How to Negotiate Freelance Budgets

Nobody likes talking about money, but it's good to talk about this stuff. Whether it be with your friends, colleagues, or just strangers you meet on the street (ok maybe not them) I think it's good to be able to talk about budgets freely. If we want to get into conspiracy theories I think the reason it's become taboo is because bosses originally didn't want people knowing what they were paying each other so they could get away with paying people as little as possible.

So I think it's a benefit to ask your friends or colleagues who do similar work to you what kind of budgets or pay they got when they were working their gigs. Some people don't like talking about this though so I find it good to always ask if it's ok to talk about before you dive in, but that can be very helpful with knowing what kind of budgets you can expect for what kind of projects.

So let's get down into the nitty gritty for a moment and try to figure out what we would do if someone asked us what our rate was, which happens very often. So let's break this down into some of the basic questions you'll probably be asked.

What is your hourly rate?

So they might ask you what your hourly rate is, in which case, what is your hourly rate? That can be tricky to figure out, but a good way to think about it is to make a comparison as if you were in an hourly position. Salaries vary widely, but we'll presume we're someone who hasn't been working in the field for that long and doesn't have an Oscar.

We can say that 40,000 dollars a year is a good starting salary, so we can do math to figure out what that would translate to an hourly rate as.

Or instead of doing math we can use this website which makes everything easier. So at 40,000 bucks a year that's about 20 bucks an hour (always round up also if you get a weird number).

So that's a good starting point for an hourly wage, I'd say never go below 20 bucks an hour.

Remember too, the longer you work in animation and the more projects you do the more that rate can go up.

What is your day rate?

Another question you'll get is what is your day rate. Instead of an hourly rate, a day rate is simply what they'll pay you flat out for a days worth of work, which is generally an 8 hour day 9-5.

To figure this out you can simply take what your hourly rate is and times it by 8 to get your day rate. Once you know your hourly rate you can figure out your day rate very easily.

How much can you do this for?

This is the toughest question you'll get asked when negotiating freelance work. Them asking how much you'd charge for whatever the project is. The best way to go about this, is to do almost the same thing you did with the hourly rate but to your day rate. How long do you think it's going to take to complete the project? 3 days? A week? A month?!

Take your day rate and multiply it by however long you think it will take you to complete the project, then that can give you a rough estimate of what the budget would be. Remember to always round up as well, so if you end up with a rate of 2,800 dollars it's easy to push that up to 3 thousand.

Clients won't see a big difference between 2,800 and 3 thousand so you might as well try for an extra 200 bucks.

Weighing the Project vs the Pay

Something you'll find in animation and the arts in general (especially when you're starting out) is people saying "We can't pay you but it'll be great exposure!" This is almost never going to be the case. You should almost never do free work, you have to pay bills and buy food you need money.

If they're a big enough company or client that they would actually get you good exposure, they can afford to pay you. Why would you do work for free that is someone else's idea when you could make your own idea for free and get similar if not more exposure? Free work is almost never worth it, unless it's for charity or another type of non-profit cause, it's rarely worth the headache.

It's important to remember too that all the work you are doing, is making the client/company more money than they are paying you.

On the other side of that coin however is the fact that you will come across bigger name clients and projects that may not be paying you as well as some of your smaller projects have. Here you'll have to figure out if it's worth taking a little bit less money so that you can have a bigger, recognizable name in your portfolio.

Sometimes it is worth it to take a little bit less money to work on something that you think will be a good portfolio/resume booster. But again, never work for free unless it's a special circumstance.

Negotiating

Everyone hates negotiating, it's not fun and it's awkward and it gives me a stomach ache. That being said, I've done it a ton and the outcomes are usually one of three things:

1. "Ok that sounds great let's start the project."

2. "We had this figure in mind."

3. They stop emailing you back

The third option I find is really rude but it happens, the least someone could do is shoot you and email and say your price was too high and they're going to go with someone else. But it's no skin off your back if they don't email you back it wasn't meant to be in the first place.

The first two are much better, the first being the best obviously.

When you go to negotiate with someone, I've been told never to throw out the first number, it's better to ask them what they were thinking budget wise. That does two things really quickly that can benefit you.

There's a chance they're thinking of a number higher than what you're thinking, in which case you just got yourself extra money! If their number is incredibly low for the project they're describing that's a red flag that maybe it might not be the best fit for you guys to work together.

By asking them what they had in mind you get the conversation started in your benefit, and can respond with either saying "that's great" or "that's a little low for what you're describing."

When I'm negotiating if the number seems low, but I need the work, I'll often start the conversation going in the direction of "for this much money I will do this much work." So that way everyone can come away benefitting, they get their project done, you get paid, and you don't over exert yourself for the money.

It's a tricky balance and it's never fun, but the more you do it the more you'll get used to it and the easier it will become I promise.

Biggest Piece of Advice for Freelancers

Now freelance is inconsistent, there will be weeks where I am working from 8 am until midnight every day, and then there are weeks where I'm just sending emails and waiting around. It's a strange thing.

That being said, when you're working freelance you need to remember that there might be a time after whatever project you're working on where you don't have any other work. You could go from being gainfully employed to painfully unemployed (I am so proud of that word play) over a weekend.

So how do you deal with this and make sure you can pay your rent and not get evicted? You need to build in buffer money into your projects.

So when I'm pitching on a project, I will do what we did earlier and figure out the budget or day rate, then I'll add on some extra cash with the idea that it will hold me over until I get my next project. Then I'll add on some extra cash onto that, to help hold me over after that project.

Another piece of money you should be working into your budgets and negotiations is for taxes, since you're a freelancer you'll have to pay your own taxes they don't take them out of your paychecks. Because of that you'll need to add some buffer cash for that as well.

In Conclusion

So freelancing is tricky, and budgets range widely, but here again are my biggest pieces of advice for negotiating and figuring out your pay.

1. Ask your friends and colleagues what they've gotten paid for similar work.

2. Figure out your hourly rate based on what someone with your experience would be making in a salaried position at a studio.

3. Figure out your day rate by multiplying your hourly rate by 8, making it a 9-5 day.

4. Figure out whole budgets by multiplying your day rate by how many days you believe the project will take to complete.

5. DON'T WORK FOR FREE!

6. Add some buffer money to cover your downtime between work and taxes.

It's a tricky balance and you're going to mess it up, lord knows I have, but that just comes with the territory and everything will get easier the more you do it with the more practice you get.