Are you getting paid what you’re worth?

Anyone can appreciate the value and attraction of that concept, but perhaps independent business owners most of all.

I attended a networking/professional development event on just that topic, put on by IABC/Toronto’s Professional Independent Communicators (PIC). The session was a panel discussion about fees and getting paid.

Here are are some of the tips shared by the panel, which was made up of Kevin Hanson (a communication consultant specializing in performance management and reporting); Donna Papacosta (writer, podcaster and then chair of PIC); and Marcia Ross (writer and at the time editor of IABC/Toronto’s Communicator newsletter):

On setting up your fee structure/proposal:

• Not certain what to charge? Ask senior level corporate communicators what they pay for similar work, or ask other independents what they charge. You can download the results of a 2014 PIC member survey (old, but may be helpful) under Resources on the PIC website.
• Your fee may be based on an hourly rate, but present it as an overall project fee.
• It’s up to you to position yourself as a professional. You do not — do not! — want to be perceived as the least expensive; there will always be someone desperate enough to work for practically nothing, and that is no way to run a successful business!
• Ask the potential client what the budget is, but don’t be surprised if they can’t/won’t tell you. Let them know you have done a similar project for $X and another for $Y (a high and low version) and ask which is more in their range.
• When coming up with a project fee, consider how much time you think the project will take, and add another third if you aren’t sure (you’ll probably underestimate!). As you gain experience, your estimate should be close to the mark.
• In your proposal/quote on a project, spell out the process you will follow, including such things as how much information the client will provide and in what format; how many interviews will be conducted, and if they will be in person or by telephone; how much time you will dedicate to reviewing and analyzing the information; how many drafts you will produce; and so on. Be specific.
• Talk about the benefits you bring to the project, such as the value of your experience or your insight into a certain aspect.
• Nip “scope creep” in the bud. Make it a practice to requote when asked for work above what you have agreed to, as in, “I’d be happy to add this to the project; let me send you a revised proposal.”
• Asked to provide next-day delivery? Charge a 50% premium.
• A reasonable charge for project management is 5-10% of your expected project hours.
• Track your time and compare the time you estimated for the project to the time you actually spent. Use this to improve future estimates. The panelists recommended systems such as TimeTracker or TraxTime.
• Should you vary your rate for different types of work? The panelists typically charged one rate, whether it was for writing, say, or media follow-up.
• It’s up to you if you want to lower your rate for a charity, a cause you believe in, or to get a foot in the door. In the latter case, be warned that it will be difficult to raise your rate later on, because you’ve shown you can be “had” on price.

On how to deal with a low-balling client:

• If a potential client says he/she can get what you’re discussing for half your price, let them! That’s not the type of client you want, and that’s not how you want to position yourself. (See above.)
• If the immediate reaction is “that’s too high,” ask again what the budget is (see above). Or show how taking out one or two of the variables could lower the price. Never just agree to a lower price without altering your proposal.

On how to ensure you get paid/get paid on time:

• This goes back to the expectations you’ve set up front. You are much more likely to get paid when you expect it if you’ve spelled out the terms from the start, such as one-third is due when the project starts, one-third halfway through, and the final third when you submit the completed project.
• Summarize your discussion in a proposal, contract or one-page letter. Spell out your expectations.
• With a new client, do not start work until you have the first cheque. Does a painter or landscape expert start work on your house without a deposit? No. You shouldn’t either, unless you have a long-standing good relationship with the client.
• It sounds like a given, but submit an official invoice that includes all your contact information and details of expected payment, such as “payable within 30 days.” Some companies are obliged to take any discounts, such as offering a 2% discount if paid within 10 days.
• If the payment is late, call your client and ask about it. Don’t assume it’s deliberate; sometimes the paperwork gets lost between departments and your client will sort it out.
• Make friends in the Accounts Payable department and ask if there’s anything they need to move the payment along.
• Make a personal visit. Tell your client you will be in the area and can save them a stamp (if they still mail paper cheques) by dropping in to pick it up.

What else would you add to the discussion?

(Post updated Oct. 8, 2020.)

Related reading:
More pricing tips from PIC (2015)
The ultimate list of pricing resources (2014)

(Photo courtesy of jscreationz and FreeDigitalPhotos.net.)