I get this question a lot from freelance editors that are just starting out. They always have a tough time figuring out how to price their services. Creative people tend to have difficulty with the business side of things and get themselves into undesirable situations all too often. Have you ever set a flat rate for a job then found yourself working for peanuts at the end when you did the math? I know I have. I learned a valuable lesson about this kind of situation way back in my graphic design days, and I still use it as a basis for pricing most of the work I do. The following formula doesn’t apply to all situations, but I find it a solid starting point. Here’s how I figure it out…
Step 1 – Mathematical Guesswork
The first thing to do is determine how much you would like to get paid per hour. It sounds simple enough, but this is a sticking point for many freelancers. There is a lot to consider here. A few factors in determining your hourly rate are your skill level, years of experience, location, overhead, market, education, and the clients that you work for. You don’t need a single rock solid rate. There is room for flexibility. For example, the rate that I charge corporate clients is different than what I charge independent filmmakers. But you should figure out a baseline rate, and work from there. Freelance Switch has a super-fantastic rate calculator to help you figure this out.
Step 2 – Creative Guesswork
Now that you have figured out your hourly rate, you need to try and estimate how many hours you will work on the project in question. Figuring out the amount of time you will spend on a job isn’t an exact science. Sometimes it’s nothing but an unlucky guess. But it gets easier with time and experience. I know this is vague, and may seem unhelpful, but only you can guess at how long it will take.
Step 3 – More Math
Once you have an idea of how many hours it will take… double it. That’s right, double it. It’s usually going to take you at least twice as long as you think it will.
Step 4 – Communicate
Let the client know that you work by the hour, what the rate is, and how many hours you think it will take. Make it clear that the total price is an ESTIMATE, and if you spend more hours it will cost more, and if you spend less hours it will cost less. This way it
is fair for everyone involved.
Sometimes you’ll have to do everything you can to come in under a certain budget because that’s all the client can spend. When this is the case, the client should know that because of the limited budget, you have limited time to accomplish what they want, so there will be compromises. You should work with the client on what those compromises should be and how to get the edit done under budget with acceptable results. All too often it is the editor that is making the compromise of time. Communicate.
This obviously does not apply to every situation, and there are many ways to bill a client. Some of my clients pay a day rate, and some pay a weekly rate. It all depends on the client and the scope of the project.
Setting rates gets easier with experience, but hopefully this helps a little. If you have any tips or ideas that work for you and would help, please share them in the comments.
