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HOW TO SET YOUR FREELANCE RATES - A GUIDE FOR FREELANCERS & CONSULTANTSThere are many factors which business owners must consider on a daily basis as it relates to the running of their business. Things such as how to find good help, where to acquire supplies and how much to pay one’s employees are all pertinent matters which must be addressed. There are a few ways to go about figuring out your rates when it comes to how much to charge the customers.Freelance Pricing Part 3 - Quoting To Win!
by Rachel Goldstein
Last week we looked at setting hourly freelance rates. Now, let's see how they can be applied to pitching for work.
Some people call it a bid and others call it a quote or proposal. But no matter what you call this process, make sure that the document is concise, powerful, and easy to understand.
Why? Because preparing a quote is an integral part of a freelancer's business and must be mastered in order to land work. Consider the proposal as a final step of the sales process. Would you buy a computer if you hadn’t read all the sales copy, and didn’t know how much it would cost? Of course not. Use the proposal to introduce yourself, sell your services, and focus the client's eye on you.
The first rule of thumb is never to bid blind.
In order to obtain all the necessary information from your client, create a standard form that you can hand out at initial contact. Take a look at this form to see the sorts of questions I ask. Don't feel like you have to use this form -- use your creativity to develop a form that works best for you. You might want to give a form like this to your potential client:
It’s generally unprofessional to bid on the spot. Instead, take all the information you’ve gathered back to your office to create an all-inclusive estimate. If you bid immediately, you’ll usually seem over-eager and unprofessional. However, this isn't always true. There are some situations where you can bid immediately, such as:
Bidding online at a site such as elance.com or allfreelancework.com.These sites are built on the idea of bidding on jobs, so obviously this is what you must do.
When you sense that a bid is merely a formality.
However, if you do bid on the spot, make sure to slightly overbid to compensate for anything that you might have overlooked. Make sure that the client understands that this is just a preliminary bid, and that when all materials are reviewed, a formal quotation will be sent to them.
Now that you have all the information related to the project, it’s time to start the estimation process. It takes time and discipline to calculate the figures accurately. The most effective way to prepare an accurate estimate is to map out the entire project and all of its components in a Flow Chart. Although, at first glance, this might seem to be a waste of time, believe me when I say that this is the best way to get the most accurate estimate. You’ll find once you gain some experience that you can bypass this step with simple projects. However, with complicated projects, this step will always be necessary to obtain an accurate quote.
Use a Flow Chart to Estimate Time & Resources Needed for a Freelance Project
In order to estimate the time and resources you’ll spend on a project, you’ll need to visualize each stage of the job. In order to visualize a project in its entirety it is necessary to bring all the information together in a concise way in your flow chart. In order for your estimate to be accurate, you will need to make sure that the chart is comprehensive -– have someone else review it if you can. Here’s a sample project flow chart.
Now that you’ve completed your Flow Chart, review the information.
Are you able to visualize how much time each stage of the project is going to take? If you’re still unsure, ask yourself what steps are involved in each phase of the project. I can easily break down each stage of the Flow Chart into 10 different stages. Then, once you’re confident of your estimation of the time and resources involved in each phase, take a look at this estimation worksheet.
Review your Flow Chart carefully and write the amount of hours you’ve estimated for each stage of the project into the appropriate categories on the estimation worksheet.
If you aren't sure how many hours should go in specific categories, consider raising your estimated hours a little (it’s better to make a mistake in your favor than the client’s, don't you agree?). Multiply the number of hours by your hourly rate to calculate your total production time.
Next: what supplies or services will you need to complete the project?
Will you need to mail anything? Will you need to print anything? Make sure to mark up these items by 15% or more -- buying supplies, going to the post office, and other small tasks all take time out of your day, and you’ll need to be compensated for this.
Also, review your Flow Chart to see whether you’ll need to outsource any work to a freelancer?
If you do, you’ll need to contact a freelancer and request their bid – once you have this, you’ll be able to complete your bid. It’s difficult to work with other freelancers on a project, and for this reason, I’d mark up a freelancer's bid by at least 20% for the extra time that communicating with, and managing the contractor it is going to take. Now add up all the figures to calculate the total estimation for the project. Does the number you came up with look right to you? If not, review your estimation sheet to see what could be amiss.
Write Your Freelance Proposal for Your Client
Now that you’ve completed the estimation worksheet, you’re ready to begin to write your proposal. Keep in mind that a good proposal demonstrates your complete understanding of the client's needs, your ability to satisfy those needs, and the action that you are going to take in order to achieve those needs.
Every Freelance proposal should contain these elements:
A Cover LetterThe Proposal
Any Supporting Documentation
Cover Letter
THE COVER LETTER
Why you’re sending the proposal
What the proposal is for
What will be done next and when
Any differences between what the client asked for, and what you have proposed
PROPOSAL
The proposal is the meat and potatoes of the package. Aim for a concise yet powerful and persuasive document. Make sure your proposal is easy to understand, is arranged in a logical order, and answers these questions:
What will you do?Why will you do it this way?
How will you do it?
How much will you do it for?
When will you do it?
Every proposal should begin with an introductory paragraph. Summarize any information that has already been discussed in conversations or correspondence with the client, to convey that you understand the client's needs and wants. Next, summarize what the proposal will include.
The next few paragraphs will contain the solid content of the proposal. Include:
A description of the actions you’ll take in order to meet the needs of the client, and what the outcome of this will be.
An explanation of your skills and talents (as appropriate to the particular job), and why you’re perfect for this gig.
An outline of the total cost of the project.
An estimation of your time estimates for the project.
Information on how you’d like to be paid, and what payment schedule you’d prefer.
Supporting Documentation
You might want to send some supporting documents along with the proposal package, such as:
Your resume
Information about your business
Recent client list and testimonials
Examples of projects
Freelance Project Proposal Quotation Worksheet
Now that you’re ready to write the proposal, you might want to consider "dumbing it down" a little. Us computer geeks mightn't realize it, but not everyone knows what “cgi” or “asp” is. If you think a particular word might be over your client's head, don't use it, or explain what it means (but be sure not to insult your client's intelligence!).
Look at things from the client's perspective. You might even want to put yourself in his shoes and write a proposal that you think he would like to hear, however, never lie. It might be tempting to embellish your skills, talents, education, or experience, but this is illegal, as well as immoral.
Try to use a conversational yet professional tone in your proposal. Translate your services clearly into client benefits. All potential clients want to hear how you can raise their profit margin or cut the cost of something here or there. Take this approach throughout your proposal. Not only will it make you look knowledgeable, but it will also help justify in their minds that they need to hire you.
After you’ve written the proposal, review it carefully.
Have you met all the criteria that the client will be sure to look for?
Have you checked for spelling and grammatical mistakes?
Is the proposal clear and concise?
Have you addressed all major concerns?
Have you outlined all the major benefits of hiring you?
Is everything that you have written accurate?
Now, to help you begin work on your pitch, why not take a look at the following proposal template...
To finish, here’s an example of a proposal, which you can easily develop to your own requirements. Good luck with your next pitch!
FREELANCE PROJECT PROPOSAL TEMPLATE
========================
Deezin Studios
Jane Smith
999 Ithaca Park
Ft. Lauderdale, FL 33066
305-999-999
email@email.comJanuary 01, 2002
Mr. Joe Jones
999 Hunt Drive
Ft. Lauderdale, FL 33066
306-999-999
email2@email.comDear Mr. Jones,
After our phone conversation, I have researched all aspects of the Website that you are interested in developing. I am happy to say that I have come up with a solution that will not only improve your customer retention, but will also raise your profit level. The site I’ve proposed will be the only Website out there that sells this product, and it will allow customers to buy your product for a lower price than they’d pay at your competitor's stores. Below you will find my ideas for developing this innovative Website.
With 5 years’ experience as a programmer, I have the capabilities to provide you with the requested Web development work. I can complete this project well under your budget of $5000, and in less time then you have scheduled. Also, I will develop your online store with the latest innovative software. For just $200, we will be able to have customized control of this software, saving you at least $3000. With the saved funds, we will be able to market your site to the full extent that you described at our first meeting.
In summary, I’ve found a way to save you $3000. I will be able to complete the backend of the Website, Web graphics, design, marketing, and installation of the product software for $4200. I will be able to start the project on January 09, 2002 and I will have the project completed no later than February 28, 2002. If you’re interested, please feel free to contact me. I look forward to hearing from you.
Best Regards,
Jane Smith
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