Freelance Pricing Part 2 - Quoting To Win!

Last week we looked at setting hourly freelance rates. Now, let's see how they can be applied to pitching for work.

Some people call it a bid and others call it a quote or proposal. But no matter what you call this process, make sure that the document is concise, powerful, and easy to understand. Why? Because preparing a quote is an integral part of a freelancer's business and must be mastered in order to land work. Consider the proposal as a final step of the sales process. Would you buy a computer if you hadn’t read all the sales copy, and didn’t know how much it would cost? Of course not. Use the proposal to introduce yourself, sell your services, and focus the client's eye on you.

The first rule of thumb is never to bid blind. In order to obtain all the necessary information from your client, create a standard form that you can hand out at initial contact. Take a look at this form to see the sorts of questions I ask. Don't feel like you have to use this form -- use your creativity to develop a form that works best for you.

It’s generally unprofessional to bid on the spot. Instead, take all the information you’ve gathered back to your office to create an all-inclusive estimate. If you bid immediately, you’ll usually seem over-eager and unprofessional. However, this isn't always true. There are some situations where you can bid immediately, such as:

1. Bidding online at a site such as elance.com or allfreelancework.com. These sites are built on the idea of bidding on jobs, so obviously this is what you must do.

2. When you sense that a bid is merely a formality.

However, if you do bid on the spot, make sure to slightly overbid to compensate for anything that you might have overlooked. Make sure that the client understands that this is just a preliminary bid, and that when all materials are reviewed, a formal quotation will be sent to them.

Now that you have all the information related to the project, it’s time to start the estimation process. It takes time and discipline to calculate the figures accurately. The most effective way to prepare an accurate estimate is to map out the entire project and all of its components in a Flow Chart. Although, at first glance, this might seem to be a waste of time, believe me when I say that this is the best way to get the most accurate estimate. You’ll find once you gain some experience that you can bypass this step with simple projects. However, with complicated projects, this step will always be necessary to obtain an accurate quote.

The Flow Chart

In order to estimate the time and resources you’ll spend on a project, you’ll need to visualize each stage of the job. In order to visualize a project in its entirety it is necessary to bring all the information together in a concise way in your flow chart. In order for your estimate to be accurate, you will need to make sure that the chart is comprehensive -– have someone else review it if you can. Here’s a sample project flow chart.

Now that you’ve completed your Flow Chart, review the information. Are you able to visualize how much time each stage of the project is going to take? If you’re still unsure, ask yourself what steps are involved in each phase of the project. I can easily break down each stage of the Flow Chart into 10 different stages. Then, once you’re confident of your estimation of the time and resources involved in each phase, take a look at this estimation worksheet.

Review your Flow Chart carefully and write the amount of hours you’ve estimated for each stage of the project into the appropriate categories on the estimation worksheet. If you aren't sure how many hours should go in specific categories, consider raising your estimated hours a little (it’s better to make a mistake in your favor than the client’s, don't you agree?). Multiply the number of hours by your hourly rate to calculate your total production time.

Next: what supplies or services will you need to complete the project? Will you need to mail anything? Will you need to print anything? Make sure to mark up these items by 15% or more -- buying supplies, going to the post office, and other small tasks all take time out of your day, and you’ll need to be compensated for this.

Also, review your Flow Chart to see whether you’ll need to outsource any work to a freelancer? If you do, you’ll need to contact a freelancer and request their bid – once you have this, you’ll be able to complete your bid. It’s difficult to work with other freelancers on a project, and for this reason, I’d mark up a freelancer's bid by at least 20% for the extra time that communicating with, and managing the contractor it is going to take. Now add up all the figures to calculate the total estimation for the project. Does the number you came up with look right to you? If not, review your estimation sheet to see what could be amiss.