Dec 16th, 2020
My husband, Brooks, is a General Contractor, so I’ve lived in a world of bidding and estimates for a long time. When a homeowner decides to renovate or add on to their home they’ve usually already gone through a season of preparation whether it was financial, mental, or trying to agree with their spouse on a design (not that I would understand that one!). Once they get to the point of engaging with a Contractor they may face trepidation, confusion, and certainly shock over the estimates they get. Construction is a different world and trying to guess the price that someone will quote you is not in any manuals or books.
If you have hired any freelancers, coaches or consultants for your organization you may have felt some hesitation over engaging with them at the package price or hourly rate they quoted you. How in the WORLD do you know if it’s a good price, if it’s competitive, or if it will provide the value for your organization you need?
Whether you are exploring the idea of outsourcing or you’ve already started engaging with outside experts, these are great questions and really important to ask yourself and your team as you step into a whole new world. No one can give you a black and white answer on who to hire and how much to pay because value and expectations are highly subjective. What I can do is give you a few things to consider and be aware of.
Three Bid System
For everything I contract I get three bids and that is what I have required from people I worked with. Property insurance, document disposal services, window washing, or accounting services - it gives you context. You’re able to learn from each conversation, understand the small differences in product or service, and gauge the type of connection you’ll have with a company or individual.
The concept of freelancers and consultants, at least in this post-2020 era into which we are moving, is largely virtual. Even organizations who were previously opposed to remote workdays and felt the need for daily face time have made great strides in opening their minds to more flexible work environments.
For the projects or functions you are planning to outsource, does it matter if people live near you? Will they honestly ever need to set foot in your office? Do they even need to live in America? I have worked with great creatives and data specialists who are outside the U.S. offering budget-friendly pricing and supporting myself and clients for years.
If your organization is in New England, does it matter that your contractor is in Florida or Seattle? We live in such a digitally connected world that while these geographic gaps may have carried a great impact in previous decades, I find that there are few nuances to your location that can’t be easily communicated to a freelancer. They are used to dealing with a wide variety of clients, so they are usually able to adapt quickly and read your organization’s culture very quickly, otherwise they wouldn’t be in business very long.
Geography CAN determine pricing, even within the U.S. The liveable salary in a small Ohio town is obviously less than New York City. Location doesn’t necessarily determine someone’s skill level, but be aware that if you connect with a graphic designer in NYC, you’ll probably pay more than the equally qualified designer in Ohio.
Style, Software, and Platforms
Evaluate the style of each company or individual you are considering. You will find people who have a very specific style and who won’t necessarily be able to work outside of their defined zone and you will find people who are able to hear your vision and objectives and develop a very customized approach to the solution.
An accountant might prefer to just be a bookkeeper and that’s all they offer. You may also find an accountant who is able to assist with financing needs and strategy, offer CFO-type observations and assistance, and perhaps be able to subcontract an auditor so that you continue to have a single point of contact.
If you use someone the latter accountant only for bookkeeping you may pay more because their capabilities are so broad.
If you are looking for someone to help you choose, set up, and optimize a new CRM system, you could find someone who has a 6-point system they use to walk a client through a new CRM integration and they only work with a few specific systems. Alternatively you could find a coach who can learn any system quickly, so they will work with you on any software platform and they will listen to your needs and design the implementation plan along the way to your unique customizations.
You will have to choose the style you prefer and choose what that is worth to you.
This might seem a little obvious, but when you decide you have a project or position you want to outsource, exactly how much expertise should your freelancer have? This is actually one area that may depend on you slightly more than the freelancer.
If you decide it’s time to bring in someone to write a series of emails and design graphics that will work with these emails and double for social media, you may not need an expert in each area. If you don’t mind editing and offering feedback and advice you can choose a beginner and pay a lot less.
One nonprofit I worked with was in a college town - lots of colleges - so they usually had interns handling a lot of content creation. Sort of similar to using freelancers because these interns won’t all turn into employees and they are usually with you for a short time.
I’m not good at graphic design - I can’t pull an abstract concept out of my brain if my life depended on it, but when a designer gives me a draft, I know if I like it or not; I know if it fits branding standards and communicates what I need it to communicate. Once I have a rough draft I can suggest edits and as long as I know this is what I have planned for I can wait on a few revisions.
The same goes for writing - I can glance through and make a few edits, either sending them back to the writer or just making the edits myself.
If you are able to manage projects like these, then you can get away with a cheaper freelancer. If you do not have the confidence or the time to offer feedback then you’ll probably want to choose someone more experienced and be okay with paying a higher rate.
Side note: Part of how I’ve designed Copper Hive is to help you navigate through decisions like these. While we do offer consulting packages to go deeper into solidifying your organization’s foundation, we also provide individual coaching sessions to listen to your challenges and opportunities, then guide you through solutions that align with your budget, culture, and goals.
Benefits & Liability
Although there are other areas to consider when determining appropriate pricing for the consultants and freelancers you choose, I’ll leave you with this final thought.
Maybe minimum wage in your city is $11 or $13 or on its way to $15 like it is here in San Diego. You try to pay your staff a little above out of a caring attitude. When you consider hiring a freelancer you do not have to pay for any benefits, they are not added to your workers comp policy as individuals, they are not using electricity or any other facility-related expenses, and you do not have any long-term commitment to this person, so it is not an even trade.
You will likely pay a slightly higher rate for a freelancer, but the time-limited commitment will save you money in the long run vs. having someone on staff you are paying every week.
Especially project-based freelancers can provide an enormous amount of financial and legal freedom. As I mention legal freedom I’ll remind you to always pay attention to state and federal laws on 1099 workers for your organization, but if you are using them legally, you can save a lot of money in the long run.
Determining a fair or market rate for a freelancer is a little like the saying, “beauty is in the eye of the beholder”. You have a budget you have to stick with, but you also get to decide what provides value to you and what you are willing to pay for.
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You can find more resources and articles from Rachel at www.copperhiveconsulting.com.
Rachel and her team at Copper Hive Consulting offer consulting packages and coaching to churches and nonprofits with a focus on operational strategy and structure. She also has an expansive network of freelancers who specifically prefer serving nonprofits and with whom she shares contract position opportunities. Schedule a free discovery call with Rachel to find the right coach or to share your job opportunities with the freelance network.