Freelancers: Pricing A Project

This is an old, but good post about how designers (and by extension, other freelancers) decide what to charge.

Blue Flavor, a Seattle-based web design agency, breaks down the strategy because “one of the last things a business should hide from a potential client is how pricing works.”

The post author, Brian Fling, continues:

When we price out a project we not only price out what we know about the project, but also detail what we don’t know. We come up with worst-case scenarios, address risks, and point out all the things we think could impact meeting the goals of the project.

To come up with a number, try using the following formula:

task x time(complexity x effort) x rate = price

The hourly rate is the easiest to calculate: that’s the number you come up with as a freelancer. It’s the number you’ve calculated that you need to make per hour to work the number of hours you want to work and have enough money to cover the expenses you need or want to have.

The task is really the quantity; in Fling’s example, he’s quoting the price of creating three mockups for a new website, so Task is 3. Effort is the ideal number of hours it takes you to create one of whatever the Task is: maybe that’s 10 hours for a mockup, one hour for a blog post, five hours for a press release.
Complexity, then, is to compensate for any weird things that come up—maybe you’re working in an industry new to you, or with a new client, or some other thing that might throw a monkey wrench into the operation.

Of course, Fling says, “when done right, charging by the hour keeps everyone happy.”

How do you figure your freelance rates?