Crowd in japan

How I charge for projects

As a consultant and freelancer there is almost always an issue when it comes to how much to charge for my work. Often I’m asked “how much is it for a new logo?” or how much I charge per hour.

The range of different kinds of customers and projects make that answer difficult as I work with everything from small early stage startups to global companies. Doing everything from a quick logo to a full project where I’m in charge of basically creating a new product or brand.

Also, of course it depends on my situation. If I’m swamped with work, which I usually am, I can be a bit more picky with what I do.

Depending on the client it can also be interesting to work with a reduced fee and have some kind of stake in the company.

Time is precious so know your value

But as a starting point I have a base charge per hour.

If it’s a project where it’s possible to estimate the number of hours it’s quite easy. Either I count the hours or we set a fixed project fee based on the estimate.

Estimates are always a gamble so I need to put in some air in it to protect myself. I could still be wrong about the time so it can go either way.

But I think in the end a customer pays for the result and not the exact number of hours worked. At least that’s how it should be. In some ways you pay for my experience as well.

If the client is a big no nonsense company I charge full price on those hours. If it’s a smaller company or startup the story can be different. Especially if it’s something I see as really interesting and where I will learn stuff from working with it.

There have been times when I have done stuff for free even. At least as a start. But it’s not something I recommend as when you do things for free a lot of times people don’t put as much value in the result as if they pay for it.

Working for shares and being committed

Running my own company and being able to contribute in many ways to the early stages of a startup opens up the possibility to both work for shares or reduce my fee against ownership. Both which I have done.

Calculating ownership is very tricky as there is always a huge risk involved in that the company might fail and the shares will be worth absolutely nothing. So I have to take into account both how much I believe in the idea and the team, how much the idea makes the world better in some way, how far the startup is in it’s journey, how much my work can affect the outcome and also what kind of discount I give on my hours. Or if I get paid at all.

I have done jobs for free where the startup have failed. But I have also gotten paid, plus shares that have become worth a lot when the startup was sold. You never know.

The logic I use when charging for my work

To summarize this is how I think:

Is the job well defined and the client a “normal” business that can pay for quality? Then I set a project fee based on my estimate of number of hours and the ambition of the client including a certain number of iterations and meetings.

If the job is not well defined and might go in all kinds of directions or the client feels unsure of what they want at all I charge per hour but we might agree on a span of hours but not exact scope.

If the client is a startup that won’t open up for ownership I might give a discount if I think the job is interesting, changes the world for the better, or if I have the opportunity to learn something new. At least if the discount is a requirement for getting the job and I want to do it.

If the client is a startup that opens up for ownership it all depends on how many percent I can get, what stage the startup is in, the idea of the startup, how much I believe in the team and if I can get something paid to minimize the risk involved.

Also read The power of saying No