What to Charge: Pricing Strategies for Freelancers and Consultants
Book by Laurie Lewis
Notes by Barbara L. Jones
When I began to peruse Laurie Lewis's book for an excerpt or two that might be most useful for the diverse population of professionals making up our AMWA group in and around the Baltimore/Washington area, I quickly had a very long list of "most useful" pieces of wisdom and information. There are so many things in this book that make it worthwhile that I can do no less than to urge everyone to buy the book and read it from cover to cover. (See how to buy it at the end of this article.) It will go down easily because the writing is friendly, readable, and filled with instructive and entertaining examples.
I chose to ask Laurie for permission to include some guidance about something that probably every one of us has done many times, more or less, in our professional lives: negotiate a price or a fee. I also asked to include an example of a letter of agreement, which seemed to me to address in one page almost everything that has the potential to cause misunderstandings in the course of producing and delivering a product.
Here are some excerpts.
Negotiating a Fee: "Where to Start, When to Stop"
- "Some consultants like to make their first offer higher than the fee they want. A client who doesn't blink considers this high fee reasonable, and the consultant fares better than anticipated. If the client objects to the price, the consultant still comes out well after backing off [from] the desired fee."
- "Where to start your bidding process is less important than where to stop: at your bottom line. If you must, negotiate to the lowest rate you consider acceptable, but go no lower. If you can't get the money you feel you merit, ask for something of value in exchange for a reduced fee [such as a byline or printed samples for your portfolio]. Under no circumstances should you allow a client to cajole you into accepting less than you have determined to be the value of the job and your special services."
Letters of Agreement: "Beyond a Handshake"
- "Some entrepreneurs maintain that they do not like contracts, arguing that they set up an adversarial relationship between client and consultant before they have even begun to work together. I disagree; the document simply solidifies the deal. But if you are of the mind that contracts are threatening, opt instead for a letter of agreement. A letter can be friendly and nonmenacing in tone."
- "As a piece of business correspondence, a letter of agreement can be couched in ordinary terms rather than legal language."
- "The letter should cover all of the following points as specifically
- The nature of the project
- What you will do
- What the client will do, including what the client will provide you to work with
- The timetable for the work
- The fee
- The payment schedule
- Who will cover which expenses
- Any specific issues you have debated and agreed upon."
- [As readers have pointed out, a kill fee should also be included.]
- "In addition, allow yourself an out in case your client screws up the project or the project expands."
- "At the end of the letter, include space for both your own and your client's signatures. Make two copies and sign both before sending them to the client. Either in the letter of agreement or in an accompanying cover note, ask the client to sign both copies and return one to you."
Following is a sample letter of agreement from Laurie's book.
Letter of Agreement for Editing a Manuscript
2345 Main St.
New York, NY 10010
September 15, 1999
As we discussed, I will edit your 200-page manuscript on fertilizers. My work will be on paper (not computer disk).
I will do the following:
- Do a major reorganization of the manuscript.
- Indicate areas where you need to add more information.
- Refine the grammar, correct spellings, etc.—a process known as copyediting.
You will do the following:
- Give me two copies of the manuscript for initial edit by October 1.
- Give me one copy of the revised manuscript to copyedit in January 2000.
- Enter the changes into the computer at both stages.
- Pay me as indicated below.
The edit will proceed in two phases:
- Phase 1: Major reorganization and suggestions for additions—To be completed within six weeks of receipt of the manuscript (or by November 15 if the manuscript is received by October 1).
- Phase 2: Copyedit of the revised manuscript—To be done within three weeks of receipt of the revised manuscript (assuming it comes in January and you have paid me for Phase 1).
The total project fee is $3,000, payable in two parts:
- $2,000 for Phase 1
- $1,000 for Phase 2
Payment is due within 30 days of completion of my work at each phase.
You will pay or reimburse me for any expenses related to this project, including but not limited to messenger service, long-distance phone calls, and photocopying.
Our signatures below indicate agreement with these terms.
Joe Bloe (Client) date
Moe Row (Consultant) date
AMWA members can buy the book, What to Charge: Pricing Strategies for Freelancers and Consultants, directly from Laurie Lewis or through Amazon. Purchased directly from Laurie, the book costs $20.00 Please email her to find out where to send your check.