Pricing creative services is something many freelancers approach with fear, doubt and some anxiety. After all, you are not pulling products down off a shelf and handing them over. Not only are you creating what they need, you are also selling it. You have overhead, equipment, experience and personal expertise that must be factored in because they can’t always be immediately seen by clients—especially new clients. Everything you say about pricing at the beginning of a new client relationship will be carved in stone and very difficult to change later. The first conversation about price sets the stage. Improving your dialogue about pricing will make you money and keep you in business. It is time for an upgrade.

To develop a clear strategy and solid tips to get it right from the beginning, we talked with Peleg Top, founder and principal of Top Design (www.topdesign.com). After fifteen years in the business, Peleg has grown his company into one of the leading design firms in Los Angeles. Though they have had many different types of clients, today they specialize in marketing and brand development for nonprofits and corporate philanthropy. In addition, and as a way of giving back for all he’s gained from the design industry, in 2004 he co-founded Marketing-Mentor (www.marketing-mentor.com) with his business partner Ilise Benun to teach “creative solopreneurs”—their term for designers, illustrators, photographers and writers looking to market and promote their work.

Let’s start at the very beginning. How do you know what to charge for a project? Peleg takes you through his process, “The first step is figuring out my life’s overhead. How much do I need to bring in a year? Be realistic! Then I can proceed to calculate my true hourly rate. I know how much I must charge so I can figure out how much I should charge. Having a good idea of what the ‘must charge’ is allows me to have a minimum fee to start with. Then based on estimating the amount of hours it takes to do the project, I calculate the hours by the hourly rate and get a project ‘fee’ number to start with. Most of the time the number that I will provide the client will be much higher and based on the value of the project. I never give an estimate that is hourly based; the hours are used for budgeting purposes only. The idea is that the faster and more efficient I am on a project, the higher my profit margin. It may take me only ten hours to complete a project but I will never charge for ten hours as that would devalue the work. The higher value number that I will charge the client comes from being well positioned in what I do. Clients don’t generally question our fees because they know they are getting expert work.”

Regarding getting a client’s budget, sometimes you feel that you need dancing lessons just to keep up with the way some clients whirl around this question. Freelancers find it hard to bring up the question, but you must find a way to get that information before starting a project. Peleg handles the situation professionally but with a soft-sell approach and offers some advice about voice control, “I generally start the conversation in a casual way that shows that I am relaxed and confident talking about money. I often hear designers voices flutter when they start talking about money. That only tells the client that you are not sure of your worth or what you base your fees on. So suck it up and pretend like you are confident! What I simply say is: ‘OK, let’s talk about money.’ That opens up the door to the discussion and brings you to that playing field.”