Deliberate Freelancer #91: All Things Pricing: Project Rates, Day Rates, Retainers and More, with Jennifer Duann Fultz
Today’s guest is Jennifer Duann Fultz from Bloomington, Indiana. Jennifer is a freelance writer and business educator specializing in creating online courses for business owners who want to leverage their expertise through scalable information products. She is also the founder of Chief Executive Auntie, a blog and podcast where she helps Asian American and other BIPOC freelancers and creatives earn more money.
Jennifer thinks of money as a tool. It’s a proxy for time and expertise. Money is a way to achieve your goals and live out your values. Jennifer took a MoneyType assessment and discovered she is a “producer,” which means she likes to earn and save money. But her second type was “nurturer,” which shows that she likes to use money to help others. That helps as she thinks about things like charging nonprofits less and giving money to charity.
Jennifer takes several things into account as she considers whether to take on a project and how to price that project. First, she considers the time it will take and the “opportunity cost” — what she won’t be able to do, both in her business and personal life, if she takes on this project. She also considers the value she is providing to the client.
Jennifer generally recommends against hourly pricing because it punishes you for being good at what you do. If you work faster, you earn less money. And it doesn’t take into account the value you bring, nor all the time it took you to gain your expertise. It also turns you into just a commodity.
Jennifer has been aggressively tracking her time to determine how long certain types of projects take her, which helps her set better project rates and not undercharge. In determining a rate, she also considers the time it takes to create that initial proposal as well.
Jennifer jokingly recommends a “tortoise fee,” which is the opposite of a rush fee. It’s for those times when a client is slow to get you the content you need or respond to emails. If you haven’t been actively working on a project, it takes time and mental energy to get back up to speed. You should charge for that, if you can spot it ahead of time.
Jennifer always sleeps on a quote, instead of rushing to get the proposal out the door. She looks at it again with a fresh perspective the next day. She never lowers the price after sleeping on it, and it also gives her time to reconsider if she’ll resent anything about the project, including a price that is too low.
Jennifer talks through charging clients “day rates” and for “VIP days.” She also talks about monthly retainers, which can be great for stabilizing your income and workload. However, they can also reduce your flexibility for other projects.
A retainer can be based on a fixed amount of time or a fixed scope of work. Retainers are meant to be paid up front — they are paying you to keep that time available for them. Include in your retainer contract how much notice they have to give you before they cancel the contract.
Service packages are a set scope of work or deliverables. Jennifer has a “website in a day” package. To create a service package, first choose a specialty, then the final deliverable. Work backward to set up the scope of work that it would take to get to that deliverable.
Jennifer also has a project minimum — she won’t take on projects unless they earn her that set amount at minimum.
Biz Bite: You cannot fix what you don’t track.
Resources:
Download Jennifer’s Freelance Rate Calculator
Episode #66 of Deliberate Freelancer: How to Price Your Projects
Episode #5 of Deliberate Freelancer: Track Your Time for Better Efficiency