Digital or tech freelancers, how do you charge for the odd hour?
December 16, 2019 11:49 AM Subscribe
Or do you at all?
I've recently come into a rich vein of freelancer fortune with a couple of digital agencies in my town. Having been on a retainer or fixed fee with previous clients, I'm not sure how this whole day rate thing works. Questions inside...
1) Can you explain how you manage fees for short meetings or phone calls when you're on a day rate?
2) Do you charge for preliminary meetings, pre-contract? For example, with the current agency I've been to two hour-long meetings to discuss the scope of the project.
3) What about when you end up working well over the standard number of hours in a day?
4) How do you make sure your day rate is competitive, if you don't know anyone else providing the same service as you?
5) How do you manage situations where one contracted project over-runs when you're due to start another contract?
Any and all information gratefully accepted, including links to relevant books and/or blog posts on freelancing, billing and setting rates. Thanks in advance.
1) Can you explain how you manage fees for short meetings or phone calls when you're on a day rate?
2) Do you charge for preliminary meetings, pre-contract? For example, with the current agency I've been to two hour-long meetings to discuss the scope of the project.
3) What about when you end up working well over the standard number of hours in a day?
4) How do you make sure your day rate is competitive, if you don't know anyone else providing the same service as you?
5) How do you manage situations where one contracted project over-runs when you're due to start another contract?
Any and all information gratefully accepted, including links to relevant books and/or blog posts on freelancing, billing and setting rates. Thanks in advance.
Best answer: FWIW I am not a freelancer but I do manage them. So I'm answering this kind of from the other side of the coin.
1) The day-rate folks I've worked with sometimes charge a pro-rate, usually charge nothing (if it's genuinely short), and often simply decline meetings on days they're not "working for me."
2) Usually these are not charged and when they will be, it's usually stated very clearly up-front. Whether your agencies are bothered by this I don't know; my projects where this has come up have large enough budgets that I don't personally care about another couple of hours but I know they're not necessarily typical.
3) The 'day rate' I've seen is usually treated more like a discount for buying 6/7/8 hours at a time, rather than a 'fake salary day.' So usually if it's pretty close to a "full day" I'll just see that day charged, and if it's substantially more usually they'll either let me know that and take it out of the next day, or ramp it up to charge for, eg, "1.1 days." That said, some of the folks I've worked with intentionally use day rates to help manage expectations on hours - "I gave you my full day, I'm done now." Usually a day rate freelancer means I expect full days no more and no less, whereas the hourly folks' availability might look like 1 hour one day and 13 the next.
posted by Tomorrowful at 12:40 PM on December 16, 2019 [1 favorite]
1) The day-rate folks I've worked with sometimes charge a pro-rate, usually charge nothing (if it's genuinely short), and often simply decline meetings on days they're not "working for me."
2) Usually these are not charged and when they will be, it's usually stated very clearly up-front. Whether your agencies are bothered by this I don't know; my projects where this has come up have large enough budgets that I don't personally care about another couple of hours but I know they're not necessarily typical.
3) The 'day rate' I've seen is usually treated more like a discount for buying 6/7/8 hours at a time, rather than a 'fake salary day.' So usually if it's pretty close to a "full day" I'll just see that day charged, and if it's substantially more usually they'll either let me know that and take it out of the next day, or ramp it up to charge for, eg, "1.1 days." That said, some of the folks I've worked with intentionally use day rates to help manage expectations on hours - "I gave you my full day, I'm done now." Usually a day rate freelancer means I expect full days no more and no less, whereas the hourly folks' availability might look like 1 hour one day and 13 the next.
posted by Tomorrowful at 12:40 PM on December 16, 2019 [1 favorite]
Best answer: 1) Can you explain how you manage fees for short meetings or phone calls when you're on a day rate?
> I might track those hours, but in general, I set my fees high enough so that I don't need to bother about spending an extra half hour on the phone. If it's a considerable amount of meetings, i'll just add them up for hourly, and charge them as 10 full days, plus 8hrs of meetings (=11 dayrate days)
2) Do you charge for preliminary meetings, pre-contract? For example, with the current agency I've been to two hour-long meetings to discuss the scope of the project.
> Depends on the scope of the project. 2hrs is not that much. so I probably wouldn't. This is the cost of doing business
3) What about when you end up working well over the standard number of hours in a day?
> I wouldn't. Or I track hours and work an hour or so less the next day. I guess it depends on what kind of freelance work you do. As a designer/researcher I can generally set them.
4) How do you make sure your day rate is competitive, if you don't know anyone else providing the same service as you?
> Ask the world wide web. Or figure out what your costs are, what you need to make in a year, and then calculate that you'll be at most 50% booked. Then add some for pension plans.
I can tell you that a senior designer/PM in Amsterdam can make anywhere from E500-800 a day. 500 is for multi-week projects.
I also set a discounted rate if I work more than an x amount of days for one client in a year.
5) How do you manage situations where one contracted project over-runs when you're due to start another contract?
> What sixswitch wrote. Communicate, communicate, communicate. And if nothing else is possible: work nights and weekends. That's what makes the difference between a (well paid) freelancer and an employee.
> If you want to keep your freelance gigs: Deliver on time, Communicate well, and Deliver good work. If you have 2 out of 3 you're already golden.
posted by Thisandthat at 3:33 PM on December 16, 2019
> I might track those hours, but in general, I set my fees high enough so that I don't need to bother about spending an extra half hour on the phone. If it's a considerable amount of meetings, i'll just add them up for hourly, and charge them as 10 full days, plus 8hrs of meetings (=11 dayrate days)
2) Do you charge for preliminary meetings, pre-contract? For example, with the current agency I've been to two hour-long meetings to discuss the scope of the project.
> Depends on the scope of the project. 2hrs is not that much. so I probably wouldn't. This is the cost of doing business
3) What about when you end up working well over the standard number of hours in a day?
> I wouldn't. Or I track hours and work an hour or so less the next day. I guess it depends on what kind of freelance work you do. As a designer/researcher I can generally set them.
4) How do you make sure your day rate is competitive, if you don't know anyone else providing the same service as you?
> Ask the world wide web. Or figure out what your costs are, what you need to make in a year, and then calculate that you'll be at most 50% booked. Then add some for pension plans.
I can tell you that a senior designer/PM in Amsterdam can make anywhere from E500-800 a day. 500 is for multi-week projects.
I also set a discounted rate if I work more than an x amount of days for one client in a year.
5) How do you manage situations where one contracted project over-runs when you're due to start another contract?
> What sixswitch wrote. Communicate, communicate, communicate. And if nothing else is possible: work nights and weekends. That's what makes the difference between a (well paid) freelancer and an employee.
> If you want to keep your freelance gigs: Deliver on time, Communicate well, and Deliver good work. If you have 2 out of 3 you're already golden.
posted by Thisandthat at 3:33 PM on December 16, 2019
1. I don’t often have many calls or meetings during a project that aren’t on days I’m working on the project. If I do have some I wouldn’t bother charging for brief ones. If it was an hour or more I might do so. Depending on the client, how I’m feeling, whether it’s preventing me doing other paying work, etc.
2. I usually wouldn’t charge for meetings/calls before starting proper work, but I don’t often have many. If I knew there were going to be quite a few I’d maybe say “These will be taking time out that I won’t be able to work for other clients, so I’ll need to charge for this time.” One recent client explicitly and proactively told me to include planning meetings on my invoices. First time in 15 years that’s happened!
3. I very, very, very rarely work much more than a standard day (which I have set for myself at being 7 hours of actual work). Some times I might do an hour or so more, because I’m in the middle of something, but I’ll either suck it up - I was satisfied to get the thing done - or make the next day a little shorter.
But I often work shorter than full days, and I pro-rata my day rate to those hours. Which, given the 7 hours / day, makes for some odd fractions on my invoice...
4. It’s very hard to tell. You might tell one client your rate and they won’t blink and say “fine” and you’ll think “hmm, maybe I should have asked for more”. And the next client, given the same rate, might suck their teeth, look shocked, say it’s too much and turn you down flat. I liked Anil Dash’s advice in 2005 that your client should look more shocked when you tell them your rate than if you slapped them in the face... but in reality I have lost work by giving people too high a rate (but the same as other clients are fine with) and them apparently not even wanting to suggest a lower price.
5. I’ve always been impressed with people who have so much work, and are planning their “pipeline” of jobs ahead so well, that this is a problem! I usually have free time between jobs, not necessarily by design, so this hasn’t been an issue.
Good luck!
posted by fabius at 1:14 PM on December 18, 2019
2. I usually wouldn’t charge for meetings/calls before starting proper work, but I don’t often have many. If I knew there were going to be quite a few I’d maybe say “These will be taking time out that I won’t be able to work for other clients, so I’ll need to charge for this time.” One recent client explicitly and proactively told me to include planning meetings on my invoices. First time in 15 years that’s happened!
3. I very, very, very rarely work much more than a standard day (which I have set for myself at being 7 hours of actual work). Some times I might do an hour or so more, because I’m in the middle of something, but I’ll either suck it up - I was satisfied to get the thing done - or make the next day a little shorter.
But I often work shorter than full days, and I pro-rata my day rate to those hours. Which, given the 7 hours / day, makes for some odd fractions on my invoice...
4. It’s very hard to tell. You might tell one client your rate and they won’t blink and say “fine” and you’ll think “hmm, maybe I should have asked for more”. And the next client, given the same rate, might suck their teeth, look shocked, say it’s too much and turn you down flat. I liked Anil Dash’s advice in 2005 that your client should look more shocked when you tell them your rate than if you slapped them in the face... but in reality I have lost work by giving people too high a rate (but the same as other clients are fine with) and them apparently not even wanting to suggest a lower price.
5. I’ve always been impressed with people who have so much work, and are planning their “pipeline” of jobs ahead so well, that this is a problem! I usually have free time between jobs, not necessarily by design, so this hasn’t been an issue.
Good luck!
posted by fabius at 1:14 PM on December 18, 2019
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1) Generally I don’t. But if you notice it seriously adding up or eating into productive time, collect a bunch of occasions into one invoice so they see the amount of time they’re using.
2) One option here is to ask to expense travel time for shorter things like this. Above approach works here too.
3) Bill by the week during crunch and price it in.
4) If you’re getting work, and not being grossly taken advantage of, assume you’re competitive?
5) If you find out, please tell me. This is my number one cause of bad project outcomes and I‘m sure I’m not alone.
One thing that has worked for me is backchannelling / keeping key people casually aware that I have New Thing coming up. The right person is not always obvious but there is usually somebody in a client org who will work to make sure you are sufficiently replaceable when you need to leave (being “replaceable” of course is a mixed benefit, but for me it’s been a net positive).
Another is having a lieutenant or assistant with you during the project who’s able to cover some work overruns if necessary on their own — and to coordinate what work you need to do yourself.
The only foolproof thing is to book travel the week after a project is supposed to end. This is nice because you get little breaks between one project and another, but unfortunately has the side effect of all but ensuring either the first project will overrun or the second will want to start early — thanks Murphy.
posted by sixswitch at 12:36 PM on December 16, 2019