how I decide what to charge you

In the spirit of my commitment to try and be more open and transparent in this, my 20th year of business, I've decided to do something very un-British: talk openly about money.

Specifically, how it is I decide what my rate should be when I'm quoting my fee as part of how I would like to work with you.

I've thought about 'pulling back the curtain' like this this for a while, because:

1. there can often seem to be a lot of mystique and mystery around how consultants/freelancers types like me set our charges (and keeping things hidden usually only makes them worse for everyone in the long run);
2. as a trainer/facilitator, there's lots of encouragements and exhortations for people like me to charge by our value (what the job is worth to you, the client), not the time it takes us to do it (so I wanted to offer another perspective on this).

Ultimately, I try and keep my pricing easy and transparent for all of us - I have a set day/hourly rate that's same for everyone. This means I'm less likely to confuse myself, or cause others to get confused if they talk with each other about what I charged them for their respective projects. There are, of course, exceptions to this:

1. a client who states that there's already a fixed budget or rate that they pay all consultants and associates, which means I'll bill them on that basis (assuming I'm happy with the rate that they offer, and that this may mean a reduction in the scope and depth of work that I might have otherwise delivered);
2. subject to circumstances, I'm not completely averse to offering a goodwill discount to a client (but I can't give all my pricing secrets away in a single post here, so you'll have to come back to learn what those circumstances might be another time);
3. or when I offer to work on a purely pro bono basis (for more clarification on what it takes you to get into that bucket of my pricing, see this previous blog I wrote)

To the point about the basis of my choosing to charge in this way: I've personally always preferred to set a rate on the time I'll spend on a job. This is because:

1. it means I can offer more transparency and openness in my relationship with a client in how I'm working with them (which hopefully helps engender more trust and 'human-ness');
2. many of the types of organisations I work with have to report back to a funder or commissioner on how/why they've spent money on me; and that usually involves showing a rate based on days/hours. If I take a pricing approach that helps match this, it makes life slightly easier for them, which hopefully helps us all get along better?
3. the same work or outcome will be worth different amounts to different groups, depending on their relative circumstances - which means that a fixed value price would represent a bargain to some, but 'paying-over-the-odds' for others; 
4. my primary motivation for why and how I'm running my business is to 'earn enough' to support my family. I'm afraid I don't have any aspirations to scale my enterprise to the point where I can start to buy castles, etc. So although I recognise this 'pay as you use me model' potentially limits my earning potential, I'm OK with that. (Or at least, I am for now - ask me again in a few years time: the world and our personal circumstances are always changing, and having a castle to ride out the end of the world in might not be the worst place to be..?).   

But just because this is my preference, doesn't mean that I always adopt it. There are occasions where I'll agree a fixed fee for a project with a client in certain circumstances (see earlier references to this).

And to the 'money shot' piece in this blog about how I decide what my day/hourly rate is...

I'm afraid it's rather boring - I have a spreadsheet that tracks typical charges across different sectors, and for different types of services. Into this I add various national sector bodies' own regular benchmarking studies (such as ipse's); and charges I'm offered by agencies and other bodies where I'm working as their associate - and then average them all out.

This may seem convoluted, but for me, its the most equitable basis I can currently think of to come up with the number I put on your quotation which isn't accidentally feeding into a 'race to be the cheapest'. As to do so would ultimately only mean that the work is of a lesser standard, and also my fellow freelancers and consultants would also suffer from having more pressure on them to charge less than they might be able to afford to, at the cost of their (and their family's) own quality of life.

My hope in sharing this all openly here is:

1. it will be of some encouragement or help to others who are starting out on their own respective journeys as freelancer/facilitator;
2. it will help my (and others') clients better appreciate the thinking that some of us consultants/trainers do in how we come up with our bill to you;
3. it will also feed into a wider conversation that will help the wider pool of us in our collective sectors.

I should also namecheck Jodie Newman of the Content Shed as part of this post, because it was her prompts at a recent call I was part of with her that led me to decide to create this post. So if you think this was brilliant, go check out her Shed; if you think it wasn't, then blame me for the poor execution of the idea...