How to be at peace with your flat fee pricing

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In two previous posts for Millo, I presented the idea of turning estimates into flat fees and also, how to determine that estimate in the first place. In this post, I’ll be discussing how you can live with, and be at peace with your flat fee pricing.

Flat fees in light of scope creep

In the comments for my first post on turning estimates into flat fees, I was asked by a reader, “What about scope creep?”

It’s a reasonable question and a common fear when charging a flat fee.

You’ve determined your price for a project, but then the client changes the scope.

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So now the project is more extensive. It’s going to take longer and you are going to be working harder.

How can you be at peace with a flat fee price if there’s a chance that the project’s scope will change?

The inevitability of scope creep

First of all, when it comes to scope creep, expect it. Just as error is human,  scope creep is inevitable and will come along for the ride of all your projects.

Humans are going to make mistakes. They are also going to change their minds, reconsider thoughts, and grow ideas — right in the middle of your project.

Don’t be surprised when the scope of a job changes, assume it will. Anticipate it, accept it, and do the following to address it.

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Build some scope creep into your original fee

In the last article, I talked about building “Murphy’s Law” into your fee. Assume that the job is going to be bigger than you think it is, and charge for it up front.

Padding your time estimate will take into account the scope creep that’s going to happen — not only in terms of price, but in terms of scheduling as well.

As I mentioned in my other post, freelancers should always underpromise and overdeliver. Padding helps that happen.

How much you pad is up to you. Personally, I think adding another 10 percent to a project in terms of both time and price to your “base” estimate is appropriate.

Once you’ve worked on such projects and with certain clients more, you’ll get a better feel about how the projects run and how your clients operate, and what sort of padding percentage is appropriate.

Spell out the project

Even with padding built in, boundaries must be set for what will and will not be included in a project. You must spell out the project to your client.

Doing so means proper communication and full disclosure up front. Be it a formal contract or an email, there should be something in writing before the project begins that outlines exactly what your client is going to receive for his or her money.

Make it clear from the start that, if your client goes beyond certain parameters, he or she will pay more for that work.

It’s your call as to what those parameters will be, but those parameters must exist and must be communicated to your client before the project starts.

Flat fees are appropriate for projects and tasks that are finite. You must determine what “finite” means. Anything beyond that gets charged additionally.

How to charge the client if those lines are crossed is also your call. Here are your two options.

Charge by the hour

If time spent and an hourly wage are important to you, feel right, and make the most sense, you can say that the meter will turn on and you’ll start charging by the hour if the job surpasses its scope. That’s one way to handle it.

Charge using “mini-fees”

Another is to create what I call, “mini-fees” for chunks of the project that are being added.

For example, if I’m about to lay out a book, and the manuscript I receive (which was supposed to be 500 pages) is now 200 pages more than the client originally anticipated, I could say, “Jack, as per our agreement, I’m going to have to charge you by the hour now to lay out any pages that go beyond the original 500 pages of manuscript.

Or, by using mini-fees for tasks, you could instead say, “Jack, I have to charge you more for these extra pages. As per our agreement, each addition page I have to lay out beyond the original 500 pages will cost you $X per page.”

In this scenario, you would charge a flat fee for each new page.

As with any fee, both you and your client will have a much better idea of what the total additional charges might be rather than if you charged by the hour, as time can be much more nebulous than tasks.

Charging for scope creep

Addressing scope creep in this manner is an easy and obvious way of handling scope creep, but also it appears that scope creep terrifies freelancers.

I have to believe that’s because they are afraid of going to the client and saying, “This is going to cost you more.”

However, in my eyes, scope creep simply means more work and more money. I say, bring it on!

In my many years of freelancing as a creative, I’ve never had a client balk at being charged more when it’s obvious that he or she has increased the project’s scope.

In fact, many have come to me, saying, “I know this is going to cost more, but…”

I did have one client who was disappointed when scope was not increasing, but the price was because of an underestimation of time.

In fact, it’s because of this situation that I decided to offer flat fees in place of estimates. 

How clients will react

Yet again, it comes down to being crystal clear with your communication before your project begins.

Leave nothing to be assumed. If your clients know that they will be charged for changes in scope, one of three things will happen:

They will check themselves. Most clients don’t want to pay more, so they’ll be more selective about making additional changes or doing anything that might increase costs.

They’ll pay the additional cost. Of course they will, if they really want those additional changes to be made. If you want more, you have to pay for more — pretty basic economics at play here.

Most business people get the concept. If you’ve made that clear, there won’t be much room for argument.

They won’t pay it, and they won’t get it. If they refuse to pay but still want the work, then you refuse to do the work.

Offer instead to pack everything up and hand it over, after they’ve paid your final fee, so that someone else can do the rest of the job.

They won’t want to do that. If their time is valuable — which it is — the last thing clients will want to do is hunt down a new creative to finish the job. It’s worth their while to stick with you and pay whatever additional charges there are — per your written agreement, of course.

Feel the fear and do it anyway

Sure, it’s uncomfortable to tell your clients that they’ll have to pay more, but you must. Feel the fear, and do it anyway.

As long as you’ve been clear upfront, you’ll learn quickly that there isn’t anything to fear. After all, in this situation, it’s really you, the creative provider, who has the upper hand. You’ve got the power.

Feel good about your fee

It’s not any different with creative projects. Clients want to “feel good” about the price they are paying. And it goes both ways.

As the creative provider, you also want to feel good about the amount of money you are going to make.

I truly believe that, for many freelancers, that good feeling comes to us when we believe our time is being valued as much as the project itself.

I also believe that this might be a reason why some freelancers stick to an hourly wage over flat fees.  They believe they are getting more for what they do, because for them, time is important.

Is that true? Is that “real”? The answer to that question is moot, because the feelings are real.

The ultimate goal, then, in creating an estimate and setting a fee, would be to ensure that both sides feel good about the price.

Clients want to believe that they are getting their money’s worth. We freelancers want to ensure that we are being paid what we are worth.

Set it and forget it

In order to be at peace with your flat fee prices, I strongly suggest that once you have determined a fee for your project, you “set it and forget it.”

In other words, once you decide on a fee, intentionally feel good about it. Don’t look backwards and second guess yourself once you’ve sent that fee to your client.

And definitely don’t question that fee while you are working on a project.

Instead, feel confident that your fee is the right fee for the job. Accept it, feel good about your client accepting it, and then forget it.

If you still have any doubts about the price, change it before you offer it. Remember that you will still review your project when it’s completed, and at that point, you can always consider creating a higher fee for the next project.

But once you are on the project, what’s done is done. As a freelancer, you’ll have much more peace of mind if you simply accept that the fee is your fee — end of story.

Do you have difficulty being at peace with your pricing methods? Let me know in the comments section!

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About Patricia LaCroix

Patricia LaCroix has had a career in marketing and publishing for longer than she cares to admit. But, despite that it reveals her age, she’s willing to say that she’s been working a creative business from home in some way, shape, or form since 1986. Her creative skills run the gamut and include expertise in both visual and written forms of communication. Patricia’s entrepreneurial yet giving spirit drives her to help others learn how to work from home and create their own “lifestyle” careers.

 

More about Patricia’s business: LaCroix Creative is a full-service creative business in Chicago’s northwest suburbs. Patricia leads a talented team of associates who assist her in creating effective graphic design and written content — in print and online. Decades of experience — partnered with caring, personal attention — make LaCroix Creative especially well equipped to serve solopreneurs, start-ups, educators, coaches, healthcare professionals, and self-publishing authors.

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  1. Great article, Tricia! Loved this: “Feel the fear, and do it anyway. “