You should never price a project by simply multiplying your hourly rate by the estimated hours. If you’re doing that stop right now because you’re potentially short changing yourself. Every project requires a unique approach, which means every project requires a unique pricing structure.
So, before you price your next project consider the following and how it may impact your pricing:
Relationship with the Client
Do you personally know the client? Are you helping a close friend, or are they a friend-of-a-friend? Your relationship with the client may put you into uncomfortable situations, like being pressured to provide free or discounted work. If this happens you’ll need to tread carefully. Providing free or discounted work can have unforeseen consequences. If you do decide to provide a discount make sure you let them know what the cost of the project would have been before the discount.
Past experiences with the Client
Have you worked with the client before? Do you know how they act under pressure? Do they micromanage or do they let you exercise your expertise and creative freedom? Knowing how a client will act throughout the project helps you gauge your potential stress level. The more stressed you may be, the more you need to charge.
If you’ve worked with the client before did they pay on time, or was it a struggle to even get half of what you were owed? If a past client has always paid on time, you may be willing to be flexible on my payment terms (maybe less money up front, or dividing the project cost into multiple payments).
On the flip side, if a client has been late on payments, you shouldn’t work with them again unless the project cost is paid up front and in full.
Type of Work
We’ve all had projects we’ve worked on where the subject matter was duller than dirt. However, it paid the bills so it had that going for it. Your personal enjoyment in the material you’ll be designing could have a direct correlation to your price. If you’re going to be bored to death with the material you need to make sure you’re at least being well compensated for it.
It’s important to be well organized, so if a project is going to disrupt your schedule, there needs to be a hefty price to pay. Also, working under tight, if not borderline unattainable, deadlines causes a great deal of stress so make sure you’re compensated for the physical and mental toil you may encounter.
Impact on the client’s organization
This is closely tied to value-based pricing. I won’t go into all the details of it now, but in general if your designs are going to provide tremendous value to your client you need to make sure you’re compensated for it.