In this blog post, I am going to share some tips with you on pricing your freelance design work. In particular, I'm going to talk about how to charge your clients: offer them a daily rate, charge by the hour or offer a fix-priced package.
I want to make it clear from the beginning that this is not a guide about how much you should charge your clients. Instead, I wanted to share my thoughts on how and when to use the different pricing strategies.
Pricing Option 1: Charge your clients by the hour
I personally don't charge most of my clients by the hour. It'd typically do this when a client comes to me and I have never worked with them before, and they need something super small done. If something needs to be done really fast- the same day or the next day. Then, I 'd usually charge 20% more than I usually do. Also, as a rule of thumb- the task should take less than five hours to complete. If what a client asks for takes me more than five hours per day, then I usually charge by the day.
As a freelancer, it's really important to track your time. Not only to prove to your client how many hours you've worked on a project, but also to have a record for yourself. It's for your business. So you need to know how much on average a design task takes you to complete.
If you're doing UX work, there are things like doing user surveys that you can't really track. If you're conducting a user survey I'd charge by the day. Think about the situation and ask yourself: is charging by the hour suitable in this situation?
In my opinion, charging by the hour is mostly suitable for doing UI work, wireframes or quick changes. In this case, I always charge by the hour.
Disadvantages of charging clients by the hour
The actual disadvantage of charging by the hour is when the work takes you more hours than you quoted the client for. So, if you quoted 4 hours, but instead you ended up spending 8 hours on a task, that's to your disadvantage. I also think that it's unprofessional to go back to your client and ask for more money (unless you realized the task is indeed much more complicated than you were initially briefed for).
To sum it up ,charging by the hour should be only used for small projects where you know exactly how much time would it going to need in order to deliver the desired work. In all other situations, I believe any of the below pricing options are more suitable.
Pricing Option 2: Charge by the day (daily rate)
Amongst all pricing options for freelance designers, quoting a client a daily rates by far the most common one (at least in Germany). Usually, if a client is searching for a long-term collaboration they'll ask you for your daily rate. The reason for that is that the client actually needs to know how much a particular project is going to cost them upfront. Most projects in big corporations take anywhere between 3 months to 1.5 years. Therefore, they're usually willing to hire you mostly on a daily basis.
Disadvantages of charging by the day
As good as this sounds, this also comes with some disadvantages.
You may end up working more than eight hours a day.
So when you say "I charge by the day", the client expects you to work for at least 8 hours. But sometimes, especially if there's something like an update that needs to be pushed online or something that needs to get done really fast, you may end up working 10 hours a day instead. Of course, it's up to you to balance this out and ,for example, the next day you can work for 6 hours instead of 8.
Your work may be dependent on other team members.
The second disadvantage of having a daily rate is that if you're working in a team, you are dependent on other people. So, this means that you can't just get your work done and call it a day. Sometimes, you have to wait for other people to finish their work first, before you can start working on your task.
This is especially true if you are a UI designer on a team and you're working very closely with the UX designers who you are depending on. In this case, you have no other option but to wait until their work is done first. (Yes, you can work on other design tasks in the meantime, but sometimes there's one task that needs to get done on a particular day). Deadlines are pretty important for big corporations.
You might be interested in: 6 tips on how to negotiate a freelance rate with a low-budget client
Pricing Option 3: Offer a fixed price for a project
The last option is fixed pricing or package pricing. Unless I've worked with a client before, I don't usually offer package pricing for big projects (anything longer than 2 weeks).
Let's say a client needs a complete redesign and they do provide some information, but there is a lot of guesswork. If you quoted them a fixed price and if you have estimated that it will take you more than a month to complete the job, then chances are that something may come out - the client could change to scope, or they may have forgotten to tell you a "small" detail which may add some more time and complexity to the project. However, since you've already quoted a fixed prize is going to be very difficult for you to change that prize.
What do you do if the client demands a fix-priced quote?
If a client approaches me and tells me " I need a redesign of this product, but I need a fixed price, how much is that going to cost me?" I do two things.
First, I try to calculate how much time that's going to take me add a little bit of a buffer. I give them a quote which is usually around 30% higher than what I think it will take me, just to make sure that if something goes wrong, I'm on the safe side.
Second, I offer them a daily rate instead. I'd say: " I think that for this project I'm going to need 60 days. Therefore, my usual daily rate is $X. In total, this would add up to $Y. However, I prefer to get paid on a daily basis. " In this case the client is happy because they know approximately how much the project is going to cost and I'm happy because I know I can charge by the day.
In conclusion, fix-priced quotes are not suitable for Beginners or Junior designers, due to the high risk of unforeseeable changes. If you, however, are experienced, this may be a good opportunity to earn more money than by charging by the day.
Don't be afraid to explore different pricing alternatives and be aware of the disadvantages of each pricing option. Also, make sure you're always tracking your time. I use Toggle daily. Since I've been tracking my time for a while, I know exactly how much time I will need to prepare wireframes for one page. So, I can easily calculate how much time I'm going to spend on redesigning 10 pages.
I advise you is to always track your time and add some buffer.
I hope those tips were helpful and you can use them in your own freelance work. If you have any suggestions and comments, just post them below. Also you may be interested in subscribing to my YouTube channel.