[Sam Cornelis]

Thanks for sharing that Todd, that’s interesting to know.
How did you raise your rates? Was it only for new customers, or for the existing ones as well ? If so, any tips about how to communicate that are welcome.

Actually, we are drifting to a topic about which you don’t find much information on the forums. There are a lot of posts that deal with beginner’s questions, but not so many that deal with growth.

For instance: raising rates vs. loosing customers, hiring the first employee vs. collaborating with other freelancers. You can find all information about the legal and HR consequences (eg accountants are a good startes) – but how do you deal with that in your business. For me there are 3 mayor concerns at this time (I guess you already figured out the phase I am in right now):

1. Working freelance = focus on what you like the most: be creative and being able to take whatever may come and looks interesting. Being responsible only for yourself and your family.
2. Growing into a bigger company = great part of your time dealing with personnel stuff, being responsible for other peoples job (is also a good thing: you create jobs), on the plus side: more continuity and maybe bigger projects.
3. Growing = bigger overhead cost, so you have to raise your rates.

Any thoughts about this are welcome,

Sam

– I have read the entire internet, and I am feeling a little bit bored, so I started to reply to interesting forum topics.

[Sam Cornelis]

Well, yeah, that is how you calculate or make an estimation of the costs.
But the question is, what do you do if you get better over time.

Let me get back to the initial question in this thread: making training videos with screencaptures. This first job took 43 hrs. Suppose he starts doing this kind of job on a daily basis. It could be possible that he can achieve the same result in 20 hrs after doing this for a year.

What should he do then: lower the price for this project ? That wouldn’t be fair for the gained experience, and the customer will likely find it strange that he had to pay double a year ago.

Now, what I do in such a case: I deliver a better project. I use the extra hours to make something extra, like an extra animation or more spectacular titles. The customer gets a better project for the same price, it may even give you a reason to ask more for the project and most important: it is more fun to do.

Delivering more for the same price puts you ahead for the competition, but then they say: you are undercharging … and then we’re back to the beginning …

It is not that simple as it sounds.

sam

– I have read the entire internet, and I am feeling a little bit bored, so I started to reply to interesting forum topics.

[Sam Cornelis]

I have been thinking about this a lot lately, as should everyone do if you take yourself seriously.

In every discussion about rates, most people don’t talk about how much time it takes to complete something, neither do they talk about the creative talent. If you are a video magician who can do spectacular stuff that everyone loves in the blink of an eye, twice as fast as anyone else and you charge only by the hour – you would make only half as much as the regular ones with the same rate. That’s no real reward for your talent.

The magician could double his rate, but as people mostly compare offers based on the hourly rate, this is not a very commercial approach.

So what can he do ?
He can get as many jobs as possible to fill his agenda, then he makes more money. But as you all know, it is not that easy to mentally switch between too many different creative jobs in a day.

He can make an estimation about how many hours it will take – this estimated amount of hours is about the same as his competitors, and charge by the project in stead of charging by the hour. In this case, he always has to check back how much he actually made (or lost) by the hour, to make more realistic quotations in the future.

It is a little bit dangerous, but he can build in safety nets in his offer for unexpected stuff.

Actually, a lot of thoughts, but I don’t have a real answer. How do you guys deal with the amount of hours needed to complete something, as this is a significant factor in the price the customer has to pay?

On last thing … it is a very different situation if you are not a freelancer, but work in a company with personnel. In that case there is a good knowledge in the company about how long it takes on average to complete a typical job. So an hourly rate with a good time registration will do. The boss can put the magician on jobs where he can make the most profit out of him. And the magician, he should negociate a good wage.

Sam

– I have read the entire internet, and I am feeling a little bit bored, so I started to reply to interesting forum topics.

[Sam Cornelis]

Still … 230$/hr … seems a lot to me. No, let me rephrase that: I would be very happy if I find clients that pay me that rate for this kind of job.
If I understood it correctly, it is about screencapturing, maybe adding titles and do some voice overs. All of this is basic camtasia/captivate- or something alike – stuff. I don’t see much VFX here.

Of course, I completely agree with you: the rate should be agreed before starting the job.

– I have read the entire internet, and I am feeling a little bit bored, so I started to reply to interesting forum topics.

[Sam Cornelis]

10k for a screencapture job that takes 43 hrs ?
Wow, I am way too cheap.
Hm

– I have read the entire internet, and I am feeling a little bit bored, so I started to reply to interesting forum topics.

[Sam Cornelis]

Just in case anyone is interested: it also works with Premiere Pro CS4.

Thanks Ken!

– I have read the entire internet, and I am feeling a little bit bored, so I started to reply to interesting forum topics.

[Sam Cornelis]

A few years ago I was in exact the same position. Everyone in my department got laid off – they were going to outsource everything. I offered them that I would continue the job on a freelance basis. They were happy with this plan, because they could keep the knowledge inhouse (sort of – remember: the entire department got laid off), and I could dare to make the jump to my own company with this prospect.

And I did make the jump. But looking back, I didn’t do that much work for my old employer. There were just too much other projects. However, the idea felt safe.

What I want to say is: going freelance means you have to jump in a lot of things you don’t know how it is going to work out. Almost everything can be negotiated, as long as the idea is good for every party. I like the idea that you want to propose you do only the video work for the car dealership. That will make the search to a graphic designer/webmaster easier. Because there are more graphic designer/webmasters than there are graphic designer/webmaster/videographers.

If I read your posts, I get the feeling that you know what you want to do. I also see that you know how to discuss the things with every party involved … so, you’ll find the answers you need. Good luck.

– I have read the entire internet, and I am feeling a little bit bored, so I started to reply to interesting forum topics.

[Sam Cornelis]

Oh yeah, can’t you work freelance for the car dealership?

– I have read the entire internet, and I am feeling a little bit bored, so I started to reply to interesting forum topics.

[Sam Cornelis]

I would like to add one thing to the reply above: it was my experience that you can not combine freelance work with a fulltime job. The rest is a personal choice as stated in the reply above: what do you want the most, freedom or some security. I found out that there is more security in freelance work than you might expect. After a while, there is always a client that needs something. The diversity you get when working freelance is a big bonus to me. But that’s personal.

– I have read the entire internet, and I am feeling a little bit bored, so I started to reply to interesting forum topics.

[Sam Cornelis]

Mark, you’re right.
I’d like to add that, when you are a starting freelancer: buy the stuff, the moment you are starting on a project where you are going to need it. There are a lot of nice things to buy – but if you don’t have a real project waiting for it, don’t buy it yet. Eh, does that sound to obvious ?

– I have read the entire internet, and I am feeling a little bit bored, so I started to reply to interesting forum topics.