Pricing freelance projects

Sep 09, 2016

Hello all.

I am thinking of becoming a freelancer. Can anyone offer any advice on how to put a fee on elearning jobs?

I have been looking at the jobs being offered and their rates/fees. For example, a $320 fixed-price job asks for a 2-day ILT training to be built from scratch. Given the time to be allocated to complete the job, I don't think $300 is enough.

Or is it?

I found this article that discusses rates and while it seems dated, the fees it proposes may not be appropriate today challenges.

 

I look forward to hearing from you all.

Thanks.

3 Replies
Christy Tucker

Don't look at offers on Upwork or similar job markets to figure out pricing. Those numbers are notoriously low. In the example you gave, a 2-day ILT is probably 12 hours of actual training. Using the standard 40:1 ratio, that's 480 hours of work. Even if it's really low end development and is a 10:1 ratio, it's 120 hours of work. Someone out there is probably willing to work for $2.50/hour, but you shouldn't.

We can't discuss actual rates for bidding on projects (that would be price fixing), but I can point you to some other resources on how to figure out fair rates. I collected a number of articles here, some of which are more recent than Don Clark's page you linked to above.

https://christytucker.wordpress.com/2013/09/09/instructional-design-hourly-rates-and-salary/

As far as pricing models, you have a couple of options.

  • Bid on an hourly basis. If you're just getting started, that's often simplest. You figure out your hourly rate (based on some of the resources in my post above), and you invoice for the hours you actually worked. This way, you get paid as you go along, and you don't get screwed if they decide to add an extra 3 or 4 rounds of revision. One disadvantage is that if you're a fast worker, you get penalized for being efficient.
  • Bid on fixed price for a whole project. This requires you to be able to accurately estimate your time and the project scope. If you can do that, you can often make a better effective hourly rate than by just getting paid by the hour. The downside is that if you estimate too low, you can end up working far too much for too little money.
  • Value-based pricing requires more upfront analysis. You have to understand your clients' problems enough to figure out what the project is worth to them. If a course you create will save them $50K in errors or lost work, then you might be able to charge $30K for that project. You can find a slew of resources online about how to do that, but it's a skill you have to work on building.

Check out this presentation on business models for instructional designers for some more ideas. https://youtu.be/1JziG2SygyM?list=PLU7TxZUyjfeaxqX2Lvu-U6qFE9Wg9Aq_6

That presentation was given to the Online Network of Independent Learning Professionals, a group I highly recommend joining if you're thinking about freelancing. The LinkedIn group is fairly quiet, but it's a good central place to find out about the group meetings and the active Slack channel. https://www.linkedin.com/groups/8424180

Nancy Woinoski

Note that even if you use the hourly rate option, your client is going to ask you to estimate how many hours it will take and may put a cap on the number of hours they will allow you to work because they have a limit on how much they can spend on these projects. It never hurts to ask them upfront what their budget is for the project. They won't always tell you but when they do it makes for a better working relationship and helps align expectations.

This discussion is closed. You can start a new discussion or contact Articulate Support.