Jerry Kolber been freelancing in the world of TV and writing for a while now, and he (YES Jerry Kolber is a HE!) gets one question a lot from friends: “How do you bid properly for a freelance job?” Props to Ona for asking me this today mere minutes before I was going to write my blog post on the soaked-in-sensuality sexual/political/artistic insanely vital NYC scene of the late 80’s/early 90’s and why the recession is the best thing to happen in years – you’ll just have to hear those stories another time, which also means Ethan doesn’t have to worry about me using the word blowjobs on the blog. Instead, today I’m going to give you Jerry Kolber’s Patented Super Duper Formula for How To Avoid Being An Underpaid Buddhist-Inspired Mindfulness Practicing Freelancer.
Those of us dwelling in the compassionate-scented world of Buddhist-inspired philosophy while freelancing have a double-edge sword trying to slice through our wallets when we bid on jobs. First, if we are practicing mindfulness it’s not unusual to find that we steer ourselves naturally to working with clients who inspire us, or whose message we like, or who we just want to help. Right off the bat, we’ve got a bit of a friendly vibe going which makes us careful about “not charging too much”. Then, if you’re anything like me, a slightly bitter cocktail of fear, anxiety, guilt, and insecurity presents itself to your lips; no matter how great your work has been in the past, there’s always this sense of beginning again. Then, my next thought is “This is why people have agents,” but that’s another story altogether.
So how do you properly bid for a job as a Buddhist-inspired Mindfulness Practicing Freelancer? My suggestion is this:
Figure out what your annual income needs to be (not as hard as it sounds – what do you spend each month X 12 + whatever you need to put aside for taxes or savings). Now divide that by 1,500. Why 1,500? Because if you are a full-time freelancer, the reality is that you can probably only bill for about 30 hours a week, 50 weeks a year.
The number you get by dividing your annual income needs by 1,500 is the hourly rate you should be charging to meet your annual needs. Magic! Sparkles! Fairydust!
Adjust up if you want, but don’t ever charge below this number unless you don’t mind coming up short. If you know you only bill about 20 hours a week, then adjust accordingly (divide by 1,000 instead). You get the drift.
To bid on a job, figure out how many hours it will take, worst case. Then double that number, because that’s how many hours it will ACTUALLY take. Now multiply your hourly rate by that number, and that’s your bid.
I.e. – you get hired to design a twenty page newsletter for a big not-for-profit. You figure it will take five hours of gathering information and materials, eight hours to do the layout, and another five hours for edits and revisions. That’s 18 hours. Double that and you get 36 hours (by the time you add up all the phone calls, emails, additional time spent making it perfect, you’ll easily spend over 30 hours).
If you need $40,000 a year, your hourly minimum rate is $27 (40,000 divided by 1,500), so your bid is $27 X 36 hours = $972 – so $900 or $1,000 for the job, depending on how you want to round.
If it’s people you know and love, and they know your time is limited, and you can really keep it to 15 or 20 hours and they’ll “take whatever you can give them in that time”, then by all means bid based on 15 or 20 hours. But when you get to 20 hours, and it’s not looking great, and even though you agreed to 20 hours you just love them so much and feel guilty and want to make it perfect and work another 15 hours (or they start giving you crap because they want more work done), realize you’ve just donated over $400 to their organization and reduced the amount of time you have available to make money.
The habit of under-charging is a good one to break. If you’re anything like me, you have a real hard time delivering anything that’s not fantastic, even if it literally costs you money (i.e. billable hours). Undercharge often enough, and eventually you’ll have to whip out your Visa card to pay for your kale, tofu, and patchouli , and I know from experience that this is not a good position to be in. I much prefer being a Cash-Paying NeoHippie.
I’ve found that for sensitive, compassionate people, breaking down freelance bids into this formula is a great way to avoid being an Underpaid Buddhist-Inspired Mindfulness Practicing Freelancer. Now I seriously have to get back to work – for a client who is paying me well. I’d love to hear your thoughts on how you guys figure out how to charge for your services.