Don’t let the title fool you. I certainly love being self-employed, but I cringe when I hear the self-employeed reference themselves as “freelance.” Maybe it’s the way others perceive freelance, but overtime I’ve come to find that people think of freelancing as something “we do on the side after we get home from our real jobs.” While this might be true to some, it most certainly is not for those of us that do it full time. And by full time I mean 7 days a week, 12 hours a day. Anyone that runs their own design business knows that this is a real full time gig. I’ve received short conference calls while out to eat with friends on a Friday night as well as made contacts at grocery stores; it’s non-stop.
Make no mistake about it; running an independent business, no matter what field you are in, is extremely time consuming, exhausting and requires a lot of motivation and dedication. It’s not for everyone. Running your own business means that there are more unpaid and non-billable items that you perform on a daily basis. Emailing, answering phone calls, marketing, networking… these are all, for the most part, non-paid facets of what we do. If you are an in-house designer, responding to emails, answering phone calls, and marketing, among other things, are payable because you are on the clock. You get paid for the time you are under the roof of your office. The self-employeed unfortunately do not. This means that we need to compensate for the time we do not get paid. Freelance means that we do more unpaid “clock” work; not that we do more paid work for less money.
This might sound familiar to some most of you: I received an email from a potential client inquiring a new website. After a few emails back and forth, the talk of money came into the equation, only to have the client question why my rates where so high as “they too were freelancers or small businesses.” They also asked if I’d consider slashing my rate by two-thirds. How about this one: I received emails looking for a $1,000 website because large firms I’ve contacted charge in the six-figures.
There are reasons large companies charge $100,000 for a website and it’s not only based on credibility and size of the website. They have more employees to pay and a much larger overhead to cover. The price for this is taken into consideration. It’s not just design firms that do this. It’s all businesses. How much do you think your local grocery store buys a box of Cheerios for? Having worked for a TGI Friday’s a while back I remember seeing how much they get a rack of ribs for in comparison to how much they sell to the consumer. The margin is so unbelievable that you don’t even want to know. The Apple iPad costs $270 to make. Does this stop you from buying one for $499? Most likely not. Why? Because there is the need factor and there is the trust factor. Need not in the way that if we don’t have one we will die, but need as in we want that one instead of another tablet computer. Why do we want that one? Because we trust it and the company behind it. The same can be said for design services. Sure you can go out and get a $500 website done up, but I guarantee you will eventually come back to getting what you want from someone you trust, and between me and you, if someone is designing and building a website for $500 I’d be extremely vigilant making that decision.
I receive a lot of emails from designers just starting off asking “how do you charge?” This is a tough one and I can tell you with time it only gets better for understanding what you should be charging. Now I’m not saying to go out and rip off your clients, but when you are pricing your services take into account all of these extra “non-billable” things. A good ten hours of my week (at least) is dedicated to answering emails. Do I get paid for this? No. However, I do need to make up for all of these extra hours someway. Either that or I’d find myself spending more than I make per say. Also, consider taxes. Around 40% of my income goes to good ol’ Uncle Sam. A thousand dollar project pretty much goes right down to $600 bucks. Freelance is a business and it should be handled no different than any other. Sure, we can charge less than the large firm because we have lower overhead costs. That’s one benefit of working with an independent designer, but lets not take advantage of the fact that we are working alone. Quality design and development comes with time. Each project requires a unique solution and without taking the time to think, plan, structure, design, develop and so on, will only return bad (or less than par) results.
I understand that it is often difficult to budget a company, especially if its just getting its feet wet, however building a larger budget and coming back to a project later is a much smarter investment than getting something slapped together for the sake of needing it. Investing a few extra hundred or thousand dollars (or whatever the cost difference might be) to have it done to the best of its potential will kick back a greater outcome all together and all sides will be much happier in the end.