Event #1 - Know Your Worth - The Dark Art of Freelance Pricing with Avery Swartz

Avery Swartz is the founder and CEO of Camp Tech. She's a tech correspondent for CTV, The Globe and Mail, CBC and Chatelaine, and is the resident tech expert on CTV's Your Morning. Avery hosts the Gather North retreat for women in digital.

Follow her on Twitter @averyswartz
You can find Avery online at averyswartz.com and camptech.ca

Transcript

2. The Dark Art of Pricing @averyswartz for @hexux_toronto
3. What I’ve learned from 12 years of contracting I’ve seen the same evolution of thought about pricing. I’ve gone through this evolution myself, and I’ve witnessed countless others go through it. Here’s what I’ve learned, and a few exercises to guide you through the scary, dark forest of pricing as an independent contractor.
4. Contractor’s rate is not equivalent to salary UX Designer in Toronto salary = $80,000 a year 40 hours a week x 52 weeks a year = 2080 hours $80,000 / 2080 = $38.46 per hour, right? WRONG.
5. Contract income vs employee salary Included in contract income Included in employee salary Taxes and deductions ✘ ✔ Place of work (rent) ✘ ✔ Equipment and software ✘ ✔ Sick and vacation days ✘ ✔ Professional development ✘ ✔ Time not working (breaks, admin) ✘ ✔ Unlimited potential to make money ✔ ✘ Freedom to do what you want ✔ ✘
6. The Contractor’s Pricing Journey 1. Guessing (pulling numbers out of your ass) 2. Asking around and imitating what others do 3. Experimenting to see what you can get away with 4. Questioning (“was that project really worthwhile for me at that rate?”) 5. Discovering that you’re not selling time. So what are you selling? 6. Determining value for you (the “yes rubric”) 7. Setting your price based on the value it brings to you 8. Struggling to quantify what value you bring to the project 9. Confidently tying your price to the value the project creates for the client
7. Exercise 1: What’s your hourly rate? 1. Take a piece of paper and a pen and write your hourly rate. 2. Don’t overthink it. Write the number you have in your head. 3. Fold the paper in half and pass it to Avery.
8. Exercise 1: Discussion How did you come up with your number? Now that you’ve heard everyone else’s number, does that change what you think about yours?
9. Exercise 2: Flat rates / Project fee 1. Read the brief on the next slide. 2. Figure out your flat rate / project fee for the gig. 3. Write it on a piece of paper, fold it in half and pass it to Avery.
10. Exercise 2: Flat rates / Project fee Project: Website redesign Client: established, medium-sized financial consulting firm (15 years in business) Timeline: 6 months Project details: • 20 page information website with a blog • To be built on WordPress (you do not need to quote on development) • Responsive design • Website must be AODA accessibility compliant • The client has a logo and a colour palette but no style guide • The client has page content (copy) already written • The client has a handful of photos and headshots, but might require fresh images
11. Exercise 2: Discussion How did you come up with your flat rate? What assumptions did you make about the project? If it felt scary, why? Now that you know what others would charge, does that change how you feel about your proposed fee?
12. Exercise 3: What’s your “yes rubric”? What makes you say yes to project? Beyond the money involved, what else do you consider? Making a “yes rubric” in advance helps you decide what you will and won’t take on. You can’t say yes to everything, and if you say yes to something you don’t really want, you’ll have to say no to something else and regret it. Opportunity expense is real!
13. Exercise 3: What’s your “yes rubric”? Consider: • Will this project lead to more work with the client • Will this project lead to more work with similar clients / Does this project open a door for me into a new industry • Is it a prestigious project (will it look good in my portfolio) • Does it fit well in my schedule of other projects • Is the work creatively challenging • Is the client a nice person and/or will they be fun to work with • Do I believe in the project / is it something I want to see in the world
14. Exercise 3: What’s your “yes rubric”? 1. Write down your own considerations for evaluating a project 2. Assign a weight to each consideration This is a highly individualized process. Your “yes rubric” will not be the same as anyone else’s. It will also change over time, depending on your personal and professional goals. The “yes rubric” is similar to the Nu School “How Much Should you Charge” calculator: http://thenuschool.com/how-much/#/start
15. The Contractor’s Pricing Journey 1. Guessing (pulling numbers out of your ass) 2. Asking around and imitating what others do 3. Experimenting to see what you can get away with 4. Questioning (“was that project really worthwhile for me at that rate?”) 5. Discovering that you’re not selling time. So what are you selling? 6. Determining value for you (the “yes rubric”) 7. Setting your price based on the value it brings to you 8. Struggling to quantify what value you bring to the project 9. Confidently tying your price to the value the project creates for the client
16. Note: this is scary as all hell. Moving from each stage to the next in the Contractor’s Pricing Journey requires confidence, bravery, and a lot of gut checks. It’s okay to take your time moving through the journey. You can’t fast track it or skip steps. Wherever you are right now is exactly where you need to be.
17. The confidence booster that worked for me “If you don’t rise and go after the bigger, scarier gigs, then those gigs are going to go to someone else. Can you do a better job than them? Can you help those clients more than they can? Yes? Then it’s your DUTY to go and get that gig. You ‘playing small’ isn’t doing any favours to anyone.” - my amazing business coach, Danielle
18. Confidence and imposter syndrome resources
19. Pricing resources Book: Pricing Design by Dan Mall Book: Design is a Job by Mike Monteiro Book: Value-Based Fees: How to Charge – and Get – What You’re Worth by Alan Weiss Book: Implementing Value Pricing by Ronald J. Baker Book: Pricing for Profit by Peter Hill Video: Jon Lax, Let’s Kill the Billable Hour, Creative Mornings Toronto Brennan Dunn’s articles and podcast Paul Jarvis’s articles