Latest / The Side Hustle Career Podcast with Fexingo: Second Income, Freelancing While Employed / How To Price Freelance Projects Without Losing Money
Transcript
- Lucas: Let’s talk about the moment every freelancer dreads: when the client says, 'Can you just tweak this one logo? It’ll take five minutes.' You know it won’t take five minutes. It takes two hours, a fresh perspective, and suddenly your evening side hustle has bled into your Saturday morning. The problem isn’t the request; it’s the pricing structure we accepted upfront. Luna: Exactly. We see so many smart professionals leave money on the table because they’re afraid to sound expensive. I had a listener last week who charged by the hour for a consulting project and ended up working forty extra hours for free because she didn’t define the deliverables clearly. Lucas: That is the classic trap. When you price by the hour, you are literally penalizing efficiency. If you solve a client’s problem faster than expected, you earn less. But if you drag it out, you risk annoying them. It’s a broken incentive model. Most corporate employees transitioning to freelancing carry this mindset because their salary was fixed regardless of output speed. Luna: Right, and they think charging more means risking the sale. But really, they’re risking their own time. Have you seen that study from Upwork about average project overruns? Lucas: I have. It suggests that nearly half of freelance projects exceed their original timeline by at least ten percent. That’s not a bug; it’s a feature of human creativity and complex problem solving. So, if we assume a ten to fifteen percent overrun, why do most people still use a flat hourly rate without a buffer? Luna: Fear. They think the client will compare their rate to someone else’s lower bid. But what they don’t realize is that the low bidder is either inexperienced or planning to nickel and dime them later. Lucas: Precisely. And that’s where the concept of the 'true hourly floor' comes in. Before you quote a single number, you need to calculate what it actually costs you to show up. This isn’t just your desired take-home pay. It’s your taxes, your health insurance, your software subscriptions, your accounting fees, and yes, even your downtime. Luna: So many people forget to include the unpaid hours spent invoicing, chasing payments, or answering emails outside of billable time. That administrative overhead is massive. Lucas: It’s often twenty percent of your total revenue. Let’s look at a concrete example. Imagine you’re a marketing consultant who wants to make one hundred thousand dollars a year. After taxes and expenses, let’s say you need seventy-five thousand in net revenue. If you bill two thousand hours a year, your base rate is thirty-seven dollars and fifty cents an hour. But you only bill maybe one thousand six hundred hours. Luna: Which bumps that rate up to nearly fifty dollars an hour just to break even. Anything below that is pure loss. Lucas: Correct. And then you add the risk premium. If you charge fifty dollars an hour, but the project runs late, you’re effectively dropping your rate to forty-two dollars. So, the smart move is to shift from hourly to value-based or fixed-fee pricing, but you have to anchor that fee in your calculated hourly floor plus a contingency margin. Luna: This brings us back to the logo tweak scenario. How do you handle that without sounding rigid or difficult? Clients hate feeling like you’re counting seconds. Lucas: You don’t count seconds; you define scope. In your initial proposal, you list exactly what is included. For a rebrand, that might be three concepts, two rounds of revisions, and final file delivery. Anything beyond that is out of scope. When they ask for the extra tweak, you don’t say no. You say, 'That falls outside our agreed scope, but I’d be happy to put together a quote for additional revisions.' Luna: It turns a conflict into a new business opportunity. Suddenly, you’re not being petty; you’re being professional. And often, they’ll just say, 'Oh, never mind,' once they realize there’s a process. Lucas: Or they’ll pay you for it. Either way, you’ve protected your time. The key is that the boundary must be established before the work starts. If you wait until they ask for the extra work, you’ve already lost leverage. The contract is your shield, but the conversation is your sword. Luna: I love that framing. But what about clients who push back? Who say, 'We trusted you to get it done right, why are you charging extra?' How do you navigate that emotional pushback? Lucas: You remind them that you are a partner, not a vendor. A vendor does whatever they’re told. A partner protects the quality of the outcome by sticking to the plan. You can say, 'I want to ensure we stay on budget and timeline, so any changes beyond the initial brief require a quick adjustment to keep everything aligned. Does that work for you?' Luna: It’s about managing expectations, not just money. If they agree to the process upfront, they’re less likely to feel blindsided later. Lucas: Exactly. And here’s a subtle trick: always include a small buffer in your initial quote. If you estimate a job will take ten hours at fifty dollars an hour, quote it for eleven hours. That extra hour absorbs minor tweaks without triggering a change order. It’s cheaper for you to absorb ten percent than to negotiate a change order for five percent. Luna: That’s a pragmatic approach. It acknowledges reality while keeping the relationship smooth. But it only works if your initial estimate is accurate. If you’re bad at estimating, that buffer disappears fast. Lucas: True. Estimation is a skill you build over time. Track your actual hours against your estimates for the first five projects. You’ll likely find you underestimate by fifteen to twenty percent. Adjust your baseline accordingly. Don’t guess; measure. Luna: Data-driven freelancing. I like that. It removes the anxiety because you’re basing decisions on past performance, not fear. Lucas: And it makes you more confident in negotiations. When you know your numbers, you stop apologizing for your rates. You start presenting them as facts. Confidence is contagious. Clients sense hesitation, and hesitation signals risk. Luna: So, the takeaway is: calculate your true floor, add a contingency buffer, define scope tightly, and communicate boundaries early. Simple, but hard to execute. Lucas: Simple, not easy. Especially when you’re eager to please. But remember, the best client relationships are built on clarity, not convenience. If they respect your time, they’ll respect your invoice. Luna: Well said. And if you’ve been thinking about making that leap from employee to freelancer, getting your pricing right is step one. Lucas: Before we wrap up, I want to mention something real. A lot of listeners support this show directly through buy me a coffee dot com slash fexingo. It covers the hosting costs and keeps these episodes ad-free, which matters to us. If this kind of practical advice helps you, consider joining the handful of regular supporters who make this possible. Luna: Yeah, it really does help keep the signal clear. Thank you to everyone who contributes. Lucas: Back to the topic though. One final thought on scope creep. Always end your project with a formal handover document. List exactly what was delivered, link to all files, and confirm acceptance. It closes the loop psychologically for the client and legally for you. Luna: It prevents those 'wait, I forgot to save that file' moments weeks later. Documentation is boring, but it pays dividends. Lucas: Boring is good. Boring means stable. Stable means sustainable income for your side hustle. Next time a client asks for that 'quick tweak,' remember your hourly floor and your defined scope. Luna: And remember that protecting your time is actually protecting the quality of your work for everyone. Lucas: Right. So, what’s one boundary you’ve set recently that changed your workflow for the better? Luna: I started requiring a fifty percent deposit before starting any new project. It filters out the tire-kickers immediately. Lucas: Smart. Cash flow is king. Any questions for next time, send them our way.