancer, how do you price your work? If you hire freelancers, what method do you like them to use in pricing?