Simple Pricing Tactics for independent workers

Focus on Outcomes. Not Hours. Care about your Work.

Where to Start?

A first principle for pricing is to prevent from working at loss. In order to avoid this, you need to figure out what are your usual expenses, how much it costs you to work and evaluating how much you can work to finally deduct what is your minimal viability. These key elements are covered in deep in a previous article on “How-to Set your Price?”.

What is an Independent Worker?

An independent organize his work, allocate resources and manage risks autonomously in order to deliver a solution in time.

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Being an independent is not another form of employment. Don’t get confused between the two. As an independent, focus on outcomes and adding value. Not hours. Care about your work, make sure you can deliver a solution that you feel good about. Do the work well, it is enough.

Renting your time is an incentive for micro-management from your client, creates a hierarchical relationship that should not exist between a client and a supplier. Being paid per hour is like being an employee without the benefits of it. When you rent your time, you implicitly accept to reduce your expertise, know-how, experience and talent in favor of a certain number of hours of execution. Therefore you make the decision to deny your signature, your creativity, your smart productivity and the quality of your work. You accept to be compared to any other worker by the hourly rate. It’s hard to start off on such a wrong foot.

You are not an employee! By the way, you won’t get any of his benefits.

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An Independent at work!

So it’s on you to know what your work is worth, to set the right price and to send a proposal that outlines the scope of your mission, your operating terms and payment conditions.

Alternatives to Hourly Billing

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alternatives to hourly billing

Daily or Weekly billing

Yes, it’s still a time based billing but you get to organize your time autonomously and to work under your terms. It is useful in Services and Consulting. There is normally no guarantee of completion, since you don’t necessarily have enough information when you start to define an end objective. The proposal includes availability, ways of coordination and the frequency of meetings. The overall duration and terms need to be defined in the proposal and agreed upon in an operating agreement. It is very important to maintain a positive cash flow model, so make sure to be paid in advance or at least to get a deposit before starting.

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Retainer or Monthly Fixed Fee

A retainer agreement is perfect when you work repeatedly for a client, while maintaining a healthy relationship and a mutual trust. In this case, you will trade some visibility on your side for your availability, knowledge on on-going projects and a follow-up for your client. It’s a practical agreement with a simple monthly fixed bill to be paid in advance. The monthly consulting fee includes your availability, inputs, monthly average work load and the follow-up. The agreement duration can start by three months and be up to a year.

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Retainer Agreement

Project based billing

This approach can work very well for clearly defined projects. You need to be able to evaluate fairly the amount of work to be done on your side per project’s phases. In this case, the proposal has to include the detailed specifications of the project, as well as the scoping, a resource request and an overall planning. For an experienced independent worker or an artisan, it is really doable to know in advance what it takes to make or develop what has been ordered. The resource request and project’s related expenses have to be covered by the client and a deposit is very important to secure the end payment. Deposit has to be mandatory, if you client isn’t ready to pay 50% of the total cost of a project, why on earth would he become incline to pay 100% of it?

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Respect your work, price it accordingly!

You deserve to be paid fairly for the quality of your work and the solution you offer. This respectful attitude starts with you. Try from your very first clients to avoid working at loss. Know your costs! and your viability point.

If you decide to work pro-bono (“free of charge”) always provide the “usual” terms and conditions and pricing for references. That way, your friend is more likely to respect your work, your time and show more commitment. If he is happy with your approach and work, he can then recommend you by mentioning your “usual” pricing. Nothing is free, but nobody says that you can not give efforts when you feel it is appropriate.

Normally you shouldn’t work for the same client more than four days a week, as the administration of your business relies on you. It is likely that you will need at least a day to take care of your business, deal with communication and prospecting other leads. Try to secure a minimum of two clients in order to avoid relying only on one.

Be creative, there is not one only way to bill, adjust your proposal and billing per client and per project. Don’t copy the prices or rates from peers, you don’t know their costs, what exactly includes their proposal…

Do your due diligence by evaluating your monthly recurring costs, the cost of working from your form of business and location, the setup costs… So that you can evaluate a pretty accurate viability point. In doubts, read “How-to Set your Price?”.

For more, don’t hesitate to check out kristofberg.com

Written by

Author, educator & coach. Plant-based 🌱 since 2005

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