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A Freelance Designers Guide to Managing Money
Can I have you bank account details?
Cost estimates

Time estimates

Hourly Rate -vs- Flat Fee
Contracts
Invoicing
Tax
Should you ever
work for Free?
http://shouldiworkforfree.com/
Cost estimates…
“This is extremely hard to do early
in your career. Primarily because
you haven't had enough experience
in...
Cost estimates
🤑 Research. Try and find out what
others are charging (by looking on
job sites)
🤑 Hours + Difficulty
🤑 1 da...
“It's taken me several years, but
I've finally gotten to be
confident enough in my skills to
know almost exactly how long
...
Time Estimates
🤑 “However long you think it
will take, it will take 2-3
times that once your client
gets involved.”
🤑 “Add...
Time Tracking
🤑 Harvest http://getharvest.com/
🤑 App Store “Time Tracker” £0-£3.99

e.g. TicToc
“The number of hours is very heavily
influenced by experience - it took a
few projects which involved me
being underpaid a...
“Everyone vastly underestimates
a project or two starting out.
Learn from these mistakes.”
Time Tracking
Ways to charge: Hourly Rate
👍
Flexible, and transparent.
Covers revisions
👍
Use time estimate as a
Guide you always can
ad...
What would you
charge per hour?
Ways to calculate: Hourly Rate
Junior Designer
Billable hours in a week
Billable hours in a year
Hourly Rate
= £18,000pa
=...
Ways to calculate: Hourly Rate
A
Annual Business Costs
B
Annual Personal Costs
C
Billable Hours
“If I had known what the c...
Ways to calculate: Hourly Rate
A
Annual Business Costs
B
Annual Personal Costs
C
Billable Hours
A + B
C
= Hourly Rate
“If ...
https://www.hellobonsai.com/rates/
“I've worked my way up to that number
over several years after realizing I was
underpaying myself.”
Ways to calculate: Hou...
Ways to charge: Flat Fees
👍 Easy solution for repeat
business, i.e. you know
exactly what you
charged last time
👍 Clients ...
What full time wage
would you like to earn
in you career?
“Entry salaries are rough to deal with, but
the speed you can improve your earnings
is phenomenal if you're doing a good j...
Contracts - Protect Yourself
🤑 Set a minimum fee based on time.
ie. ½ day rate (3-4 hours)
🤑 Work stops when the payments
...
Contracts - Protect Your Client
🤑 Agree deadlines and stick to them
🤑 Incentives to pay on time
(decrease for on time paym...
Contract Examples
Design Contract
This Contract is between Ben Kamara (the "Client") and Rob Gill (the "Designer").
The Co...
Invoicing
🤑 “Use Software to help keep track
of invoices: Freshbooks, Wave,
Freeagent, Kashflow, Harvest,
Excel…”
🤑 Give t...
Invoicing
“I only release a very low res
version until final invoice payment.
Then give them them all the high
res versions when pay...
Relationships
🤑
“Send nice emails. Build a
good relationship with the
client. Understand where
they're coming from.”
🤑
“On...
Tax
🤑 PUT ASIDE MONEY FOR TAX!
🤑 “Doing your self assessment as a
sole trader is pretty easy - as long
as you have everyth...
“Saving shouldn't be as daunting as it
sounds, back then I associated everything
I earned with 'I need this to live' - sav...
“Save up at least 3 to 6 months worth of
living expenses. This will make the slow
times so much less stressful and prevent...
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A Freelance Designers Guide to Managing Money

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This advice is presented as if you're a freelance Illustrator or Designer. Although (hopefully) it should be useful to anyone who need to bill clients for any type of project. It explains the entire process of managing your cash flow, by gathering advice from the Designer News community.

You can read more about the presentation on my website www.rob-gill.co.uk

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A Freelance Designers Guide to Managing Money

  1. 1. A Freelance Designers Guide to Managing Money
  2. 2. Can I have you bank account details?
  3. 3. Cost estimates
 Time estimates
 Hourly Rate -vs- Flat Fee Contracts Invoicing Tax
  4. 4. Should you ever work for Free?
  5. 5. http://shouldiworkforfree.com/
  6. 6. Cost estimates… “This is extremely hard to do early in your career. Primarily because you haven't had enough experience in most cases to gauge a rough sweet-spot of what your worth is.”
  7. 7. Cost estimates 🤑 Research. Try and find out what others are charging (by looking on job sites) 🤑 Hours + Difficulty 🤑 1 day equals X hours work (7-8?) 🤑 Work out what the client wants and gather their requirements 🤑 Break all the tasks required into small chunks 🤑 Order them in size 🤑 Work out how long the smallest task will take, and the biggest (compare this to previous experience, this can be a university assignment) 🤑 Put a price on your time and work the rest out with your estimates. *Remember estimates doesn't mean final!
  8. 8. “It's taken me several years, but I've finally gotten to be confident enough in my skills to know almost exactly how long certain tasks will take me, and I can now craft more accurate estimates because of it.” Cost estimates…
  9. 9. Time Estimates 🤑 “However long you think it will take, it will take 2-3 times that once your client gets involved.” 🤑 “Add between 20%-50% depending on how fussy the client is” 🤑 “Include the time spent emailing, coordinating with printers, researching etc.” 🤑 “Guess the hours, add a bit on top for unforeseen problems”
  10. 10. Time Tracking 🤑 Harvest http://getharvest.com/ 🤑 App Store “Time Tracker” £0-£3.99
 e.g. TicToc
  11. 11. “The number of hours is very heavily influenced by experience - it took a few projects which involved me being underpaid and overworked to figure out exactly how long it ACTUALLY took me to do things.” Time Tracking
  12. 12. “Everyone vastly underestimates a project or two starting out. Learn from these mistakes.” Time Tracking
  13. 13. Ways to charge: Hourly Rate 👍 Flexible, and transparent. Covers revisions 👍 Use time estimate as a Guide you always can add remove 😢 Hourly rate means you need to track your time 😢 8 hours days can easily turn into 10+ if you discount time spent emailing, research etc…
  14. 14. What would you charge per hour?
  15. 15. Ways to calculate: Hourly Rate Junior Designer Billable hours in a week Billable hours in a year Hourly Rate = £18,000pa = 37.5 = 37.5 x 47 = 1762 = £18,000/1763 = £9.23 Freelance Rate = £9.23 x (2 or 3 or 4…) = … “Do a lot of research. Try and find out what others are charging by looking on job sites.”
  16. 16. Ways to calculate: Hourly Rate A Annual Business Costs B Annual Personal Costs C Billable Hours “If I had known what the cost of living was, I would have known what I needed to make to survive on my own. This cost of living calculator is an amazing resource.” Accounting fees Banking fees Studio rent Utility bills travel costs hardware/software insurance advertising +Others… Total amount of disposable income you’d like… plus…
 Rent/Mortgage Utility Bills Savings Pension Billable hours in a year (assuming 5 weeks holiday) this will be 1762 again
  17. 17. Ways to calculate: Hourly Rate A Annual Business Costs B Annual Personal Costs C Billable Hours A + B C = Hourly Rate “If I had known what the cost of living was, I would have known what I needed to make to survive on my own. This cost of living calculator is an amazing resource.”
  18. 18. https://www.hellobonsai.com/rates/
  19. 19. “I've worked my way up to that number over several years after realizing I was underpaying myself.” Ways to calculate: Hourly Rate
  20. 20. Ways to charge: Flat Fees 👍 Easy solution for repeat business, i.e. you know exactly what you charged last time 👍 Clients prefer flat fees 👍 As long as its calculated on time with an added buffer it shouldn’t cause issues 😢 It can leave you out of pocket if you badly estimate the effort required 😢 It can meant to don’t get paid for expenses 😢 Negotiating a higher fee maybe harder with repeat clients, if you’ve charged them before
  21. 21. What full time wage would you like to earn in you career?
  22. 22. “Entry salaries are rough to deal with, but the speed you can improve your earnings is phenomenal if you're doing a good job.” “Come to terms with the balance of job satisfaction and salary… learning is more valuable than cash when you start out”
  23. 23. Contracts - Protect Yourself 🤑 Set a minimum fee based on time. ie. ½ day rate (3-4 hours) 🤑 Work stops when the payments stop. Take a deposit upfront. 🤑 I charge a down payment (usually 30%-50%) up front. That will weed out the good clients from the bad. 🤑 Be sure to have a late payment clause that changes interest. 🤑 If you set mini deadlines, set small fees against each
  24. 24. Contracts - Protect Your Client 🤑 Agree deadlines and stick to them 🤑 Incentives to pay on time (decrease for on time payment/ increase for late payment) 🤑 Assure them that you can agree to change the terms later down the line, resend contract at this point
  25. 25. Contract Examples Design Contract This Contract is between Ben Kamara (the "Client") and Rob Gill (the "Designer"). The Contract is dated November 23, 2015. 1. PROJECT AND PAYMENT 1.1 Project. The Client is hiring the Designer to do the following: The designer will assist in helping to design visuals and prototypes for a mobile application called Scorescast. Some branding, logo development and basic design work across other platforms may also be required. 1.2 Schedule. The Designer will begin work on November 23, 2015 and will continue until the work is completed. This Contract can be ended by either Client or Designer at any time, pursuant to the terms of Section 6, Term and Termination. 1.3 Payment. The Client will pay the Designer a rate of £500.00 (GBP) per hour. Of this, the Client will pay the Designer £1,000,000.00 (GBP) before work begins. The Designer agrees that it is not entitled to any further fees from the Client in relation to this project unless otherwise agreed in writing by the Client. 1.4 Expenses. The Client will not reimburse the Designer's expenses. 1.5 Invoices. The Designer will invoice the Client for work done monthly. The Client agrees to pay the amount owed within 28 days of receiving the invoice. The Designer shall be entitled to charge, and the Client shall pay, interest on any unpaid amount from the due date until payment is received at a rate of 5.0% per month on the outstanding amount. 2. OWNERSHIP AND LICENSES. 2.1 Client Owns All Work Product. As part of this job, the Designer is creating “work product” for the Client. To avoid confusion, work product is the finished product, as well as drafts, notes, materials, mockups, hardware, designs, inventions, patents, code, and anything else that the Designer works on—that is, conceives, creates, designs, develops, invents, works on, or reduces to practice—as part of this project, whether before the date of this Contract or after. The Designer https://www.hellobonsai.com/ http://docpool.welcomebrand.co.uk/           Website project contract  Client name here    Offroadcode Limited  September 2012  Commercial in Confidence      LOADS of resources here
  26. 26. Invoicing 🤑 “Use Software to help keep track of invoices: Freshbooks, Wave, Freeagent, Kashflow, Harvest, Excel…” 🤑 Give the many ways to pay. Bank Transfer, Cheque, PayPal (which is great for international work!) 🤑 Be prepared for late payments. 🤑 provide “30 days notice”, in the contract add a small % for each day payment goes over.
  27. 27. Invoicing
  28. 28. “I only release a very low res version until final invoice payment. Then give them them all the high res versions when payment clears.” Invoicing
  29. 29. Relationships 🤑 “Send nice emails. Build a good relationship with the client. Understand where they're coming from.” 🤑 “Only work with people you are confident of having a good working relationship with. Trust needs to be built otherwise as with all relationships, it will break down.” 🤑 If your unsure of someone to begin with, as for payments upfront and contracts to be in place. As the relationship builds you might be able to relax this 🤑 Meet them, spend time talking to them, it will help you become better at judging peoples nature 🤑 Be prepared to have a client base and have the patience to deal with every single one
  30. 30. Tax 🤑 PUT ASIDE MONEY FOR TAX! 🤑 “Doing your self assessment as a sole trader is pretty easy - as long as you have everything in order before you sit down to do it.” 🤑 “keep receipts for expenses… petrol, trains, new pc hardware etc that are related to your work. Even a % of your household bills, if work from home” 🤑 Working full time and freelancing part time, you can pay tax on your freelance earnings through your PAYE (if below £3k) just write a letter to declare your freelance income & expenses. 🤑 “keep track of any interest you make in various savings accounts… it’s all income”
  31. 31. “Saving shouldn't be as daunting as it sounds, back then I associated everything I earned with 'I need this to live' - save something, even if it's as little as £25 a month, if you get a raise, increase your savings.” Saving
  32. 32. “Save up at least 3 to 6 months worth of living expenses. This will make the slow times so much less stressful and prevent you from taking on bad projects or clients due to panic over finances.” Saving

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