Freelance Pricing Philosophy I: The Flat Rate

Pricing is always an issue for us contract/freelance types. Watch discussion fora for people getting into freelance businesses, like copywriting or user assistance (help) development, and you'll see a lot of questions about how to charge.

I can't tell you what rates a freelance instructional designer or training developer should charge, but I can tell you how my thinking has about pricing changed over the years.

As many know, a lot of jobs get priced at a project rate, especially by more experienced contractors. That is, we talk about what I'll do for you, we come up with a number for the job, and that's what it costs you. If you change things along the way, we change the price. If I'm right about the estimate, I make money. If I'm not, I end up donating my time to your cause, to the extent of my error, and learn something along the way.

But even in project pricing, all of us have some kind of hourly rate in the back of our heads (or should), if only to put a value on our time, which is what we really sell. If I underbid a project, it generally means I underestimated how much time it would take. Of course, I may also undervalue my time, but that's a subject for another time.

Many of my colleagues price differently depending on what activity they are engaged in. Just to use round numbers (read nothing into these), you might find one who charges $100/hr. to write original content, but who also does copyediting at $50/hr. People have asked me my "research" rate, as opposed to my writing rate, or what I charge to produce HTML on-line documentation or other technical services, as opposed to instructional design.

My answer used to be like the example above, that my rate would depend on what I was doing.

Now, I charge a flat rate (with a few exceptions). No matter how I spend that hour for you, you'll pay the same.

Why? To make sure you are using me for my most valuable skills, and to make sure I am selling my most valuable skills, as often as possible. I found that clients who really liked my work were the problem. They got accustomed to thinking of me as a general problem solver, so they would slip tasks to me that should be done internally, in their own organizations. Rather than wrestle with bureacracy, or because they didn't like the service they got from internal resources, they'd prefer to spend a few more bucks with me to get it done quickly and correctly.

The result was that it took away time I could spend ghostwriting the great American novel for you, at a high rate, to spend time sharpening pencils for you, at a low rate. That not only cost me money, it was a lot less interesting, and it meant that clients had less access to my quality time, my time being finite, because the "good stuff" was being sucked up by other tasks.

So, I raised my pencil-sharpening prices to my novel-writing prices, and clients learned to either go back to internal resources, or to hire other people, with different skills and different price structures, to handle those tasks.

We all benefited, me and my customers, and I've stuck with flat rate pricing for a good number of years now. I don't miss that pencil sharpener for a moment, nor the pay that came with it.

Next time . . . exceptions to my flat rate . . .