- Today we're gonna talk about how to create
freelance quotes and proposals here on The Journey.
All right, Nealey, so I used to volunteer a lot
for Score, which is, have you ever heard of Score?
- I haven't.
- Okay, well it's just another thing
like a chamber of commerce or a place you can go
as a business to seek advice.
Or they could just check out The Journey,
but anyways when I was there,
I noticed a lot of businesses that were going to Score
for help, were businesses that hadn't started yet,
like they're brand new.
And what was coming up a lot was actually
what I wanna talk with you about today is why?
Why would you have a quote or a proposal in the first place?
- Yeah, and there's a couple things around
why you really need to create a proposal and that quote.
And to start off, it really comes down to
keeping everyone accountable for what
the agreed upon costs are.
Your proposal's gonna house all the information
on their project, at least have all the overviews,
so keeping everyone accountable on who does what,
when, why, where, how, all those questions.
It's all gonna be baked right into that proposal.
- And that makes a ton of sense,
the whole accountability thing.
It reminds me of when I was in like college
studying psychology, and there's the whole bystander effect,
which a lot of times you think of bystanders
on the street and there's 40 people
and someone gets injured,
but because there's 40 people,
no one's jumping to the scene to help the injured person.
Well, it actually happens in the workplace too;
it's a whole phenomenon,
it's like well, there's a bunch of people in this group
so like, I don't have to follow through with these tasks.
- Yeah, someone else has got it.
- Someone else has got it.
- But with a proposal, I know I struggle a lot
when I first started out freelancing
is that scope creep.
So keeping that proposal--
- Wait, what is it called? - Scope creep.
So essentially it's not some creep--
- It sounds like a dance move.
- All right cool, what's the dance move?
Right on the spot, let's go. - I can't do it.
- Scope creep's coming soon.
- I already embarrassed myself enough with karaoke.
- But scope creep is basically,
so you agree with a client on a project,
whatever that is, you complete the project,
but then they keep adding on tasks,
like oh cool, one more thing,
oh cool, one more thing, oh cool, one more thing.
- Nothing cool about that.
- Right, so they creep on that scope
and they go way over, they cross the line sometimes.
- I love this term.
- So that proposal, it helps you really keep
everyone in line of, cool, this is what we've agreed upon,
and keeping within there,
and then you can add a new proposal,
like hey, if any tasks are beyond this,
I have set quote or set hourly rate
that you can kind of make sure sticks
'cause it's not fun when you have a client
that you didn't set those expectations with,
and now they just assume that
you're there to do all the things for the price,
and it's just not any fun.
- All right, Nealey, so I imagine,
which this is really similar to social media,
like there's not a one size fits all approach to this.
- Exactly, no one size fits all with your proposals.
You can't have just a one template basically
and just send it off to every single client.
Every client's gonna have different expectations,
and different project needs, whatever that looks like
so that one size doesn't fit all.
And if every client was the perfect client,
we really wouldn't need a proposal or these agreements.
But super important to have something in place
to make sure everybody wins at the end of the day.
- So Nealey, I'm getting the sense that
you've done this before.
- Once or twice.
- You've written up a proposal, so what's next?
I know we talked a little bit about estimates,
what's behind that, what's it about?
- Yeah so estimates are basically an estimate
of whether you can complete the job assigned to you
or given to you by that business owner
in the timeframe allotted.
I'm actually working with a client right now,
they migrated their Drupal site to WordPress,
having some responsive issues, they're like, hey, cool,
we've got quoted three month timeframe,
but we really need it done in eight months
at this cost.
So I had to basically understand the project
and give an estimate of,
cool, I can get this whole project done
by X date for this amount.
So it's a general loose timeframe,
it's an estimate, you're not just guessing,
but it's like an educated guess
based on all the information that you have.
- You don't want that timeframe to change,
but at least you have an estimate
and there is a maybe a flexibility there as well,
but you gotta have a lot of clear communication too
with your client.
I imagine that doesn't always go over well?
- Right, as we all know, you're watching this,
I'm sure you've had some sort of experience
with a client that didn't go the right way.
But within that proposal too,
you do wanna make sure you have a quote
that's written down in stone for this project
so you and the client know that the costs
associated with it,
whether it's your services or extra plugins
or design costs, or whatever that looks like,
have that in there.
And then we're gonna go through how to actually
create your own custom quotes later on this video,
but you definitely need to have that within this proposal.
- All right, Nealey, so we've talked a lot about time
and time constraints.
Now, and I'm sure you're asking this at home,
what about cost?
Can we get into that?
- All right, so going into the proposal,
we gotta figure out what the costs are associated with this,
and really price out our freelance rates.
Now I know I struggle with this,
especially when I first got started.
I didn't wanna look like I was too expensive, right?
I wanted to get work. - Or too cheap.
- I ended up being too cheap to try to get business
'cause I wanted business,
which a lot of us just starting out,
we wanna make sure we don't scare clients away.
Now it worked; I was getting a bunch of clients,
but I wasn't getting a lot out of it,
and I felt like I was constantly working on projects
and not getting a lot in return.
- That's frustrating.
- It was not good. - Draining.
- Basically did it for a long time,
and then I had a mentor that was working with me
for a little while.
She basically sat me down and said,
I'm gonna kick your butt if you keep
doing these prices this low. - You're worth more, Nealey!
- I'm worth it, I'm worth it!
But no, we had a great conversation about
how she charged the clients and that perceived value,
so I decided to try it.
The next client I got,
I jacked the prices up to what we talked about,
and the client agreed,
and that extra cost increased
just the perceived value that I was given,
and the client was super happy at the end of it.
I was able to justify the cost, I nailed it,
and then I was able to do that with the rest of my clients
across the board, and increasing those prices.
And I found I was actually working less,
and making more, so then I could focus on those clients
and over-deliver while still giving that great cost,
and it ended up increasing my side hustle.
It has today.
- So I've seen you do some math before
on other episodes of The Journey,
and I imagine, to find out how much you're worth,
there's gotta be some sort of equation here.
Can you tell us a little bit about that,
or what that equation would be to figure out your worth?
- Yeah so the first thing you really wanna figure out
is what do you want your annual salary to be?
That's the starting point.
Do you need $50,000 to live off?
Do you need a million dollars? - Six figures!
- Whatever that looks like.
So what salary would you like to earn
as a creative freelancer?
- Six figures!
- So we'll say $100,000.
We're being super ambitious, and we wanna take that
$100,000 and divide it by a thousand.
Why, you ask?
Thanks for asking.
So there's roughly--
- How many kids am I gonna have?
- Right, there's roughly 2,000 working hours in a year.
It's a little bit over,
but to keep math simple, we'll go 2,000.
You wanna basically spend half of that
getting new business, focusing on the admin stuff,
all the not-so-fun-things that you have to do
to keep your business going.
The other thousand hours,
that's gonna be you working on the business,
whatever you're doing,
whether it's building websites,
creating logos, videos, whatever that is,
you're spending that thousand hours.
So $100,000 annually,
that's what you wanna make for your salary,
divide it by that thousand,
what does that equal out to?
- 100, right?
- Yep, that's exactly right. - 100!
- This is only our seventh take, it's fine.
So $100 an hour is your hourly rate
for you to essentially earn that 100K.
- Wait, question: does it have to be hourly though?
What if I'm working from monthly?
Do people do that?
- You absolutely can do that,
but this is just something that you wanna kind of
keep in the back of your mind as your hourly rate,
so that when you do give your estimates
and your projects and things of that nature,
you kind of equate your hourly rate into that.
Cool, so it's gonna take me a week,
I'm gonna be spending 20 hours on that this week,
and whatever that looks like.
Then you'll estimate the project by,
cool, it's gonna be $2000 for this project,
you know it's 20 hours, but you're not going,
cool, it's gonna be an hourly rate of $100.
It's gonna be, cool, this project is $2000,
but you know, I'm spending 20 hours,
basically $100 an hour, maths and stuff equal that range.
- Maths and stuff.
- Yeah, it's an official term.
And now, with your quote,
like you have all these things in there,
you do wanna stay away from your hourly rate
within your proposal. - Why?
It scares people because they can think that
maybe you're just gonna kinda slack off
and hang out and stretch this out to a million hours.
Who knows? - That's a good point.
- There's no real definite stop and start point,
so they're like, well, are you just gonna keep
working and working?
What is this actually gonna cost me?
But you do your estimates, do your maths and stuff,
and then you'll have your project estimate of,
cool, it's gonna take me two weeks, 20 hours, $2000.
So the project proposal's going to be for $2000.
- I've talked about this a lot when I first joined
GoDaddy social 'cause we offer social media service
for businesses like yours.
And a lot of the time when people would ask,
well, how much do you charge to do all the social media?
- All the things. - All the things.
They generally assume, businesses assume
this must be an hourly thing, and what we actually,
when it comes to social media services,
we do monthly pricing which makes a ton of sense to me,
and I actually always tell businesses,
if someone's trying to charge you hourly,
be careful with that.
Like we have a set price, and give like
what we're gonna do each month.
And I just, to me, as a business owner,
if I were looking for social media help,
I would want that, a monthly flat price.
But I could see how, in different circumstances,
hourly would make more sense.
- Yeah, and I love how you brought up that
you include what you're going to do,
and we talked about the scope creep earlier in the episode,
that scope creep is super real
so make sure you include exactly
the services you're going to provide in that proposal,
whether it's bulleted lists or paragraphs,
whatever makes most sense for you
to really describe what the client is going
to get out of it.
- Yeah, and also I found, too,
when I was selling social media services,
businesses really wanted to know,
yeah, what's in it for me?
What are you going to do?
But also provide an example of it.
That was a big thing, too.
It's like, okay, you're gonna manage my Yelp.
What does that mean?
What does that look like?
Well, talking to a dentist,
show them a dentist on Yelp that we're managing,
and a review that they received,
and how we responded on behalf of the dentist,
and then they could see like,
oh, that's actually a really good response,
and you're gonna do that for me?
Cool, I don't have to think about how to respond
to these happy and maybe unhappy patients.
All right so as I was mentioning,
really important and we're talking about explaining,
hey, this is what you're gonna get,
and this is what we're gonna do for you,
that's really great accountability.
But imagine there's a fine line too
with how much you say.
Like you don't wanna give away your secrets.
- Yeah, you don't wanna sell your secrets,
you don't wanna lay out exactly bit bit for bit
of what you're going to do because
one, that document's going to be incredibly long,
and no one's gonna wanna read that.
Ain't nobody got time for that.
- No one has time for that.
- But then you don't wanna give them
basically the foundation of what you do
'cause it might sell you short,
or they might go, cool, I'm just gonna do that myself,
thanks for all the information,
have a great day.
That was free 99.
- Yeah, thanks for all the tips.
- Right, focus on the benefits of what they're
getting out of your services,
not necessarily the strategies, tactics,
and all the features.
- All right, the moment you've all been waiting for.
- What's that?
- How do you get paid? - How do you get paid?
- How do you get paid?
- So in your proposal, you need to spell out
how you get paid and the terms in which you get paid.
I know what's super popular is--
- Cash money. - Also cash money.
You're not wrong.
But a 50% deposit down, and then 50% upon completion.
That way you at least get something
in case things go sideways.
But then, upon completion, at least map out,
what that looks like.
Are there revisions to your process?
Are there extra steps that need to happen?
Is there a set time of like,
cool, it's finished, I need to get paid in seven days.
Otherwise there's late, are there late fees
for not paying on time?
- Oh that's a good one too.
- Whatever that looks like, have that included in there.
- That'll add up.
- You also wanna make sure that you include ways
just different ways of getting paid.
Not everyone likes to use PayPal,
not everyone likes to use a credit card.
Have different options in there.
- Venmo.
- Venmo, I know I use that religiously.
- I'll accept your payment via Venmo.
- And hey, being a freelancer is tough.
You're constantly chasing down money,
sending in invoices, doing the work--
- Lots of work.
- Doing literally all of the things,
so it's good to have this proposal
and quote system in place to keep your longevity
and your work protected. - Your sanity!
- Right, all right, that's how you create a quote
and proposal and all the things you need in it.
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