1 00:00:00,000 --> 00:00:04,730 [How to Freelance - with Pasan Premaratne] 2 00:00:04,730 --> 00:00:09,030 [Pasan Premaratne] Once the client has answered all your questions, you have enough information on hand 3 00:00:09,030 --> 00:00:12,660 to determine whether the project is of interest to you or not. 4 00:00:12,660 --> 00:00:19,260 But before you can start working on it, you still have to get back to the client with your project proposal and your quote. 5 00:00:19,260 --> 00:00:22,850 These documents lay the groundwork for the rest of the project. 6 00:00:22,850 --> 00:00:26,940 We're going to spend some time carefully looking at what these documents are. 7 00:00:26,940 --> 00:00:32,850 But before we can do that we need an important piece of information—the price that we're going to charge. 8 00:00:32,850 --> 00:00:39,010 Of the 2 documents the quote will list out the price we charge, broken down by the components of the project. 9 00:00:39,010 --> 00:00:44,620 So before we put the document together, let's talk about how we can arrive at a price. 10 00:00:44,620 --> 00:00:48,600 As someone new to the game, pricing can be very frustrating. 11 00:00:48,600 --> 00:00:55,430 Let's say that in our hypothetical situation, our first client is a friend who wants a website for her mom's business. 12 00:00:55,430 --> 00:00:59,090 Should we even charge to begin with, given that it's a friend? 13 00:00:59,090 --> 00:01:03,750 Our client's budget, given that it's not a pressing project, is also quite low. 14 00:01:03,750 --> 00:01:10,810 Also since this is our first time working on an actual project, we have no guarantee of the quality or timeliness of our work. 15 00:01:10,810 --> 00:01:13,640 Therefore, we shouldn't charge, right? 16 00:01:13,640 --> 00:01:20,410 Now those are all legitimate concerns, but you should really consider whether working for free is advantageous or not. 17 00:01:20,410 --> 00:01:25,350 The fact that you consider yourself inexperienced shouldn't drive you to work for free. 18 00:01:25,350 --> 00:01:32,380 There may be times when just starting out you might have to work for free, but don't assume that free is your only option. 19 00:01:32,380 --> 00:01:39,120 If your client is willing to pay you, charge for your work because there are certainly negatives to working for free. 20 00:01:39,120 --> 00:01:43,150 Now it's true that working for free can help you build up a portfolio. 21 00:01:43,150 --> 00:01:50,940 But 9 times out of 10 you will supporting the product you just created for them, whether it's a website, web app, or mobile app. 22 00:01:50,940 --> 00:01:57,890 Because you did the work for free the first time, a client might expect that any work you do for them in the future will be free as well. 23 00:01:57,890 --> 00:02:05,830 You will be expected to update the website or add new functionality whenever the client wants and at no cost to them. 24 00:02:05,830 --> 00:02:12,340 If and when they spread the word of your services, they might let other potential clients know that the work was done for free. 25 00:02:12,340 --> 00:02:18,580 Now you have more clients who either expect free work or at least a great product for dirt cheap. 26 00:02:18,580 --> 00:02:22,260 Working for free can also damage your relationship with a client. 27 00:02:22,260 --> 00:02:26,690 There might be a chance that you want to stop working on this project after the initial job, 28 00:02:26,690 --> 00:02:31,100 but the client wants as much work out of you as possible since they're not paying for it. 29 00:02:31,100 --> 00:02:34,570 If you decide to stop working on it, there goes the relationship. 30 00:02:34,570 --> 00:02:38,640 This can be quite detrimental if the client was a friend or family. 31 00:02:38,640 --> 00:02:44,820 Free projects are also usually lower in priority than anything else that has the potential of bringing in money 32 00:02:44,820 --> 00:02:46,820 and so aren't worked on as much. 33 00:02:46,820 --> 00:02:52,100 The inability to deliver something on time, simply because free work isn't as high a priority, 34 00:02:52,100 --> 00:02:55,590 is another way you can get on bad terms with a client. 35 00:02:55,590 --> 00:03:00,810 In short free work might seem like a great short-term answer to get that first client on board, 36 00:03:00,810 --> 00:03:03,620 but it can lead to long-term headaches. 37 00:03:03,620 --> 00:03:09,720 Since the cons definitely outweigh the pros, if you can afford to, look for a client that can pay. 38 00:03:09,720 --> 00:03:14,150 Or at least reconsider doing free work for your existing clients. 39 00:03:14,150 --> 00:03:20,250 If you're convinced that you should charge for your work, that brings up a second, more complicated question— 40 00:03:20,250 --> 00:03:23,250 how and what should you charge? 41 00:03:23,250 --> 00:03:26,880 The answer, as you will find everywhere on the web, is it depends. 42 00:03:26,880 --> 00:03:34,760 There are different methods to establishing a price, certainly. But it also depends on your location, situation, experience, and goals. 43 00:03:34,760 --> 00:03:43,400 The 2 most prominent methods you hear about is to either charge on an hourly basis or to charge a flat fee on a per project basis. 44 00:03:43,400 --> 00:03:48,800 Different people in the industry have different opinions on the matter, and there isn't 1 right way. 45 00:03:48,800 --> 00:03:52,590 It's up to you to figure out what you're most comfortable with. 46 00:03:52,590 --> 00:03:57,120 But let's start by going over some of the distinctions between the 2. 47 00:03:57,120 --> 00:04:02,950 If you want to charge by the hour, you take an hourly rate and multiply that by the amount of time 48 00:04:02,950 --> 00:04:05,970 you think it will take to complete the project. 49 00:04:05,970 --> 00:04:11,570 This has its benefits, of course. If a project isn't completed in the time frame originally established, 50 00:04:11,570 --> 00:04:15,340 it's easier for you to revise an estimate of the final cost. 51 00:04:15,340 --> 00:04:22,520 You can also do this if the client suddenly changes the project or requests an extra round of revisions or features. 52 00:04:22,520 --> 00:04:24,680 But hourly pricing isn't for everyone. 53 00:04:24,680 --> 00:04:29,760 You have to know 2 important pieces of information—the hourly rate you're going to charge 54 00:04:29,760 --> 00:04:33,190 and the amount of time it will take to finish a project. 55 00:04:33,190 --> 00:04:39,860 Coming up with an hourly rate as a new freelancer can be a little tricky and given that it's your first time working on a project, 56 00:04:39,860 --> 00:04:42,750 your time estimations could be off. 57 00:04:42,750 --> 00:04:47,330 Even if you have the information ready, you could scare clients off with hourly pricing. 58 00:04:47,330 --> 00:04:53,480 Having a rate of $50 per hour is not uncommon as a web freelancer, but it might seem excessive to clients 59 00:04:53,480 --> 00:04:56,840 who think of work in terms of 40 hour work weeks. 60 00:04:56,840 --> 00:05:02,350 If you tell a client you charge $50 per hour and that it will take 2 weeks to complete a project, 61 00:05:02,350 --> 00:05:08,960 they're going to assume that you will charge them for9-5 work days for 2 weeks for a total of $4,000. 62 00:05:08,960 --> 00:05:15,600 In reality you won't be billing them for every single working hour of the 2-week span, but they might not get that. 63 00:05:15,600 --> 00:05:20,190 Another disadvantage is that when you price hourly, you have to run everything by the client 64 00:05:20,190 --> 00:05:23,100 to make sure that they're okay with paying for that. 65 00:05:23,100 --> 00:05:25,240 This can get complicated. 66 00:05:25,240 --> 00:05:28,150 On the other hand you have pricing per project. 67 00:05:28,150 --> 00:05:31,830 Per project prices are easier for the client to understand. 68 00:05:31,830 --> 00:05:36,880 You just give them a set rate for the whole project that eliminates any sort of confusion. 69 00:05:36,880 --> 00:05:43,890 Like hourly rates pricing effectively on a per project basis requires a bit of experience on your part. 70 00:05:43,890 --> 00:05:51,470 You should have an idea of how long it takes you to complete a type of project and what that should translate to in terms of costs. 71 00:05:51,470 --> 00:05:54,580 It's easy to underestimate time on a project. 72 00:05:54,580 --> 00:05:58,060 When this happens with hourly pricing, you can revise your final price. 73 00:05:58,060 --> 00:06:04,150 But with a per project basis it's harder to determine what that extra time spent means in terms of costs 74 00:06:04,150 --> 00:06:07,420 and how you can best relay that to the client. 75 00:06:07,420 --> 00:06:12,450 Now there are situations where certain pricing models may be better suited over the other. 76 00:06:12,450 --> 00:06:19,200 It makes sense to charge per hour if you don't know how long it will take to complete a certain project, 77 00:06:19,200 --> 00:06:25,790 if it seems like the project may change once you start working on it or that there may be lots of additions along the way, 78 00:06:25,790 --> 00:06:29,640 and if the project isn't something you've done before. 79 00:06:29,640 --> 00:06:37,380 On the other hand go with per project pricing if you've done a project like this often enough to know how long it takes, 80 00:06:37,380 --> 00:06:43,060 the project is relatively short and specific, and finally your client's budget isn't very flexible— 81 00:06:43,060 --> 00:06:47,060 meaning you can't revise hours or charge for extra work.