I once put up an ad on Craigslist for a personal assistant. I’m not very good at managing people, and I know that1, so I wouldn’t want to mislead anyone, Save-the-Assistants style. The ad basically said, “I’m a big idiot with lots of stuff going on. Here are fifty things I need to do (send press releases, make hardboiled eggs, wait in line at the post office, brush the cat, manage Google ads…) If you can do any dozen of them, that would be great.” The going rate for part-time assistants on Craigslist at the time was about $15-$20/hour.
The woman I hired for the job sent me a list of her skills, which were truly incredible (ultimately, she would come over to my house, make a week’s worth of food, send event listings to newspapers, and, occasionally, fix a sink). She then followed up with, “Considering the extent of the skills I have to offer, I am requesting $25 an hour.” I hired her, for $25 an hour. She was totally worth it, and, while I’ve never been very good at delegating, I put more effort into it and tried to improve, because I respected her time, and also because a woman skilled in both HTML and plumbing is slightly frightening.
The goal of this column isn’t to actually tell you how many dollars to charge for your services, but to give you some ammo when negotiating, and to make you feel generally ballsier about quoting prices and sticking to them.
The conventional wisdom for freelancers is to take whatever you’d make per hour in a regular job and double it, since you’ll be paying your own taxes and benefits, and you’ll have to market yourself and spend time perusing contracts and a whole lot of other things you won’t be getting paid for directly. So, if you made $60,000 in your full-time gig, you’d divide by 52 weeks per year and then 40 hours per week to get $28.85 per hour. Double it and round up for good measure, and you might charge $60 per hour.
However, an hourly model of charging for things implies that 1) you shouldn’t be rewarded for being faster than other people (or that, if you are faster, you should lie), 2) work should be compensated based on time spent rather than output (which might be why you got out of the 9-to-5 working world in the first place), and 3) all of the hours a person puts in on a task are equally valuable.
There are all kinds of services and tasks that simply can’t be done for 40 hours per week. One of the things I do to make a living is teach three-hour long classes. It turns out, 18 hours a week of public speaking is enough to give me laryngitis. Similarly, ever get a really, really good massage, one that seems to be working the kinks out of your most obscure internal organs? Now imagine the person giving that massage trying to do that for 40 hours per week. I’ll bet it’s possible to eventually bruise your own hands on other people’s oily backs.
A couple weeks ago, I wrote my column here on TheGloss while my gentleman friend was waking up, eating breakfast, and just generally not being a morning person. When I sent the column after an hour and a half, he said, “Wow, you really slam those out.” Sort of. Saying that something is an hour and a half of work implies that I could do it again — that, given three hours, I could do it twice, or given 7.5 hours, I could do it five times. This is not the case. To write a column in an hour and a half, I need to mull over a number of topics, decide on the topic the night before, and then sleep on it. That’s a heck of a lot of startup time for an hour and a half of work.
The idea of startup time — the combination of coordinating with other people, getting the materials you need to get started, and getting in the right frame of mind to actually start making money on a task — is very important in setting rates. If you’ve ever spent a week going back and forth over email trying to set up a job only to have the person hiring you comment, “But it’ll only take you a few hours,” it can be difficult not to reply, “Actually, I’ve already spent a few hours — talking to you.” I believe in diversifying income streams (having your entire income coming from one source makes you dependent, and that makes it difficult to be ballsy), but there’s also a limit to how many employers/clients/projects a person can manage at once.
The startup time idea is a helpful one to be able to deploy, especially to people working at large companies, hiring you on those companies’ behalf. For instance, say you charge $80/hour for something, but you usually work on tasks that take 20 hours or more. A company wants to “try you out” for an hour or two, at your regular hourly rate. It’s good to have a base fee in this situation — “It’s not going to work for me to take on a project for less than about $600 overall” — and when questioned, be able to explain, tactfully, that a person can do one 40-hour job per week, or maybe two 20-hour jobs per week, but nobody can do 40 one-hour jobs per week. Thus, you need to stick to projects of a certain size.
If you have trouble saying no to people, try this phrase: “It won’t be possible.” It’s a lot easier to say that than “I won’t” or “I don’t want to.” Example: “I don’t want to do that as a rush job unless there’s a rush fee involved,” versus, “It won’t be possible to get that done by Friday without an additional fee.” (Maybe you can use this in your personal life! “It won’t be possible for me to keep being your girlfriend without an approximate 50% increase in niceness on your end.” Okay, maybe not.)
What if you don’t have a regular rate set yet for whatever work you’re offering? One hip-looking women-in-business book recommended that you “Think of the lowest you would accept and add 5%.” This made me laugh — I couldn’t believe that made it into print — and later I flipped back through the book to make sure I hadn’t been imagining things. I’ve read probably an unhelpfully large number of business books, and of course there’s a conventional wisdom on this matter as well: “Think of the lowest number you would accept and triple it.” So, don’t lowball just because you’re a lady who is attracted to hipster lady- business books. Setting prices high is also the only way to get many wealthy people to respect you.
That said, what if you quote a price that’s too high? A couple years ago, I wanted to raise the rate I was charging for tutoring, but I hesitated, for months and months. Finally, I asked: what am I afraid of? I was afraid that current clients would be angry. So I solved that problem by telling them far, far in advance, and making the rate increase seem like a discount — “Next month, I’m going to be raising my rates for new clients, but for current students and their families, the rate won’t go into effect until next school year, seven months from now.”
The other thing I was afraid of was that prospective clients would call me on the phone, I would quote a rate to them, and then we would have a very awkward conversation in which they told me my rates were too high, or turned me down. Once I actually articulated that — what I was afraid of was awkward phone conversations5 — it seemed pretty silly. I raised my rates. Over the next several months, prospective clients did call, and most didn’t bat an eye at my new rates. A few did. One actually got flustered when I told her, and then found an excuse to end the phone call as soon as possible. I was left holding the phone, thinking, “Oh, wait — when your rates are too high, the other person ends up embarrassed, not you!”
I thought about this — if I walked into a restaurant, or tried to hire a photographer, or any of a number of other things, and discovered that the prices were way out of my league, I’d actually be pretty embarrassed (maybe you’re impervious, in which case, good for you!) It would never occur to me that the restaurant or photographer should feel that way. So, armed with that knowledge — that you are immune from embarrassment — you can feel free to set your prices high. Concomitantly, if your prices are so low that no one ever turns you down, you’re clearly leaving money on the table.
A good auxiliary strategy here, though, is to have a face-saving way to still take the project for a lesser price if you want. You can prepare for this in advance. You say “$5,000!” They say, “Oh, lots of other people will do it for $3,000.” You make whatever argument you normally make for the superiority of your services, but you feel like you’re going to lose this one. So you whip out, “I’m actually working on a couple of different deadlines for other clients right now. So let me look at my calendar. I can do it for $3,000 if you can wait until the 31st.” So, you’ve lowered your price by presumably offering a little less (even if not really), and they’ve bargained you down without, one hopes, losing respect for you — you didn’t just bend, you shuffled their project off to a less desirable spot on your schedule.
Finally, if you find yourself in a position of expertise and are able to set your rates more ballsily (no, that’s an adverb, really!), remember that a fair price for services is simply one that a buyer and a seller agree to. You’re not obligated to justify your rates to anyone, nor to explain how you calculated a per-project fee. A good fee is one that makes you happy and excited about doing the work. You have to phrase this sort of thing just-so, but try, “The end product is worth at least that much to the companies that need it, so that’s what I charge,” or “If I charged any less than that, I wouldn’t be motivated to produce the level of work I produce,” or even, “My rates are based on how much money it would take to make me very enthusiastic about a project, and able to focus on nothing but that project.” Who doesn’t want you when you’re extremely enthusiastic, totally focused, and obviously smart enough that they can’t pull one over on you?
I hope you haven’t found my repeated use of the word “ballsy” to be off-putting. I always find it amusing that men have chosen to represent their most aggressive tendencies via their most delicate and idiosyncratic body part.
1. Errol Morris writes in the NYT about anosognosics, people who are so incompetent that they are too incompetent to even know it.
2. You can’t have her number because she’s moved on and now appears on actual television, which is awesome.
3. I’m aware that schoolteachers regularly teach all day, every day — I was perplexed that they don’t all have laryngitis, but plumbing my memories of school reminded me of many, many worksheets and filmstrips and in-class tests, none of which are part of the classes I teach to adults. Although I kind of wish I had a filmstrip machine.
4. Unless you’re just naturally ballsy. No offense intended to 9-to-5 ladies who have fashioned themselves into linchpins.
5. If you broke up with anyone before there was an internet, you should really be a pro at this. It can hardly get worse than middle school dating.
6. Not that I want anyone to have to be embarrassed. A world without embarrassment would be a better world, if one with more openly- expressed bodily emissions.
originally published on June 24, 2010