How To Work Out What To Charge Clients

Paul Boag says he does not price projects with a neat formula. He starts by calculating the minimum amount he needs to earn, estimates project length by educated guess, and then adds markup based on interest in the work, the client’s difficulty, and what the client can pay.

Reading notes

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• Pricing is presented as a practical, imperfect process rather than a precise calculation of hours or return.
• The first step is to calculate a minimum annual income, then add costs, savings, pension, and tax.
• Working days are reduced by weekends, public holidays, and vacation time.
• Not all working time is chargeable, because marketing, proposals, admin, and finance work also take time.
• The author says he estimates project duration by gut feel, especially for bigger projects, rather than by spending a long time calculating.
• The minimum price is only a viability check, not the final client price.
• He raises or lowers markup depending on how interested he is in the project.
• He charges more when he expects a client to be difficult.
• He also adjusts price according to the size of the organization and what that client can afford.
• He does not change prices because he is desperate for work or busy.
• The article ends by saying pricing is hard to do fairly and is ultimately shaped by supply and demand.