Totally agree with Adam on "tell them at the end that next time it'll cost more because you didn't break even". One other part of that which can happen (I wouldn't expect it as it's highly dependent on field/person/company/project/cost) is that the client might offer to tip or split the difference to help make you whole. A good client will understand that if you aren't making money, you aren't going to keep doing that work, so if they like you and they can afford to, telling them MAY help you recoup some of that loss. Don't count on it, but the time to bring it up is when you turn in, aka when they're at their happiest with you.
As a guitar builder I’m always balancing the cost of making my guitars with the actual income of musicians. I can make extremely complex expensive guitars but beyond a certain point the buyer shifts from musician to collector. A big part of the appeal to this line of work, for me, is putting them out into the world to make songs and music so I’m constantly striving to make my process more efficient so I can charge less without screwing myself.
You are an absolute legend, sir! As both a musician and a woodworker, I appreciate your consideration in to the fact that, as a group, we're broke as hell. Too many shiny toys. It's a rare gem to find something of quality that's both had care put in to the process and is economically equitable.
I've had some pretty good clients. I run my family business and one of our clients goes way back to my grandpa's day actually. We agreed on a set price per unit with some miscellaneous fees. Did the job, and I charged them according to the numbers. This client said to me "Well we came in under budget for our client, and we're basically the middle man, you're the one doing all the work, also we don't want our clients getting used to unusually low prices, so we've mailed your check out and you'll see it's rounded up to the next thousand" and I told him "It's no wonder you have the reputation for being one of everyone's favorite clients"
@@Steve_Streza And building relationships is worth something. They don't teach that in business school, but it really does matter. If you treat a customer well, or even a supplier, they will be willing to let things slide when you really need them to. Favors earned and favors owed are a real thing.
One thing I've done when I want to give a client a deal is to invoice at the price it would NORMALLY cost, then add a discount to the invoice to hit the lower price. Helps the client show their money people what to expect to pay for future work.
I enjoy when family asks for professional work. I typically cut my rate by at least 50%… and still have them tell me it’s too high. The advantage is I’ve never had to do work for family.
Fam: "But I want you to work for free!" Maker: "Oh cool I didn't realize, I have a LOT of landscaping that needs to get done, are you interested in working for free also?" Fam: "Not really, I just wanted freebies from YOU."
that reminds me of something i got told when i was still in college, "however long you think a project will take, double it. Because you'll get half way in, realize a way better way to do it, and start over" Bill accordingly
As a business owner myself, I never underprice myself to get a client! It's more awkward to have to raise the prices on them later vs them always knowing roughly how much a job of a particular size will cost. Just sell them on the fact that they're paying you what you're worth , the quality of the work you're going to give them and what's fair per the current market. If they're looking for someone cheap it's not usually likely that they'll be willing to pay more later. They just wanted someone cheap and will continue to look for someone cheap. This is just my experience though! The way Adam handled it too is perfect. If it's something you haven't done before and aren't sure on, or it's a passion project then it's OK to lower your price, but let the client know first that you're doing it because it's a passion or something you're personally connected to. Freelancers, please, don't underbid yourself! It's not even about undercutting other artists as a lot , it's about undercutting yourself and your own worth.
Agreed. I'd also add that you should NEVER lowball a bid just to land a client, without having a good reason for doing so, and being able to justify it to your client. If they were me, I may hold you to your bid and the contract. Depending on how blatant the underbidding was, I may even consider litigating and seeking costs and damages. It's just one of those business practices that really annoys me. As does being on the other end, so dealing with purchasing managers who know how to get the best price on 1,000 bath towels, but have no clue how to price or value services. For me, when I'm looking for services, most of my decision making is done during the bid process and contract negotiation. If someone's asking questions about the deliverables, I feel more comfortable that they understand the requirements and hopefully will deliver what I want. I'll often look at the bid spread and reject anything that substantially undercuts the other bidders, because it suggests either they don't understand or are intentionally lowballing. I'll sometimes ask why they're the lowest bid, and often don't get good answers. Like Adam said though, if the person explained it was because they really loved the project, wanted exposure or some justifiable reason, I'd be happier. Otherwise there shouldn't be any suprises when it comes to the final invoice. It's normal to hedge things like currencies or materials in contracts, and generally good practice to do so. For me, it's far more important to have suppliers I can trust and rely on. I'm not looking to buy 1,000 widgets at the best price if I'm commissioning something special. The bid process can be a pain to run, and I'd much rather have a short list of business partners I can trust. I also follow much the same principles with my clients, ie if they expect annual price reductions, benchmarking etc, they generally don't stay clients. Sadly, price & margin squeezing is common though.
@@brolohalflemming7042 Exactly! You did a great job at articulating a lot better than I did. I've had clients reject my bids because I'm too expensive, but I'll usually look at what they got later and it's clear they went cheap.
In my early career as a graphic designer (30 years ago), the Graphic Artists Guild Handbook was my go-to. Still in print and on its 16th edition. Just a treasure trove of information.
Never do any work at a loss. But keep in mind that there is more to life than money, i.e relationships, mental health, job satisfaction, stretching a skill or ability, learning how do do something new. These are all returns for effort and work that are not financial.
This was good for me to hear right now. I recently started working in a new field as a freelancer and I don't really have connections in the industry. I noticed that every job I quoted was immediately accepted with no hesitation on the part of the client. after attending a trade show and talking to others in my niche, I found out I'm charging way too little.
I learned my lesson on discounting to attract a new customer. The price they get the first time is the price point they will expect forever. Sell on quality of service, never on price. If they can't afford it, negotiate to scale back the deliverables to meet the price they want. Discounting also devalues your work in the mind of the client.
Having years in working as a Massage Therapist with my own wellness co-op, I would offer a first time client discount - the clients know they are getting a discount at the outset, and I never cut corners on my work, so they see how valuable my service is for them. Its a great way to find clients that need my service and weed through the people who are looking for some other therapist. I specialize in accident/injury recovery and rarely do relaxation because my knowledge and talent leans toward problem solving.
Once got mad a friend in LA who asked if I had time to do some photoshop work for someone but didn’t tell me who the client was, didn’t think this detail was important. Later learned the client had big money and would have been great to connect with.
The other thing you can do is give them the full price for the first job, and discount that price as a “new customer discount”. That way they get the price they want but they know the next job will be more expensive.
Pricing is complicated and involves a lot of factors. You might start with the number of hours of your time and what hourly rate you feel your time is worth, but then you need to factor it up to account for things you'd take for granted in a salaried job like paid holidays/vacation/sick leave, health care plans, etc.. Then you need to add in cost of any materials used and what it cost you to find them and get them where they needed to be. Presumably, you are using your own facilities, tools, equipment, etc., all of which you had to buy/lease/rent; some portion of those costs need to be factored in to your job price because you are spending money to maintain a shop, keeping the lights on etc.; tools wear out, equipment can become obsolete and require updating etc.. When you consider your own time, it's not just the job itself but the time spent on it from making the sale, doing paperwork, and collecting payments. Your invoice doesn't have to go into all that detail - just mark up your hourly rate, cost of materials, and subcontract costs by suitable percentages.
Your experience and willingness to share the wisdom gleaned from said experience makes you a genuine gem in a sea of zirconium. I thank you for being you.
This is so useful! I've gotten a lot of this stuff right by luck rather than judgement, I am NOT a money person - people reallllllly need to be careful doing stuff for cheap/free because they love it, they want the experience etc... without saying THATS what they're doing at some point during or at handover/completion. Two reasons, first it sets up potential clients to expect everyone will work for next to nothing, but secondly if you set yourself up for working for peanuts, you WILL burn out, you WILL hate the work you do, you WILL over-sell yourself, take on too many jobs and then let customers down and that sort of reputation for not meeting deadlines, not turning out the work, reallllllllly hurts you long term like REALLY long term. The internet means the world is a TINY place.
Question: What if you quoted for a new job and say added 20% to the quote to mitigate any unexpected outlay but then found that the actual end to client cost was less, Would you pay back the extra you added? Increase detail and finer finishing to complete at that quote, or something else?
As a builder of 38 years, people respect honesty and most will want you to make money, but sometimes it better to walk away from a job if the profit is not there. My uncle once told me, "Sometimes the best jobs are the ones you don't get."
I'm glad Adam has been answering questions about bidding gigs. Even though I'm in a completely different industry, I started applying his advice last year. Thankfully, no one has turned me down because my quote was too high. I'm slowly starting to get more comfortable asking to be paid for my work (I'll never be all the way there).
Don’t think I knew you were a graphic designer early on in your career. So cool to hear your answers. Still freelancing but looking to detour away from client work as I age and the landscape shifts with AI and younger talent willing to work for peanuts. This inspires me to move ahead with my “MythBusters”.
On underbidding by choice. I term it as a different coin. Clustered around the haunted attraction I work at there have been various times where the renumeration was below market value monetarily. The value was covered in satisfaction, learning, creative outlet and other intangible but very real coins.
Never go cheap to get the job. All that does is demean yourself and your project. The customer will always expect the same in the future, no matter what you say. In fact, coming in cheap can actually hurt your chance of getting the job. Personally, i generally know what things cost, because i do my research. And if somebody comes in below what i expect, they are either ripping me off somehow, or they don't know what they are doing. And neither case justifies me hiring them. Expertise comes with a cost, if you want the best, you have to PAY for the best.
That doubling the fee and them saying yes without hesitation reminds me of the scene in Road To Perdition when the son asks for money... sets and amount and then asks "could I have had more" and Tom Hanks' character says something like "you'll never know".
This is reasonable to do it, and be honest. Sometime to evaluate the cost of a project is very hard. And when its your main source of income you need to keep the priced to a level that can support you. On the other hand many people can not charge people as much as it should be, and undercutting they own price per hour. But when you have people on a payroll its even harder. Bespoke stuff cost A LOT. ask a company to do it and you can realise the cost rises exponentially
I'm always upfront about it. I don't quote the customers less, I put the actual price on the quote, plus one or more discounts for specific reasons. As in, I don't quote them 8k, I'll quote 10k, plus a 10% "regular customer discount" and a 15% "special discount" on top of that. Then I make it a point of telling them that I gave them the regular customer discount even though they're a first-time customer. That lets them know they can get that discount in the future if they continue bringing me business. The other 15%? It's an occasional thing. Next time, I'll quote them whatever it was minus the 10% regular customer discount, no special discounts. They'll ask about it, I'll say that was a one time thing, but "I'll see what I can do", then slap an extra 5% special discount instead of a 15%. Next time, no special discount. Another thing that I do is I *never* quote for worked hours or any other time-based pricing. I didn't do that when we were a two-man operation, I don't do it now that we're a proper business and have dozens of people on payroll. Always act as a company, never talk to customers in the first person, even if it's just you. Saying "I" doesn't take into account all the costs you have. Don't quote them for 15 hours of work, quote them for the job, and calculate your hours internally. If you're unsure about how long it'll take, add a conditional clause on the quote. Say "I think we can get it done within this bounds, but if the job grows because of this or that thing we've talked about, then I'll charge you for this item". Call it "project extension" or something like that suitable to what you do. Then use that same project extension item every time the project grows. You calculate internally that that entails. If your project extension is 3 days, then charge that fee every time the project grows by 3 days of work.
I had an experience like that on a freelance 3D modeling job that more or less landed in my lap. The original scope changed and was more complex than originally expected, the guy was out of time and said do what you gotta do to get it done, so I did. Now I didn't know any better and we had a pre agreed to rate, but it was one of those moments where they said yes without hesitation and I could have asked for more. Of course it was partially a passion project for me and I printed the models for myself and they happily sit on my desk at home.
I was watching about some car restorations, and the guy was sending the cars in Latvia because the cost was 50% less than in USA, it takes a lot of time. And you are asking your price, they say, but there this cost less, (imagine everything) , but the living/labor/material costs is less there. But when you undercutting your job, clients chose you just for this reason, and when you increase your price, these clients will leave because they dont appreciate your work but your price.
good ideas to reflect on. I ran a 2 color heidelberg press press for a while. The owner I worked for alway bid the job to be able to reprint the job three times if there were mistakes or do overs to still brake even.
I used to do compliance for a call center working with non profits. On the side, I would fill out all their paperwork for various state govt agencies and they paid me as work for them freelance. One year they asked for more help...but upfront, they said they wanted it for free. That was the end of our relationship.
I'm reading a lot of comments here about never underpricing to win a client. I have an example where one of the jobs i'm responsible for was originally underpriced in order to win the job. That contract is worth close to 1 million. The thing WE NEW though is that scope change was going to be a massive factor over that life span of this contract. The client and style of job will always need extra work that is not specified in the contract. They won't go anywhere else because we have repour, familiarity and they are happy with the work that's being done. In this instance the massive profit gained is because the work increases as the job goes on. There are also specific pricing in the proposal outlining "work outside the specified scope". That is an example where under-pricing a job to get your foot in the door can pay massive dividends in the long term.
The best example of how to handle pricing for unknown projects and price increases is the story of how they built the scuba helmets for the film The Abyss. I saw an interview with the guys at Western Space & Marine who built the dive helmets that are not only props but also fully functioning diving gear. When James Cameron went to them they looked at his wish list of what they needed to do and originally quoted him some huge number like $50,000 a helmet. Cameron balked at that price. So the supervisor at Western Space & Marine called him back an said they could do it for $5000 per helmet. They got the contract. But that $5000 was only the cost of the mold work. Then a week later he called Cameron back and asked him "Hey did those need to be internally lighted? They did, well that's and extra 2000 a helmet." Cameron of course said yes. They went back to him ever week or so asking about an additional feature and adding on the cost. So by the time they were done, they had internal lights, external lights, microphones, fans to reduce condensation build up, air supplies, seals, and everything else to make them fully functional diving helmets that fit the needs of the production so you could still see the actors faces. The final price, $50,000 a helmet. Which Cameron's company paid. So by managing the initial sticker shock no only did they get the job, but the created a legendary prop that has influenced real world dive equipment and space suits ever since. True story.
I hate estimating, it's my least favourite part of armouring. Or any of the contracting stuff I do. Clients I do work for regularly know this and are willing to pay me hourly wage plus materials because they know I'm honest about how long a thing took me and I'll take the time to do the job right. When possible in the armour shop, we like to make a saleable display model and calculate exact costs for future reference and then add the "something went wrong" buffer...
I actually tell the customer right off the bat that they're getting an especially good price - I'll even put it on the quote as a line item, say, "introduction discount" or some such. That way I sidestep any kind of "well, it's not my problem that you miscalculated the cost on your part" argument (or worse, the customer thinks this but doesn't say anything). 😊
In the 70's the State of Iowa built a new statewide radio system for the State Patrol and local governments. When they went back to get more. The company tried to raise the price per unit. Instead the State went out for new bids.
I was really lucky with my first clients, but the last two put me off so much I'll never do for-hire work again. I'm seeing a LOT of people discussing what to charge now, and I see I've underbid myself so much. I think I'll just stick to doing my own work, which seems to sell well enough as is. (I became self employed just for that reason, silly of me to go back to working for others in the first place.)
I had a boss who was a master at getting clients with "lucky to break even" prices. Making the transition to charging what the job was actually worth on the next project... not so much. The company is not in business anymore.
"You have to screw up in order to know how to not screw up." Wow this hit home. I need a tattoo of this or something so I don't give up after a screw up.
there are times taking a loss is because of no work at the time to get some cash flow, that stops as soon as jobs start coming in. but there are those the price is lower and some the price is right and then theres the ones you really don't want but the pressure from the client is that great you put in a price that you hope will deter them but you still end up getting the job....
The bidding system has created a race to the bottom. There will always be someone willing to do it for less. You are much better off building relationships and trust with customers who know what a fair price is for your services, then simply negotiate a fair price with your customer.
Back when I worked for public housing there was always bidding contracts for the stuff we contracted out, and of course some people had a inside lead so knew what to bid, but 90% of the time we'd have to waste a week repairing their f ups and my mantra was "well that's what you get when u go with the lowest bidder, u get what u pay for"
Increasing price for a later job makes a lot of sense. Would the company think it reasonable if a customer walked in expecting the same price for their goods or services in 2023 that they bought in 2022? Or even yesterday?
23 years always the price is the price, but I never cut price to get a job. Have had some people ask why it's simple, I know what I need to live they don't.
For me the issue is always that people have no problem assigning value to physical things, but tend to have real difficulty understanding that my time and skills also have value. I'm a miniature/model painter and the one thing I hear more than anything else is "You want how much? For a bit of paint? You must be crazy." Now I have a stock answer: "You're not paying me for a bit of paint. You're playing me for X hours of my time, two decades of experience and a skill set you don't have. I throw in the paint for free." I get that to the uninitiated, £200 for a display miniature can seem like crazy money, but if that miniature takes 20 hours, I'm not even making minimum wage.
That "Left money on the table" feeling can feel like a real kick in the groin; whether it's getting a job bid accepted w/o question, or an eBay sale in under 8 hours of posting! Remind yourself, "I thought this out ahead of time. I offered as high as I thought I could go, and would be happy if I got it." - enough is as good as a feast. Buuut.... keep it mind for next time!!!!
I too was a graphic artist for 30 years...the first 12, working for someone else, and the remaining years, beginning in 1996, self-employed...and back then, I would often turn to *THE GRAPHIC ARTISTS GUILD HANDBOOK: PRICING & ETHICAL GUIDELINES* for help on issues such as pricing.
It should also be said that there are some industries where the standard price reflects the standard of work, which is to say absolute garbage. I've done many a landscape design that I've eaten a pile of garbage on because it was expected that you wouldn't put much effort or care into the work
That sting of realisation you could have gotten more. It keeps me from starting for myself. And in sw always underestimate or misunderstand scope of job.
minimum wage per hour + material costs. If you have multiple people coming to you, overlapping, bump up the minimum wage portion until one of them drops out.
Those situations where you give them a number and they instantly say deal give me the paperwork to sign are good too. Next time you have a rush job with a big client....maybe its 2.5x (assuming all things equal)
Lemon jobs: I've been told to first rise the price by 200%, and if they still want in, raise it to 300%. And if THAT is still ok with them - go take it! You get paid 3x the price, and half of it is at least "pain and suffering money" (solatium).
Value your work at the start and you don't have to justify any increase. It's much easier to maintain the price it should be. If you lost the gig, then you've saved yourself wasted time and money.
I've often overbid on a job because the client seemed a pain in the arse and the job looked like a slog... it's funny how often they say yes and I end up with this lemon job I didn't want. Makes it worth while though... I guess
Bidding is always the hardest part. My bidding goes something like this. (The time it will take me to do x $60 per hour) + (Material + 10%) + Time constraints (varies from 10% to 200%) = X. Now take X and add another 10% and that is the quote.
And then double that! I bid on a gov't contract (which I got) a couple of decades back. I gave a fixed-price number, the second bidder was quite high because they planned on hiring me to do the actual work, at cost plus!
With new customers I provide a quote with my normal price and a new customer discount. This way everything is up front, with no embarrassing explanations about how you're going to be more expensive next time.
As a pub/club/festival musician who has made a bit of a local reputation as the "Yeah Man" guy, I WISH the "Rush" or "Last Minite" fee was automatically X2..... *text bleeps* "Yo! Ginger! You busy tonight?" *clicky response" "I have a thing until 7, but after that...... Umm... Nothing...." *Text Bleep* "Usual Doofus stonewalled us last minute, can you come folk us in the ears?" And wow, do I ever WANT to say yes... But maaaaaaaan, is there never any more than ZERO consideration for, I gotta scramble to get gear together, make sure batteries are fresh, make sure i can get there on time (or as close as possible) and that I can go from "I'm guy sat on my sofa" to "I'm guy entertaining a room full of people" Cause it's not like it's not work It's ALL making, right?
Not all benefits, profit, earnings are monetary. One needs to evaluate all of the benefits when looking at a situation. This is a lesson everyone should learn, as early as possible. I'm currently getting paid 50-70% what I could because I love my job, can go home every night to my wife, live close to my family, and have a good working situation. I make enough, but could probably retire early if I took a different job. But my quality of life during that time would be less.
You dared to dream. When others were content, you worked harder. When others settled, you reached higher. You are one of life’s inspiring characters. Enjoy the happiness from this great achievement.
What an astonishing, superhuman accomplishment. Your parents and teachers must be proud of you for this incredible achievement. Not all superheroes wear capes - some of them do the "First" thing after the age of nine. 👍
![Seungmin "그렇게, 천천히, 우리(As we are)" | [Stray Kids : SKZ-PLAYER]](http://i.ytimg.com/vi/kAzmhLHePqU/mqdefault.jpg)
![I.N "HALLUCINATION" | [Stray Kids : SKZ-PLAYER]](http://i.ytimg.com/vi/n5B5q1Hwt_U/mqdefault.jpg)
Totally agree with Adam on "tell them at the end that next time it'll cost more because you didn't break even". One other part of that which can happen (I wouldn't expect it as it's highly dependent on field/person/company/project/cost) is that the client might offer to tip or split the difference to help make you whole. A good client will understand that if you aren't making money, you aren't going to keep doing that work, so if they like you and they can afford to, telling them MAY help you recoup some of that loss. Don't count on it, but the time to bring it up is when you turn in, aka when they're at their happiest with you.
As a guitar builder I’m always balancing the cost of making my guitars with the actual income of musicians. I can make extremely complex expensive guitars but beyond a certain point the buyer shifts from musician to collector. A big part of the appeal to this line of work, for me, is putting them out into the world to make songs and music so I’m constantly striving to make my process more efficient so I can charge less without screwing myself.
You are an absolute legend, sir! As both a musician and a woodworker, I appreciate your consideration in to the fact that, as a group, we're broke as hell. Too many shiny toys. It's a rare gem to find something of quality that's both had care put in to the process and is economically equitable.
I've had some pretty good clients. I run my family business and one of our clients goes way back to my grandpa's day actually. We agreed on a set price per unit with some miscellaneous fees. Did the job, and I charged them according to the numbers. This client said to me "Well we came in under budget for our client, and we're basically the middle man, you're the one doing all the work, also we don't want our clients getting used to unusually low prices, so we've mailed your check out and you'll see it's rounded up to the next thousand" and I told him "It's no wonder you have the reputation for being one of everyone's favorite clients"
Dang I need a client like that.
A good client knows that a contractor that isn't making money won't be a contractor for very long.
@@Steve_Streza And building relationships is worth something. They don't teach that in business school, but it really does matter. If you treat a customer well, or even a supplier, they will be willing to let things slide when you really need them to. Favors earned and favors owed are a real thing.
One thing I've done when I want to give a client a deal is to invoice at the price it would NORMALLY cost, then add a discount to the invoice to hit the lower price. Helps the client show their money people what to expect to pay for future work.
I hate pricing things, especially on etsy where its the norm to overcharge by what I feel is an absurd amount...
See also ebay XD
I enjoy when family asks for professional work. I typically cut my rate by at least 50%… and still have them tell me it’s too high. The advantage is I’ve never had to do work for family.
Fam: "But I want you to work for free!"
Maker: "Oh cool I didn't realize, I have a LOT of landscaping that needs to get done, are you interested in working for free also?"
Fam: "Not really, I just wanted freebies from YOU."
that reminds me of something i got told when i was still in college, "however long you think a project will take, double it. Because you'll get half way in, realize a way better way to do it, and start over" Bill accordingly
I have also put the full cost in the bill, with a line item for the discount, making it clear that it was a discount, not the normal price.
As a business owner myself, I never underprice myself to get a client! It's more awkward to have to raise the prices on them later vs them always knowing roughly how much a job of a particular size will cost. Just sell them on the fact that they're paying you what you're worth , the quality of the work you're going to give them and what's fair per the current market. If they're looking for someone cheap it's not usually likely that they'll be willing to pay more later. They just wanted someone cheap and will continue to look for someone cheap. This is just my experience though!
The way Adam handled it too is perfect. If it's something you haven't done before and aren't sure on, or it's a passion project then it's OK to lower your price, but let the client know first that you're doing it because it's a passion or something you're personally connected to.
Freelancers, please, don't underbid yourself! It's not even about undercutting other artists as a lot , it's about undercutting yourself and your own worth.
Agreed. I'd also add that you should NEVER lowball a bid just to land a client, without having a good reason for doing so, and being able to justify it to your client. If they were me, I may hold you to your bid and the contract. Depending on how blatant the underbidding was, I may even consider litigating and seeking costs and damages. It's just one of those business practices that really annoys me. As does being on the other end, so dealing with purchasing managers who know how to get the best price on 1,000 bath towels, but have no clue how to price or value services.
For me, when I'm looking for services, most of my decision making is done during the bid process and contract negotiation. If someone's asking questions about the deliverables, I feel more comfortable that they understand the requirements and hopefully will deliver what I want. I'll often look at the bid spread and reject anything that substantially undercuts the other bidders, because it suggests either they don't understand or are intentionally lowballing. I'll sometimes ask why they're the lowest bid, and often don't get good answers. Like Adam said though, if the person explained it was because they really loved the project, wanted exposure or some justifiable reason, I'd be happier. Otherwise there shouldn't be any suprises when it comes to the final invoice. It's normal to hedge things like currencies or materials in contracts, and generally good practice to do so.
For me, it's far more important to have suppliers I can trust and rely on. I'm not looking to buy 1,000 widgets at the best price if I'm commissioning something special. The bid process can be a pain to run, and I'd much rather have a short list of business partners I can trust. I also follow much the same principles with my clients, ie if they expect annual price reductions, benchmarking etc, they generally don't stay clients. Sadly, price & margin squeezing is common though.
@@brolohalflemming7042 Exactly! You did a great job at articulating a lot better than I did. I've had clients reject my bids because I'm too expensive, but I'll usually look at what they got later and it's clear they went cheap.
In my early career as a graphic designer (30 years ago), the Graphic Artists Guild Handbook was my go-to. Still in print and on its 16th edition. Just a treasure trove of information.
Never do any work at a loss. But keep in mind that there is more to life than money, i.e relationships, mental health, job satisfaction, stretching a skill or ability, learning how do do something new. These are all returns for effort and work that are not financial.
This was good for me to hear right now. I recently started working in a new field as a freelancer and I don't really have connections in the industry. I noticed that every job I quoted was immediately accepted with no hesitation on the part of the client. after attending a trade show and talking to others in my niche, I found out I'm charging way too little.
I learned my lesson on discounting to attract a new customer. The price they get the first time is the price point they will expect forever. Sell on quality of service, never on price. If they can't afford it, negotiate to scale back the deliverables to meet the price they want. Discounting also devalues your work in the mind of the client.
Having years in working as a Massage Therapist with my own wellness co-op, I would offer a first time client discount - the clients know they are getting a discount at the outset, and I never cut corners on my work, so they see how valuable my service is for them. Its a great way to find clients that need my service and weed through the people who are looking for some other therapist. I specialize in accident/injury recovery and rarely do relaxation because my knowledge and talent leans toward problem solving.
This channel and your insights are gold for any persons pursuing things in the art field and creating
Once got mad a friend in LA who asked if I had time to do some photoshop work for someone but didn’t tell me who the client was, didn’t think this detail was important. Later learned the client had big money and would have been great to connect with.
The other thing you can do is give them the full price for the first job, and discount that price as a “new customer discount”. That way they get the price they want but they know the next job will be more expensive.
Pricing is complicated and involves a lot of factors. You might start with the number of hours of your time and what hourly rate you feel your time is worth, but then you need to factor it up to account for things you'd take for granted in a salaried job like paid holidays/vacation/sick leave, health care plans, etc.. Then you need to add in cost of any materials used and what it cost you to find them and get them where they needed to be. Presumably, you are using your own facilities, tools, equipment, etc., all of which you had to buy/lease/rent; some portion of those costs need to be factored in to your job price because you are spending money to maintain a shop, keeping the lights on etc.; tools wear out, equipment can become obsolete and require updating etc.. When you consider your own time, it's not just the job itself but the time spent on it from making the sale, doing paperwork, and collecting payments. Your invoice doesn't have to go into all that detail - just mark up your hourly rate, cost of materials, and subcontract costs by suitable percentages.
Your Ask Adam segments are my favorite. Your info is great and I just love listening to you.
Your experience and willingness to share the wisdom gleaned from said experience makes you a genuine gem in a sea of zirconium. I thank you for being you.
This is so useful! I've gotten a lot of this stuff right by luck rather than judgement, I am NOT a money person - people reallllllly need to be careful doing stuff for cheap/free because they love it, they want the experience etc... without saying THATS what they're doing at some point during or at handover/completion.
Two reasons, first it sets up potential clients to expect everyone will work for next to nothing, but secondly if you set yourself up for working for peanuts, you WILL burn out, you WILL hate the work you do, you WILL over-sell yourself, take on too many jobs and then let customers down and that sort of reputation for not meeting deadlines, not turning out the work, reallllllllly hurts you long term like REALLY long term. The internet means the world is a TINY place.
Question: What if you quoted for a new job and say added 20% to the quote to mitigate any unexpected outlay but then found that the actual end to client cost was less, Would you pay back the extra you added? Increase detail and finer finishing to complete at that quote, or something else?
As a builder of 38 years, people respect honesty and most will want you to make money, but sometimes it better to walk away from a job if the profit is not there. My uncle once told me, "Sometimes the best jobs are the ones you don't get."
I'm glad Adam has been answering questions about bidding gigs. Even though I'm in a completely different industry, I started applying his advice last year. Thankfully, no one has turned me down because my quote was too high. I'm slowly starting to get more comfortable asking to be paid for my work (I'll never be all the way there).
Don’t think I knew you were a graphic designer early on in your career. So cool to hear your answers. Still freelancing but looking to detour away from client work as I age and the landscape shifts with AI and younger talent willing to work for peanuts. This inspires me to move ahead with my “MythBusters”.
On underbidding by choice.
I term it as a different coin.
Clustered around the haunted attraction I work at there have been various times where the renumeration was below market value monetarily.
The value was covered in satisfaction, learning, creative outlet and other intangible but very real coins.
Never go cheap to get the job. All that does is demean yourself and your project. The customer will always expect the same in the future, no matter what you say.
In fact, coming in cheap can actually hurt your chance of getting the job. Personally, i generally know what things cost, because i do my research. And if somebody comes in below what i expect, they are either ripping me off somehow, or they don't know what they are doing. And neither case justifies me hiring them.
Expertise comes with a cost, if you want the best, you have to PAY for the best.
That doubling the fee and them saying yes without hesitation reminds me of the scene in Road To Perdition when the son asks for money... sets and amount and then asks "could I have had more" and Tom Hanks' character says something like "you'll never know".
This is reasonable to do it, and be honest. Sometime to evaluate the cost of a project is very hard. And when its your main source of income you need to keep the priced to a level that can support you.
On the other hand many people can not charge people as much as it should be, and undercutting they own price per hour.
But when you have people on a payroll its even harder.
Bespoke stuff cost A LOT. ask a company to do it and you can realise the cost rises exponentially
I'm always upfront about it. I don't quote the customers less, I put the actual price on the quote, plus one or more discounts for specific reasons. As in, I don't quote them 8k, I'll quote 10k, plus a 10% "regular customer discount" and a 15% "special discount" on top of that. Then I make it a point of telling them that I gave them the regular customer discount even though they're a first-time customer. That lets them know they can get that discount in the future if they continue bringing me business. The other 15%? It's an occasional thing. Next time, I'll quote them whatever it was minus the 10% regular customer discount, no special discounts. They'll ask about it, I'll say that was a one time thing, but "I'll see what I can do", then slap an extra 5% special discount instead of a 15%. Next time, no special discount.
Another thing that I do is I *never* quote for worked hours or any other time-based pricing. I didn't do that when we were a two-man operation, I don't do it now that we're a proper business and have dozens of people on payroll. Always act as a company, never talk to customers in the first person, even if it's just you. Saying "I" doesn't take into account all the costs you have. Don't quote them for 15 hours of work, quote them for the job, and calculate your hours internally. If you're unsure about how long it'll take, add a conditional clause on the quote. Say "I think we can get it done within this bounds, but if the job grows because of this or that thing we've talked about, then I'll charge you for this item". Call it "project extension" or something like that suitable to what you do. Then use that same project extension item every time the project grows. You calculate internally that that entails. If your project extension is 3 days, then charge that fee every time the project grows by 3 days of work.
I had an experience like that on a freelance 3D modeling job that more or less landed in my lap. The original scope changed and was more complex than originally expected, the guy was out of time and said do what you gotta do to get it done, so I did. Now I didn't know any better and we had a pre agreed to rate, but it was one of those moments where they said yes without hesitation and I could have asked for more. Of course it was partially a passion project for me and I printed the models for myself and they happily sit on my desk at home.
I was watching about some car restorations, and the guy was sending the cars in Latvia because the cost was 50% less than in USA, it takes a lot of time.
And you are asking your price, they say, but there this cost less, (imagine everything) , but the living/labor/material costs is less there.
But when you undercutting your job, clients chose you just for this reason, and when you increase your price, these clients will leave because they dont appreciate your work but your price.
good ideas to reflect on.
I ran a 2 color heidelberg press press for a while.
The owner I worked for alway bid the job to be able to reprint the job three times if there were mistakes or do overs to still brake even.
I used to do compliance for a call center working with non profits. On the side, I would fill out all their paperwork for various state govt agencies and they paid me as work for them freelance. One year they asked for more help...but upfront, they said they wanted it for free. That was the end of our relationship.
I'm reading a lot of comments here about never underpricing to win a client. I have an example where one of the jobs i'm responsible for was originally underpriced in order to win the job. That contract is worth close to 1 million. The thing WE NEW though is that scope change was going to be a massive factor over that life span of this contract. The client and style of job will always need extra work that is not specified in the contract. They won't go anywhere else because we have repour, familiarity and they are happy with the work that's being done.
In this instance the massive profit gained is because the work increases as the job goes on. There are also specific pricing in the proposal outlining "work outside the specified scope".
That is an example where under-pricing a job to get your foot in the door can pay massive dividends in the long term.
As a photographer, I've found everything that you've said to be true, plus some. Never underbid, unless you really love the project.
The best example of how to handle pricing for unknown projects and price increases is the story of how they built the scuba helmets for the film The Abyss. I saw an interview with the guys at Western Space & Marine who built the dive helmets that are not only props but also fully functioning diving gear. When James Cameron went to them they looked at his wish list of what they needed to do and originally quoted him some huge number like $50,000 a helmet. Cameron balked at that price. So the supervisor at Western Space & Marine called him back an said they could do it for $5000 per helmet. They got the contract. But that $5000 was only the cost of the mold work. Then a week later he called Cameron back and asked him "Hey did those need to be internally lighted? They did, well that's and extra 2000 a helmet." Cameron of course said yes. They went back to him ever week or so asking about an additional feature and adding on the cost. So by the time they were done, they had internal lights, external lights, microphones, fans to reduce condensation build up, air supplies, seals, and everything else to make them fully functional diving helmets that fit the needs of the production so you could still see the actors faces. The final price, $50,000 a helmet. Which Cameron's company paid. So by managing the initial sticker shock no only did they get the job, but the created a legendary prop that has influenced real world dive equipment and space suits ever since. True story.
I hate estimating, it's my least favourite part of armouring. Or any of the contracting stuff I do. Clients I do work for regularly know this and are willing to pay me hourly wage plus materials because they know I'm honest about how long a thing took me and I'll take the time to do the job right. When possible in the armour shop, we like to make a saleable display model and calculate exact costs for future reference and then add the "something went wrong" buffer...
I actually tell the customer right off the bat that they're getting an especially good price - I'll even put it on the quote as a line item, say, "introduction discount" or some such. That way I sidestep any kind of "well, it's not my problem that you miscalculated the cost on your part" argument (or worse, the customer thinks this but doesn't say anything). 😊
In the 70's the State of Iowa built a new statewide radio system for the State Patrol and local governments. When they went back to get more. The company tried to raise the price per unit. Instead the State went out for new bids.
I was really lucky with my first clients, but the last two put me off so much I'll never do for-hire work again. I'm seeing a LOT of people discussing what to charge now, and I see I've underbid myself so much. I think I'll just stick to doing my own work, which seems to sell well enough as is. (I became self employed just for that reason, silly of me to go back to working for others in the first place.)
I had a boss who was a master at getting clients with "lucky to break even" prices. Making the transition to charging what the job was actually worth on the next project... not so much. The company is not in business anymore.
"You have to screw up in order to know how to not screw up." Wow this hit home. I need a tattoo of this or something so I don't give up after a screw up.
there are times taking a loss is because of no work at the time to get some cash flow, that stops as soon as jobs start coming in. but there are those the price is lower and some the price is right and then theres the ones you really don't want but the pressure from the client is that great you put in a price that you hope will deter them but you still end up getting the job....
The institutional knowledge line is an absolute classic. I’ve written that down.
The bidding system has created a race to the bottom. There will always be someone willing to do it for less. You are much better off building relationships and trust with customers who know what a fair price is for your services, then simply negotiate a fair price with your customer.
Back when I worked for public housing there was always bidding contracts for the stuff we contracted out, and of course some people had a inside lead so knew what to bid, but 90% of the time we'd have to waste a week repairing their f ups and my mantra was "well that's what you get when u go with the lowest bidder, u get what u pay for"
Pricing is always tricky. There will always be someone who says it's too expensive and someone who is willing to pay more for the same job.
Increasing price for a later job makes a lot of sense. Would the company think it reasonable if a customer walked in expecting the same price for their goods or services in 2023 that they bought in 2022? Or even yesterday?
23 years always the price is the price, but I never cut price to get a job. Have had some people ask why it's simple, I know what I need to live they don't.
some people who live in your country really have amazing skill Sir
For me the issue is always that people have no problem assigning value to physical things, but tend to have real difficulty understanding that my time and skills also have value. I'm a miniature/model painter and the one thing I hear more than anything else is "You want how much? For a bit of paint? You must be crazy."
Now I have a stock answer: "You're not paying me for a bit of paint. You're playing me for X hours of my time, two decades of experience and a skill set you don't have. I throw in the paint for free."
I get that to the uninitiated, £200 for a display miniature can seem like crazy money, but if that miniature takes 20 hours, I'm not even making minimum wage.
Pricing is the most difficult thing to get right. It’s also the most important.
That "Left money on the table" feeling can feel like a real kick in the groin; whether it's getting a job bid accepted w/o question, or an eBay sale in under 8 hours of posting!
Remind yourself, "I thought this out ahead of time. I offered as high as I thought I could go, and would be happy if I got it." - enough is as good as a feast. Buuut.... keep it mind for next time!!!!
I too was a graphic artist for 30 years...the first 12, working for someone else, and the remaining years, beginning in 1996, self-employed...and back then, I would often turn to *THE GRAPHIC ARTISTS GUILD HANDBOOK: PRICING & ETHICAL GUIDELINES* for help on issues such as pricing.
It should also be said that there are some industries where the standard price reflects the standard of work, which is to say absolute garbage. I've done many a landscape design that I've eaten a pile of garbage on because it was expected that you wouldn't put much effort or care into the work
That sting of realisation you could have gotten more. It keeps me from starting for myself. And in sw always underestimate or misunderstand scope of job.
Solid Gold advice. Thanks dude.
minimum wage per hour + material costs. If you have multiple people coming to you, overlapping, bump up the minimum wage portion until one of them drops out.
Those situations where you give them a number and they instantly say deal give me the paperwork to sign are good too. Next time you have a rush job with a big client....maybe its 2.5x (assuming all things equal)
One of your most valuable videos! (Pun intended)
Thank you, this help a lot of people I think.
Lemon jobs: I've been told to first rise the price by 200%, and if they still want in, raise it to 300%. And if THAT is still ok with them - go take it! You get paid 3x the price, and half of it is at least "pain and suffering money" (solatium).
You have to build your portfolio, sometimes that means you're doing the gig for your future benefit.
money is not the only thing of value you can get from a job.
The donut hole client/maker relationship. Throw the maker some freebies to get them to come back for the paying jobs. Love it!
Value your work at the start and you don't have to justify any increase. It's much easier to maintain the price it should be. If you lost the gig, then you've saved yourself wasted time and money.
I've often overbid on a job because the client seemed a pain in the arse and the job looked like a slog... it's funny how often they say yes and I end up with this lemon job I didn't want. Makes it worth while though... I guess
Fast.
Cheap.
Good.
Pick two.
Bidding is always the hardest part. My bidding goes something like this. (The time it will take me to do x $60 per hour) + (Material + 10%) + Time constraints (varies from 10% to 200%) = X. Now take X and add another 10% and that is the quote.
And then double that! I bid on a gov't contract (which I got) a couple of decades back. I gave a fixed-price number, the second bidder was quite high because they planned on hiring me to do the actual work, at cost plus!
With new customers I provide a quote with my normal price and a new customer discount. This way everything is up front, with no embarrassing explanations about how you're going to be more expensive next time.
I see.
why, on occasion do I open one of your videos and the volume is at max, which for my PC is tremendously loud....WHY!!!!???
Yes adam savage!!
Resume building, skill demonstration, bragging rights and just to show you can do very complex difficult work.
As a pub/club/festival musician who has made a bit of a local reputation as the "Yeah Man" guy, I WISH the "Rush" or "Last Minite" fee was automatically X2.....
*text bleeps* "Yo! Ginger! You busy tonight?"
*clicky response" "I have a thing until 7, but after that...... Umm... Nothing...."
*Text Bleep* "Usual Doofus stonewalled us last minute, can you come folk us in the ears?"
And wow, do I ever WANT to say yes... But maaaaaaaan, is there never any more than ZERO consideration for, I gotta scramble to get gear together, make sure batteries are fresh, make sure i can get there on time (or as close as possible) and that I can go from "I'm guy sat on my sofa" to "I'm guy entertaining a room full of people"
Cause it's not like it's not work
It's ALL making, right?
Fine once you have money enough to reduce your prices and not going to starve!
Not all benefits, profit, earnings are monetary. One needs to evaluate all of the benefits when looking at a situation. This is a lesson everyone should learn, as early as possible.
I'm currently getting paid 50-70% what I could because I love my job, can go home every night to my wife, live close to my family, and have a good working situation.
I make enough, but could probably retire early if I took a different job. But my quality of life during that time would be less.
Is the Taxes talk next? Get enough freelance to pay the bills, but the taxes 🤬
why dont you just put in the first contract 30% off then on next contract there is no 30%
As a estimator I found that
Actual labor cost +
Actual material cost= Y
Y x 1.66= cost proposal
Works well
rush job? *kaching*
The age old question, does the client REALLY have to pay for your time?
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You dared to dream. When others were content, you worked harder. When others settled, you reached higher. You are one of life’s inspiring characters. Enjoy the happiness from this great achievement.
@@Mike-DuBose good job
What an astonishing, superhuman accomplishment. Your parents and teachers must be proud of you for this incredible achievement.
Not all superheroes wear capes - some of them do the "First" thing after the age of nine. 👍
Genius
Crying tears of joy