Setting your fees can be a difficult thing for a freelancer. Many of us have trouble putting a value on our work. Potential jobs are typically offered at a set fee and we have the choice to take it or not. The impulse to take the job regardless of fee can be heightened during difficult economic times.
When the economy is so uncertain it is tempting to take any work just to ensure there is a flow of dollars into one’s bank account. While such actions might solve a short term concern, the long term impact can be detrimental to future success. The person who hired you may not remember the difficult economy but they will remember the fee. Going forwards you will have a potentially unpleasant uphill battle to get the fee you know you deserve.
Before I continue I must be clear that not all projects can be evaluated on economics alone. Doing so makes us mercenaries rather than artists. Working in a creative field my primary concern is the art. Sadly our society does not fully value art and as such the drive to create beauty must be balanced against the needs of food, shelter, and clothing. So if the priority of my soul is the art, the priority of my body is the fee.
Knowing within yourself what your work is worth is necessary to getting the fee you deserve. Discovering what that is requires balancing your sense of worth and the life you want to live with various external factors. If you want to make $50,000 a year, you have to do twice as many projects if you charge $1,000 than if you charge $2,000. The actual fees you can expect may not make it possible to earn as much money as you would like. At that point you need to reevaluate your lifestyle.
Determining a realistic fee requires looking at five factors.
- Market Demand
Depending on your field there will be a greater or lesser demand for your services depending on where you are. New York has a glut of theater designers. San Francisco has a glut of Web Designers. When a market is flooded there is more competition for each potential project. This increases the likelihood that someone else with your exact skill set will be willing to work for less money than you. - Time in the Field
It should be obvious that someone fresh out of school would not demand the same fees as a thirty year veteran. That said there are plenty of people new to a given field, without much training, who ask for fees equal to the real masters. - Past Projects
Even if you have only been around a short time you may have landed a few big projects in that time. While the theater tends to judge based on what you did last week rather than what you did last decade your history speaks to your aesthetic judgement. Technology moves fast but talent builds slowly. Solid projects, even if they are old, can speak volumes about one’s creativity and insight. - Contacts and Networks
The people who speak highly of your work are speaking of your worth. Fifty people your potential employer has never heard of do not hold the same weight as one highly respected veteran. - Talent and Skill
You might find it odd that I leave this for last but in many ways it is the least important. Until someone has worked with you, your talent is little more than images in a portfolio and words in a recommendation. As a mentor of mine once said, “You have not been hired until you have been hired back.” The value of your work shows up when you get hired again.
Knowing your value gives you a place to bargain from. You know how much you want and how much you will settle for. These maximums and minimums are necessary to have in mind when negotiating a fee. Without them you are guessing.
I recently negotiated a project that was paying a weekly fee. I knew what I had previously made on similar projects so I added to that as my maximum. I also knew how much I would be willing to settle for. The producer offered just below my minimum. I countered with my maximum. Five minutes later we had settled on a number $150 above his initial offer. Over the two weeks the project will last that five minutes made me $300. Not bad!
It was not too long ago that I would have just accepted the initial offer and been done with it. Not only have I gained a greater sense of my own worth generally but this particular project filled the five requirements perfectly. The talent pool was relatively small, I have sufficient experience with the work, I have done similarly high profile projects in the past, I was recommended through mutual friends, and I am good.
Every project is unique. Yet having a clear sense of your own value will make your position in the fee negotiation process strong. Knowing your worth reduces the two hurdles of the bidding process. Overbidding keeps people from hiring you. Underbidding keeps you working harder than you need to make enough money.
Knowing your worth not only puts you in a position of power with regards to your work, it gets you the work you should be doing.
I hope you found this article useful. Please let me know in comments.
