Tuesday, March 25, 2008

Freelancing Part 1 - How Much to Charge?

Lately I've been freelancing a lot which has been great. I love the flexibility and control I have over my own time. I'm so busy, however it's hard to just manage that time. But my biggest worry is negotiating the right rate.

In order to figure out the right rate I asked several friends & colleagues for their insight. It's interesting to compare what they said:

Susan pointed me to this article which offers a calculation of freelance rates based on what you would be making if you were getting a salary. According to this I should be making between $90-120/hour. Calculating Your Freelance Rates - Part 1

A friend spoke more about Stock options. Since I work with a lot of start-up companies this is relevant. They are always trying to figure out creative ways to pay employees which I find does NOT work especially if you have overhead. He says, "...They should be indifferent between paying you in cash versus stock- perhaps they are trying to "get a deal" from you. You should ask them what the shares were priced at when they raised money- that's effectively what they are paying you: (number of shares * value of shares at the previous funding round). Just like Mad Money- shares and share price."

Also said to go check out Salary.com to see what you should be making.

Tam directed me to the salary survey on Coroflot.com which came up with numbers way below what Salary.com shows. This is weird, maybe Coroflot doesn't have a large enough set of data to be accurate?

Pedro Sostre, a design director I admire said it's better to politely decline work than take a cut on price. Many people who go the budget route may return in the future because they're not happy with the cheaper work.

Keara, another design director I admire has always told me to stick to my guns in regard to rate. Citing that there are not than many design directors who are set up to design high traffic, interactive media. Taking into account these overhead costs is a huge deal:
- Cost of software
- Cost of hardware
- Utilities, and recurring expenses like the phone, internet & ISP
- Payroll for employees & sub contractors
- Rent (or mortgage)

All these factors add onto your rate. I would love to see comments from other internet designers about their rates and their success stories.

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