Hi all, this is a follow up to a post I made not long ago about factors that we often forget to factor in when we price projects. See that post here: Factors To Consider When Pricing For A Project

Excerpt:

We all remember to bill for the design work we do and the skills required and for any obvious special purchases, i.e CMS or E-Commerce softwares. Even as freelancers we should have a premium (allbeit alot smaller than an agency premium) top of this that accounts for us being a business. However there are some factors you shouldn’t forget to account for

I decided to talk about other factors that go into our pricing on a project and I compiled some more factors I mention below… As well as calendar time, minute time and expenses which I mentioned in my previous post..

Ensure I am Competitive
Whenever pricing a project it’s important to consider what everybody else is charging. Competing against agencies and your fellow freelancers; ensures that you at least have a ball park figure to maybe act as the starting block for your prices and it will help you gauge the impact of factors such as expertise have on the fee.

How do you know what other freelancers are charging? – Ask. Whether this is within our community itself on forums / twitter etc – we are lucky in that our field is blessed with a helpful sentiment. No avail? In the beginning, I may have pretended to be a client and emailed freelancers and agencies for quotes for dummy jobs! Now your wondering if the jobs that seem to disappear after you have quoted are just designers checking your prices? lol

Any other factors you think would fit in here as things we think about when pricing a project?

Related Posts:

• May 11, 2010 -- How to Avoid Over Working Yourself As A Freelancer (5)
• December 13, 2009 -- Long Term Freelancing Success – Part 2 – Marketing (10)
• November 3, 2009 -- Your Quote is too high! – Charging/Negotiating for design work (7)
• June 8, 2009 -- Freelance Contracts (41)
• April 29, 2009 -- 7 Things To Consider When Starting As A Freelance Designer (4)
• April 12, 2009 -- Do you need a design degree to freelance? (17)

When starting out, when your down in the trenches fighting against the colossal agencies and your fellow freelancing kin, do you have to be a good sales person in order to secure projects?

Do you feel freelancers need to be sales orientated? Are you a good sales person?

The internet has given clients information at their fingertips, many are more informed about the process / more business savvy – often seeking multiple quotes from here there and everywhere. As such, if they have not selected you alone because of your immense talent that no other mere mortal possesses – what is the deciding factor? I concur… it is you!

Pitching and selling yourself, brand or service is not something that comes easily to many and as such, are they at a disadvantage? Yes! Few are we that can sit back and clients are banging down our doors to work with us under any conditions – as such there are many key things you can look at in order to convert your enquiries into sales and as such clinch that all important deal!

Furthermore, may freelancer’s survive by recruiting much of their business from referrals and as such they don’t develop a method, technique or familiarity with having to sell themselves to a client. In the beginning, for myself this lead to accomplished clients spotting a novice and almost convincing me to charge less, pushing the feeling that they were doing me a favour…

For growth, for a freelancer to be successful, they must over time become a formidable sales force – pushing themeselves and their services to the top of the pack so that they stand out in the crowd.

Do you feel freelancers need to be sales orientated? Are you a good sales person?

Related Posts:

• July 25, 2010 -- Maintaining Business Standards As A Freelancer (3)
• February 21, 2010 -- Don’t be another washed up freelancer – The Freelance Lifecycle (1)
• November 25, 2009 -- Factors To Consider When Pricing For A Project (6)
• November 19, 2009 -- Should You Find a Niche To Stand Out From The Pack? (3)
• November 13, 2009 -- Competing Against The Agency – The Freelancer’s Epic Battle (21)
• November 6, 2009 -- When Your Client Wants To Become The Designer (0)

One of the things I suffered from in the beginning when pricing clients is often forgetting to bill for all aspects of a project and thus half way through I was feeling cheated or clients were commenting on how remarkably low my prices where in comparison to other quotes they had received.

We all remember to bill for the design work we do and the skills required and for any obvious special purchases, i.e CMS or E-Commerce softwares. Even as freelancers we should have a premium (allbeit alot smaller than an agency premium) top of this that accounts for us being a business. However there are some factors you shouldn’t forget to account for.

Expenses

If you are spending money in order to facilitate a project ; this is money coming out of your own pocket and it shouldn’t. There are many expenses I feel a designer should think about when billing clients. Whether s/he wants to account for 100% of the expense or a small percentage, it should be factored in. Examples could include:

• Travel to and from meetings and liasons ( petrol / parking / train fee / buss fee / cabs )
• Telephone expenditure. Not  a biggie for local clients; but a black hole for money when dealing with international clients that require phone time.
• Paper samples / swatches / test-prints

These little expenses can mount up and are eating into how much you are making. Decreasing how much is eaten is up to you!

Calendar Time

If a project would take  6 weeks to complete comfortably with everything accounted for and no inconvenience to yourself; there is no way the charge for that project should be the same, if the client requires the same specification delivered in 3 weeks. As this will cause you inconvenience , require you to go into late night coffee mode and you may have to delay other projects as a result. therefore, projects with shorter / longer deadlines should be priced accordingly.

Factoring in Your Credentials

Your expertise, your authority or your fame is a nice way to add a premium to a fee. If you are sort after in your field, emphasising this in your marketing can help you charge for that fact. Exclusivity, is one of the best ways to moving towards high price points.

Minute Time

Your time is valuable and this goes beyond the exact number of hours you spend having to design  work on a project. For instance, take into account hours you will have to spend researching a project. This could include the following for example:

• trips to printer’s to test paper stock and proofs
• domain and keyword research
• competition evaluation and comparison

All of this is eating up time that you could be using to earn moola somewhere else or complete other tasks. Thus you should factor it into your billing.

Any more factors you think we should think about?

Related Posts:

• November 19, 2009 -- Should You Find a Niche To Stand Out From The Pack? (3)
• November 6, 2009 -- When Your Client Wants To Become The Designer (0)
• July 25, 2010 -- Maintaining Business Standards As A Freelancer (3)
• January 4, 2010 -- Referrals – Freelancing Dreams (3)
• December 2, 2009 -- Does a successful freelancer have to be a good sales person? (6)
• December 1, 2009 -- General Rules For Doing Free Freelance Work (6)

At some point you will come face to face with the worst type of client. The client who despite numerous attempts on your behalf, is refusing to pay outstanding fees on a project.

As a business you will at some point have to go after a non-paying client, and as such should be prepared for the fight; or at least be prepared to issue the threat of a fight. Personal / Business time lengths are differential between entities but as a general rule you will know when this time sets upon you or is vast approaching when:

• Any invoice is over 60 days old
• At least four attempts at contact via e-mail or phone have gone unasnwered
• A client tells you that they are not going to pay (always the easiest to identify)
• When material you have created / sold is used before payment is settled against terms of contract
• Wishy-washy promises start being issued of further work so settlement should be delayed until they are complete
• A personal favourite: ‘payment has been sent, have you not received it?’

As an efficient and well prepared business you should have a method / set of rules in place for this very eventuality. You cannot expect a client to be prompt and timely with their end, if you are not the same with yours! The best way to address this hyperthetical situation is from the beginning…

1) First invoice not paid

I am not going to go into why you should have contracts, but simply this event is one of many in favour of working with contracts. One key point is having contracts in place that stipulate to the client how quickly they are expected to pay invoices once they have been issued. This immediately gives you a date to send your first reminder. Typically for us this may be between one and two working weeks. At this stage, our eyebrows are far from raised; there is a multitude of reasons why payment may not have been received. (Benefit of the doubt is given) For us, this is simply a follow-up email with the invoice attached as a PDF.
Example:

Dear ************,

Hope you are well. We are e-mailing in regard to ( project / reference number ) and its respective invoice sent on (date). As discussed, the project has now been completed and the invoice to the amount of (£ FEE ) is now overdue as per the agreed schedule of payment. There are a number of payments methods available as detailed in the attachment.

We look forward to hearing from you and receiving payment promptly,

Kind Regards,

(SIGNATURE)

2) E-mail not answered / Payment not received
At this point for us, payment is roughly 3 working weeks late and the client has been out of contact for approximately a fortnight. At this point eyebrows are raised. Lack of contact is an alarm bell in itself. This is where our tone in following contact needs to take on a certain level of seriousness. The first invoice at this point is followed by a phone call to enquire as per the status of payment and when it can be expected to be received. After this phone call, it is good practice to shoot the client an e-mail summarising your phone call and any agreements you may have come to, as well as re-issuing any amended invoice timescales etc. If unable to reach the client via telephone or they are uncooperative then an e-mail to the following extent is sent; as well as a letter to the same effect. Remember, your a business and as such you need to conduct yourself as one, being ‘nice’ at this point isn’t a requirement; being professional is:

Example:

Dear ************,

We are e-mailing in regard to ( project / reference number ) and its respective invoice sent on (date). As discussed, the project has now been completed and the invoice to the amount of (£ FEE ) is now considerably overdue as per the agreed schedule of payment within contract (ref number). The commissioned works were completed and delivered in full on the (DATE, 2009), and its payment has now been overdue by (TIME) days at the time of this emails composure. The bill of (£ FEE) was neither settled within ( TIMESCALE) as contracted and numerous attempts to contact you have been unsuccessful.

As per our normal practices, we must at this point (in accordance with our terms and conditions) request payment within (TIME SCALE) ( 7 days) of this contact. If payment is not received by (TIME, DATE) we will deem you in breach of contract and will take appropriate action. Detailed within our contract, we also feel it important to remind you that until payment is settled in full, all works are the full legal intellectual property of (COMPANY).

There are a number of payments methods available as detailed in the attachment. Please do not hesitate to get in touch via (CONTACT DETAILS).

We look forward to hearing from you and receiving payment promptly,

Kind Regards,

(SIGNATURE)

3) E-mail / Letter not answered / Payment not received

At this point you should revoke the use of any systems you have made available to the client if possible. (e.g a website). At this point you have several options. Our personal normal action after this is to simply to refer the matter to our solicitor. Solicitors will issue the following contact at a fee ( around £30.00 GBP ) per correspondence and keep us informed accordingly. Why get the law involved? Psychological warfare! Many people / small businesses will magically arise from the shadows and a ‘troublesome email server’ or an ‘office move’ when they receive a headed; formal; debt notification letter from a solicitor. One of these wonderful gems, contains diplomatically worded threat as to the consequences of further non-payment and absence of contact; it also establishes a deadline beyond which this threat will be acted upon. it is also advisable to discuss the matter in full with your solicitor, as in reality you do not want to word your letter threatening full civil action in regard to a bill of £1.00 GBP. Extreme example but you get the point. It often also states how the fee is likely to increase with interest / debt recovery fees should time pass by a further set time limit. You can also, simply send a similar letter yourself but we feel the fee is worthit. We also copy and type the letter as an e-mail to the same effect to the client.

4) Contact and Resolution / ‘Walking the walk’

At this point, fortunately for us in the two honest occasions this has happened, the client has paid in full with an e-mail summarising their ‘circumstances’ within days of receiving the solicitors lawyer. The key for us, was simply responding in a professional manner:

Example:

Dear ************,

Hope you are well. We are happy to confirm receipt of payment for (project / ref number) and its invoice (number / reference). Please find attached the statement of accounts and receipt of payment. (Relevant files / services will be re-instated/sent) to you within 24 hours. We wish you the best in your further endeavors and would hope you would not hesitate to contact us in the future for your design projects.

Kind Regards,

(SIGNATURE)

However, not everyone’s tale ends in a fairytale happily ever after. The client may offer to compromise, in which case you will have to decide, in consultation with your solicitor upon the terms of that compromise. Sometimes, settlement for an agreed fee is the most economical and beneficial resolution to the matter.

If after setting upon the following process, and going out of your way to accommodate your client, then you have to decide if you wish to pursue the matter and carry out your diplomatically worded threats….

How do you deal with non-paying clients?

Related Posts:

• January 4, 2010 -- Referrals – Freelancing Dreams (3)
• December 7, 2009 -- What Should You Include In A Design Project Proposal? (5)
• November 25, 2009 -- Factors To Consider When Pricing For A Project (6)
• November 11, 2009 -- 10 Ways To Score and Evaluate A Client (6)
• November 6, 2009 -- When Your Client Wants To Become The Designer (0)
• November 5, 2009 -- 11 Articles To Stop You Making Designer Mistakes (7)

It is inevitable and if it hasn’t happened to yourself yet, it is not far round the corner especially in the economic times were in. Quite often, a potential client will challenge you on your pricing. i.e your rate per hour, total price etc

The first time it happened to us, we were hit with this painful urge to almost apologise, back-track and revise our quote…. Don’t. Handling a pricing objection well will help present yourself as an experienced professional.

When pricing and developing a quote, it is self-defeating to believe that it will be too high. If a client challenges you, the trick is to act genuinely surprised but not to apologize or automatically decrease your fee. No other company would do this! The sad truth, is many people simply do not know what quality professional design services should cost them or their business and are often hit with a quote they never envisaged.

Firstly, respond to the client reassuringly and explain why you have costed the works as you have. (time involved, skills required, your expertise, general industry reasons as to why you are a design professional )

Secondly,; You should impart the feeling that with your experience, level of expertise – the client is getting value for money and that your pricing is actually very competitive.

Thirdly, those wonderful little marketing and mind game sentences that serve many so well. Sentences like:

‘If you hunt around, I am sure you will find it hard to find similar quality and level of work for cheaper’

By saying something like this, you put the ball back on their court and subtly ask them in a friendly way to think again. Cost – benefit analysis. Introduce the idea that low price is not as important as good work and high value.

‘My price may seem high, but you’ll find I am very easy to work with and highly dependable’

Emphasise the value of less physical benefits that you can offer and how they should factor into a client decision.

If all else fails, and the client will not budge or they simply cannot afford your quote. You then must make the decision whether to pass up work or set into motion the unfortunate:

‘Lets see what I can do to meet your budget’

This is a position we have all found ourselves in right from day one. Be attentive, be helpful. Let the client know that you are going to take some time to see what can be done for them. Respond by describing how you can maybe offer a less expensive option that still delivers near enough the same result if done correctly. ( 2 colour printing vs 4 colour printing / innovative brochure packaging etc ).

If the client, does not wish to have any change to their specification and you still wish to take the job on, emphasise that doing the job at the lower price than normal is a one-off exception and it is almost certainly not a trend for projects to come. Give a blanket reason for your kindness:

- Interested in your project / cause
- Filling up your portfolio with this type of work

Te key is never to appear that you are just desperate for work!

Reference: The Business Side of Creativity by Cameron S.Foote

Related Posts:

• December 7, 2009 -- What Should You Include In A Design Project Proposal? (5)
• December 2, 2009 -- Does a successful freelancer have to be a good sales person? (6)
• November 25, 2009 -- Factors To Consider When Pricing For A Project (6)
• November 9, 2009 -- How To Deal with Non-Paying Clients (29)
• November 6, 2009 -- When Your Client Wants To Become The Designer (0)
• April 6, 2009 -- When Meeting A Client as a freelance designer… (8)

Hi all,

While surfing forums and the like found a great free contract resource , over at WDF.

This is a contract that I came up with several years ago, with the help of a lawyer [personal friend]. I didn’t want anything too technical or full of legal speak. Just wanted something simple, straightforward, that made sense and didn’t confuse or intimidate in any way. So there are no major legal terms in the document at all…it simply does what it’s meant to – lay out the information that client has supplied [the brief], say what you’re going to do for them and how much your going to charge and what deadlines there are…

A few pointers though:

1. When the terms ‘client’, ‘job’ or ‘your company name’ appear in your text always use a capital letter ‘Client’ – ‘Job’ – ‘Eskymo’ as these are terms that have been defined at the beginning of the document and this is the proper way to refer to things.

2. I generally send clients a contract via email – I export the document as a PDF [so they can't edit it in anyway] and email it to them. They then have the option of printing it out and signing it and sending it back to me via the post, or they can ‘digitally’ sign it and email it back, or I just ask them to respond to the email with a formal acceptance of the contract – I then print out this email and keep it on file. Always make sure you get an agreement either in writing or an email – an agreement in a telephone conversation is no good as there is no way of referring back to it.

Contract, PDF download

Contract, MS Office Download:

Contract, Open Office Download:

Don’t forget to pop on over to the Web Designer Forums for more great resources. As a web designer and logo designer their forum’s are a great place for advice.

Related Posts:

• March 15, 2010 -- 50 Freely Available Professional Fonts For Your Designs (34)
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• January 6, 2010 -- 5 Free Web Design Proposal Contracts (0)
• December 31, 2009 -- Factors To Consider When Pricing A Project – Part 2 (4)
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Many just pick up and go when entering the freelancing world, but to ensure things go smoothly for everybody involved, there are a few considerations. Setting up a small studio, office or dedicated work area within your household; keeping the font police off your heels, invoicing and paying correct taxes etc are vital. Being a freelancer is more than just being an artist, it requires an accomplished business knowledge to become successful. Many things that we overlooked are listed below, to help you in case you have aswell, or a re just beginning:

1) Do everything legal

- straight away!
Register your business with your local tax office. More than often, you are likely to need to register yourself as self-employed or a s a sole trader and will have to pay taxes on your profits if your earning above a certain threshold. Sort this out quickly!

2) Employ an accountant

We were lucky enough to have a family friend who is an accountant; who we grabbed early on at a discounted fee, but either way we recommend getting one. Best practice is to ask around for recommendations. Find one who has some knowledge of the industry; they can advise on the beauty of tax-deductable items, VAT etc

3) Invoicing

Invoice for all your work as soon as it is completed. Make sure your invoice includes all of the details of the work carried out and to whom you would like the payment made to. If you want to invoice manually, check out: Invoice and Receipt Template. There are many online invoicing services that are available which help with timely invoicing. You can view a comprehensive list here:

http://www.freelanceswitch.com/money/7-online-invoicing-apps-for-freelancers/

4) Software

Adobe Creative suite is the industry standard for just about everything. (almost). This suite and other programs that you need, come at a hefty price. However, using illegal copies is not advised and may come back to haunt you. Furthermore, you should only use fonts that you own or available under free licensing.

5) Work Environment

A good work environment is essential, it will help you stay organised as well. Are you the type of person who is okay to work in the solitary confines of their home, or do you need a little human interaction to keep you sane? For the latter, renting in a shared studio might be the answer. Scan local newspapers and classifieds for studio space. Sharing means paying less!

6) Equipment

I am a advocate of any reason that results in justifying more electronics but some equipment is vital to improving your work flow and efficiency. Have a look at:

Equipment for a graphic Designer – Graphic Design Blog

I also would add to the mix:

• Phone -landlines or mobile numbers whatever you feel comfortable with. If you work from home and are weary against using your home number, Skype can rescue you.It is roughly £3/Month for an Unlimited Country Account and if you choose to pay £8 every three months, you can get an online number landline number. Which basically means you get a UK landline phone number that when dialed will ring your skype account.
• E-mail – this should go without saying, but you should have a contactable e-mail account; preferably ending in your own domain name.
• CD Burner – this is essentially for archiving your work for legal purposes. We two times a month, burn everything we have created to disk and then post it to ourselves via recorded delivery. A quick way to copyright works etc. Have a look at: 5 ways to copyright your art work
• Good lighting
• A comfortable chair!

7) Insurance

Get insured. Get your studio insured. Get your portfolio insured. Insure yourself against injury. Studio insurance covers you if a visitor falls and breaks a leg! and having your portfolio insured means if it goes walking, you get some financial remuneration.

Related Posts:

• August 5, 2010 -- WorkSnug – Finding Places To Get Design Work Done On The Go (3)
• July 25, 2010 -- Maintaining Business Standards As A Freelancer (3)
• May 11, 2010 -- How to Avoid Over Working Yourself As A Freelancer (5)
• May 9, 2010 -- Designers – Maximising The Value Of Your Work (4)
• January 30, 2010 -- 5 Free Non-Disclosure Agreements (8)
• December 31, 2009 -- Factors To Consider When Pricing A Project – Part 2 (4)

When we first began, a friend sent over some very nice business plan, asset, balance sheet, started up expenses etc type templates. You can use, edit these at your own discretion. Unfortunately, I do not know and cannot ascertain who created them, so am unable to give credit, where its due as these templates are life-savers. The files are in PDF/ Microsoft Word and Microsoft Excel format.  You can download them in a ZIP file by clicking the link below:

 Download Business Templates

Inside the Folder contains:

- Business Plan Template

- Start-up Expenses Template

- Projected Balance Sheet

- 12 Month Cash Flow Statement

- Non Disclosure Agreement template

Related Posts:

• January 30, 2010 -- 5 Free Non-Disclosure Agreements (8)
• October 14, 2008 -- Free Invoice, Receipt, T&C and Privacy Templates (2)
• July 25, 2010 -- Maintaining Business Standards As A Freelancer (3)
• March 15, 2010 -- 50 Freely Available Professional Fonts For Your Designs (34)
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