How to set fees & expectations

Great projects start here. Make sure you and your client are on the same page—about everything—and you’ll both be happy.

1. Setting expectations

Before any 1-to-1 Project, both parties need to be in agreement. Most projects run smoothly, but it’s always good to set fees and expectations up front in case disagreements arise. This makes it easier to resolve conflicts quickly and professionally.

Keep communications on 99designs

1-to-1 Projects allow both you and your client to organize all communications and deliverables in one simple workspace. Keeping communications on 99designs also allows site admins to review correspondence, in case there is ever a disagreement.

Itemize all deliverables

It seems simple enough to say “I’ll make you a landing page for $1,000,” but itemizing the project details will help your client understand your work.

For instance:

  •  $300 for the page structure
  • $100 for font selection and treatments
  • $250 for the hero illustration
  • $350 for icons
 
This leaves no questions about where the $1,000 quote came from. If you can’t complete the job for some reason, the quote also allows you to easily figure out how much you should receive for the deliverables you did provide.

Put a limit on the amount of drafts

A $1,000 landing project may sound great at first, but not if it takes 1,000 drafts to get it right. Clients can be highly detail-oriented and offering too many drafts is not a profitable use of your time.

Instead, cap the number of drafts (we recommend 2-3 for a basic wireframe) in your negotiation. If time is tight, make this a hard cap, or offer additional drafts in your itemized list at an extra charge. Setting this expectation projects your profitability and reminds the client to respect your time.

Agree on a firm timeline

Setting a timeline is one of the most important parts of your negotiation. Most conflicts arise when a designer fails to deliver the work when client expects it—and that’s often a result of poor expectation setting.
After agreeing on your itemized list, ask your client “When do you need this by?” Use that date to set milestones based on the elements of your project. Consider charging more for faster turnarounds and lower fees for longer timeframes. 
 
Also, make sure you’re honest with yourself. Do you actually have the capacity to finish a quality project within the timeframe they need? If not, respectfully decline. Your professional reputation will thank you!

Set up a payment structure

One of the most frustrating aspects of being a freelancer is getting paid in a timely manner. Agree on a payment structure with your client before you begin to ensure that you’re paid for the work you do, even if one of you decides to back out halfway through.

A few options that work well are:

  •  50% fee up front (as insurance) with the agreement that the client will pay the final 50% at the end
  • 25% for conceptual work and wireframes, 35% for drafts and 40% for the finished project
  • Charging by component (e.g. structure, font, illustration, icons)
  • An hourly rate (you’ll want to create a timesheet that you can share with the client)

Consider using Pay & Hold

99designs also offers a Pay and Hold option. The client can pay 99designs up front. We’ll keep it safe and release it when the client confirms they’re satisfied with the work. This protects designers as well as clients, ensuring that if either party disappears or breaks the written agreement, 99designs can transfer the funds to the deserving party. 

The pay and hold option is less critical when you divide payment into several intervals. If you already have a strong relationship with your client, ask if they’re comfortable paying you directly.

2. Setting your pricing

Pricing can be one of the most difficult parts about being a freelancer. Is it better to decide on a fixed price or an hourly rate? What if the client wants to negotiate? These types of questions aren’t easy, but there are some techniques that can help.

Calculate your living costs

The first step is to ensure that you’re making enough money to cover your expenses each month.

Consider what you need to earn at a minimum to cover things like rent, groceries and household bills. Divide that total by 4 to set a weekly income goal, or multiply it by 12 for a yearly minimum.

 

Should you charge a project rate?

Project rates are a great option if you and your client have a full understanding of project scope. Be sure to itemize all deliverables, set a maximum amount of drafts and anticipate additional work.
 
Discussing these details before you begin will keep things running smoothly throughout the project.

Advantages

  • Easier for a customer to understand
  • Time tracking isn’t necessary
  • Calculations are simplified
  • If you work quickly, your quotes will be more profitable than if you charged hourly

Disadvantages

  • Customers may request more work than planned
  • Duration of projects may increase
  • Time frames can be unreliable
  • Requires a strong grip on your client relationship

Should you charge an hourly rate?

Hourly rates are ideal for ongoing projects or if you prefer to time-track work with clients. Unlike a set project rate, additional requests can be welcome (more income and work for you!). 

A word of advice: always be sure you write every additional request down.

Advantages

  • Clients generally use your time more wisely
  • Cuts down the number of revisions
  • Time frames are usually more reliable
  • Additional tasks outside the initial brief aren’t as big a deal

Disadvantages

  • Requires diligent time-tracking and a reliable way to let your client know how much you’re working
  • Limits your ability to juggle multiple projects
  • Requires strict living expense calculations
  • Can seem less trustful to smaller clients who may not believe your number of hours quoted
 

Next, learn even more about improving client communication