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Sample freelance invoice for Product Management

in this video you're going to learn five factors to consider when pricing freelance projects six popular pricing models that you can try how to charge more how to find out the market rates of freelance services and how to determine a sustainable pricing model that works for you now here are the five factors to consider when pricing your freelance projects the first factor to consider is you take into account your skills your experience your level of professionalism your credibility and how much value are you able to provide to the client for example if you work faster or produce better quality work than your competitors charge more if you are more professional and more reliable than your competitors charge more if you have more years of experience that allows you to be more efficient and come up with better Solutions quickly charge more because all these factors contribute to the value that you're bringing to your clients now the next factor is the work take into account the project scope what's included what's not included how many rounds of revisions would there be how complex is the project is the timeline very urgent is the project interesting to you or is it okay or boring the next Factor would be your client how is the level of professionalism of your client is he or she easy to communicate how responsive are they especially when giving feedback and what is the size of the client the next thing to consider is your competitors take Market rates into account so that you know how competitors charge the client and the last factor to consider when you're pricing your freelance projects is to determine your pricing model the first pricing model that is often used is hourly pricing you can calculate your hourly pricing like this in most cases I do not advocate for this pricing model your work should never be valued solely ing to the amount of time spent on it just because you work on something quickly doesn't mean you should costs less but this pricing model is not all bad it depends on your goals because pricing is really subjective now the next pricing model that you should know is fixed fee pricing which means we are charging based on output you price the Project based on the scope and the complexity of the work and then estimate the hours that you need to complete it multiply this by your hourly rate now this pricing model is reasonable especially when you're starting out as a beginner the next pricing model is called Performance Based pricing this means you're charging based on your performance you don't get paid unless you get results this pricing model keeps you and your clients accountable but it could get really tricky let's say if you're designing a website for a client and charge based on how many people click on the buy now button on the website that wouldn't be fair because the click-through rate of a button could be affected by your designs the pricing of the product marketing or even the website's performance so in order for this pricing model to work there needs to be a systematic way to track and measure performance that is transparent to both you and your client so that you are paid fairly the next pricing model is value based pricing which means you're charging based on the value and the impact of the work on your clients business let's say a hair salon website generates twenty thousand dollars a month and you are designing a better user experience for the website you predict that the impact of your work increases the number of cooking spicy 20 per month which is equal to four thousand dollars uplift in Revenue multiply that by 12 months it equals to forty eight thousand dollars increase in annual revenue if you price your value based on twenty percent of the increase in Revenue that you've generated for your client you will charge nine thousand six hundred dollars for your services but of course this is just a calculation not a guarantee now the point of this pricing model is to reframe your mindset so that you stop charging based on time and effort but based on the value and impact that you generate for your clients this is a fair pricing model but can be a very tough idea to sell to the client the next pricing model is retainer based pricing which means that you're charging a recurring fee for ongoing work or support this gives you stable income and you will build long-term relationships with your clients for this pricing model to work there are three things to keep in mind number one set clear expectations with the client things like what is included what's not included how soon do you deliver the work to your client when they request for one how is your availability like do you need to be at the client's office ETC number two always sign a contract with a client if you're on a retainer and outline everything you have agreed in the contract number three build trust with your client make it clear to the client that their investment in the retainer is worth it so be professional be responsive and track all the work that you've completed the sixth pricing model is subscription based pricing which means that you're charging a recurring fee for a set of services a great example for this pricing model is design Joy it is run by a single person called Brett this business generates forty thousand dollars per week in recurring Revenue as of January 2023. this equals to 2 million dollars in Revenue per year but here's the catch if you're a beginner I do not recommend this pricing model as it can get really overwhelming and not everyone can sustain with this pricing model now the million dollar question is how are you able to charge more for your freelance Services here's an example why are people willing to pay for Apple products when they cost more than its competitors it's simple apple has built a strong brand image and reputation for themselves as a result Apple products are perceived to be worth more than their market value regardless of their specs so to charge more increase the perceived value of your services in the eyes of your clients you do that by achieving these three things number one quality there are no shortcuts to this be really good at what you do increase your level of professionalism pay attention to details once you build a strong skill set nobody can ever take that away from you the second thing is credibility be trustworthy make yourself known in the industry and be consistent with the quality of your work when people think of looking for a designer or marketer they think of you the third thing is scarcity humans have strong scarcity bias the more difficult it is to acquire something the more we value it if you have unique expertise in a specific industry and only takes on a limited number of clients or have a strong reputation for producing high quality work clients are more likely to pay more for your services because you are scarce so let me ask you this there are at least 1 million product designers in the world how do you differentiate yourself from the others give yourself time to figure this out as a freelancer or a business stand out from the competition and clients would be willing to pay more for the perceived value that you bring clients will choose you you have the upper hand when negotiating for a rates Market rates and competitors then become less relevant if you're looking to save time and become more efficient as a freelancer my creative freelancer kit can help you with that the notion dashboard lets you manage projects tasks track your finances invoices and so much more but wait this is not just a notion template it also comes with resources like client onboarding checklists email templates Discovery questionnaire NDA templates project proposal templates and much more this kit comes with free updates for life which means that I will improve upon this product from time to time your support also helps me to sustain as an educator so that I can continue to teach everything I know for free now let's talk about how to find the market rates of freelance Services first of all do not price your services based on what you see on freelance marketplaces like Fiverr and upwork on these platforms web design costs as low as 35 dollars but we should never undervalue our services instead we should be compensated for the value we bring to our clients so my friend Ben created a tool called insta price it is a good reference point to find out how much other Freelancers charge for example this is how much a web design project costs on average if you include all these services it is a paid tool and you can find the link in the description there are a lot of pricing models and so much to take in so which one should you go with usually we go with fixed fee pricing or value-based pricing the amount depends on these factors now you don't have to stick with one pricing model because every project and every client is different you also don't get to decide the pricing model all the time because some clients already have a set pricing model in their mind the good thing is as you get more familiar with freelance projects you will know what to do pricing is very subjective when I started out as a freelancer I just went with whatever the client's budget was because I was in experience and desperate to secure the project so don't worry about making a few mistakes here and there everyone starts somewhere and every mistake helps you get better at what you do lastly I want to leave you with this remember to do your own research don't blindly follow what everyone else is doing as long as you're getting paid what you're worth and making a profit you're doing great I honestly believe that to be great you just have to do great work repeatedly the rest will fall into place if you enjoyed this video I'm sure you'll enjoy these as well here's my seven step freelance process that helped me quit my job here is a guide on getting clients if you're starting from zero here's how I find inspiration for app and web design the lessons I've learned while building nine income streams thank you for watching and I'll see you in the next video bye [Music] thank you