Keep fees flexible to maximize your businessTeacher: David Perlstein
Free agents always ask, "How much should I charge?" Aside from the obvious, "As much as you can," I answer that fees or hourly rates depend on your industry, experience and expertise. But just as important as what you charge is how you charge.
Navigate the marketplace
Every fee (or hourly rate — I'll use "fee" only from now on for brevity's sake) is negotiable. In the souks (marketplaces) of the Middle East and North Africa, haggling is a way of life. It's the same in North American business.
Even in the same company, two clients might pay different fees for exactly the same project. They'll measure value by their available budget, the project's urgency, a perception of your abilities and even whether they had a good breakfast.
Over time, you'll find that similar jobs earn fees within a given range. For example, I usually estimate writing a direct mail package at between $2,500 and $3,500. Sometimes, I charge more for a difficult project or less for an easy one.
You should maintain flexibility because:
Take into account the size of the company and its budget
Social service agencies often establish fees on a sliding scale based on ability to pay. Smart free agents do the same. Create a three-tiered grid with a sliding scale for large, middle-size, and small clients so you always get paid fairly.
Free agents also ask, "Is it fair to charge different fees to different clients for the same type of job?" It is! Start your grid from the top down. I ask Tier I clients to pay the full worth of a job. I haven't inflated my price. Gouging clients is both unethical and bad business. I reduce my fees in Tiers II and III because other clients have more limited resources. I'm giving something up in return for that particular job and the opportunity to establish or maintain a long-term relationship. And relationships build businesses.
Put it in writing and take control
Put your fee grid in writing and keep it updated. Maintain it in privacy, then use it as a reference for your estimates. You can always raise or lower an estimate based on conversation with a client, but you'll appear consistent. And after being asked "How much?" you won't be caught in an awkward pause that makes clients wonder if you do want to gouge them or simply aren't in control of your business side.
Finally, what if a client offers a fee that's higher than the one in your grid? Accept it gracefully and without comment, then use it as the baseline in your relationship.
Athletes and entertainers have their own agents to represent them, but you have to do it all. Grid your fees and take greater control of your income.
About the teacher: