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[Freelancing] Pricing yourself/services
#1
Wow, just had quite a revelation.

I have always wondered how to put a price tag on what I do. It’s the eternal struggle of the freelance worker: how do you price your work in a way that’s fair to both you and the client? 

I asked this question on Mybroadband and the member there pointed out I must read an E-book called Breaking the Time Barrier, well I just finished reading it and my perspective is changed forever.

I did the per hour cost plus thing since forever as I was under the impression that is the norm and the only way to do it, well one thing I always battled with was what if I work faster on one client and slower on the other one and lo and behold this book touched on exactly that:

Quote:Selling hours actually creates a conflict of interest. It puts you and the client on opposite sides of the table. If you’re selling hours, it’s in your best interest to take longer, to bill more hours. But your client is interested in getting solutions that work as promptly as possible. What if you work quicker for one client than another, but deliver the same value? Should you penalize the client you worked longer for? If you’re slow, it’s not their fault.

What changed my perspective was that the book suggested the following ( This is a quote from MyBroadband )

Value Based

Basically - say you're creating a site for someone that sells a R 40 000 product off the site and you're confident that you can get them 5 sales a year due to the website upgrade then they shouldn't have a problem paying you R 120 000 for the site. Their investments is paid off in under a year, pretty good returns!

So interesting read and I would say a must for any Freelancer or prospective Freelancer to find out how to price what you do.
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#2
(07-15-2016, 08:41 AM)Spreadsheet Ranger Wrote:
Quote:Selling hours actually creates a conflict of interest. It puts you and the client on opposite sides of the table. If you’re selling hours, it’s in your best interest to take longer, to bill more hours. But your client is interested in getting solutions that work as promptly as possible. What if you work quicker for one client than another, but deliver the same value? Should you penalize the client you worked longer for? If you’re slow, it’s not their fault.

From an accountants perspective...we also sell our time/hours. But we are professionals with ethics and techniques in place to regulate the time spend so that we keep it fair to us and the clients.... so we see it that we and the client are working together.


#3
(07-15-2016, 08:41 AM)Spreadsheet Ranger Wrote: Basically - say you're creating a site for someone that sells a R 40 000 product off the site and you're confident that you can get them 5 sales a year due to the website upgrade then they shouldn't have a problem paying you R 120 000 for the site. Their investments is paid off in under a year, pretty good returns!

So interesting read and I would say a must for any Freelancer or prospective Freelancer to find out how to price what you do.

I disagree with the above. Remember the profit that the person takes home, is not equal to the selling price. Perhaps the sale of R40,000 only produce a profit of R5,000. Then its not fair to charge R120,000 for the website, but rather R20,000.


#4
(07-15-2016, 09:08 AM)padjakkels Wrote:
(07-15-2016, 08:41 AM)Spreadsheet Ranger Wrote:
Quote:Selling hours actually creates a conflict of interest. It puts you and the client on opposite sides of the table. If you’re selling hours, it’s in your best interest to take longer, to bill more hours. But your client is interested in getting solutions that work as promptly as possible. What if you work quicker for one client than another, but deliver the same value? Should you penalize the client you worked longer for? If you’re slow, it’s not their fault.

From an accountants perspective...we also sell our time/hours. But we are professionals with ethics and techniques in place to regulate the time spend so that we keep it fair to us and the clients.... so we see it that we and the client are working together.

True and I can understand it, I think one should look at it as a per "profession" case since as a Web Designer this quote summed up my life:

Karen continued, “since there are only so many hours in a year, it puts a cap on how much revenue you can collect in a year, and it means that the only way to make more money is to work more hours. These are limits…and the truth is, they are false limitations that lead to bad behaviors, like burning yourself out by working around the clock in an effort to earn more.
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#5
Very insightful read!!

#6
Integrity is the key.

I am a freelance developer that always strives to make an effort to deliver the same service across the board.
Projects need to be scoped and billed for accurately and time management should not be at the expense of the client.

Honest people will get more work in the future.

#7
True, but scope creep makes time management a nightmare for freelancers.






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