“What’s in a name? that which we call a rose
By any other name would smell as sweet;
So Romeo would, were he not Romeo call’d,
Retain that dear perfection which he owes
Without that title. Romeo, doff thy name,
And for that name which is no part of thee
Take all myself.”

This more comes into play when it’s an entirely new area or expertise that someone’s never, or rarely, dealt with which is accepted to make a few bucks and results in doing a job that’s half as good and twice as expensive for a client who doesn’t know any better.

I’m also an addict of change and like a good challenge, so maybe I’m just driven to try new things.

Great points and I definitely agree with you. Agencies will always make more sense when it comes to large, multifaceted, and multidisciplinary projects, no doubt about that. For the types of clients many freelancers/contractors work with, those just aren’t their needs and require much more focused, specialized deliverables, which, in almost every other industry, means a higher price. The point is that clients shouldn’t *not* choose agencies because they’re the more expensive option. They should examine their needs and determine whether an agency or a contractor makes sense for them based on their specific project, not just because a freelancer is a cheaper alternative. A bold proposition, I know, but that’s another blog post for another day. It’s simply about understanding one another, agencies can do things freelancers can’t, and freelancers can do things agencies can’t, doesn’t make one have a more valuable than the other.

Interesting. Super controversial post. It was enough to push me to comment. I have two points.

1) Contractors should charge as much as they can while still getting business.
2) The price premium paid for agency work is paid for more reasons than swanky offices.

Point number one is pretty self-explanatory and hopefully we agree on this one. Regarding number two, I’d like to point out that one of the benefits of an agency is the coordination of multiple participants/roles to deliver a product in a consistent way. Further, agencies typically have a reputation and a bank account to protect and if they screw something up they have an extremely strong incentive to “make it right”. A contractor can just close up shop tomorrow and suing an independent contractor is a waste of lawyers fees.

As a fun mental exercise, imagine if you wanted to run a project to create an online experience. If you do it by assembling a team of independent contractors you will need to find, screen, negotiate, and hire at least three different specialists (market analyst, designer, developer, copywriter, etc.). You need to bring them together, establish joint expectations about how they will work together, play referee as they frustrate and disappoint each other in a dozen minor ways, and somehow get this group to produce a cohesive final product. As a fun further exercise, imagine that you change the project scope partway through and you are now renegotiating three different contracts.

With all that said, I think I agree that independent contractors may be scared to charge their real value.

“But does a client want their hard earned money going towards running that business or direct work on their project?”
Kim, a customer’s hard earned money IS going to help run the business because the employees will be directly working on their project. You made a distinction without a difference.

My point is NOT to imply that the specialists need to get paid, it’s that the larger agency HAS the specialists who’s ongoing employment indicates the execution of their skills in a focused process. One freelancer (or small business owner) cannot be equal to five specialists. If one person has a job to answer a phone for an hour, they cannot handle as many calls in that same hour as five people collectively.

The business wants results. If they know specialists are focused, they will know they have to pay for it.

2. “A freelancer can accomplish much more for less money because there isn’t as much overhead, so that doesn’t mean a freelancer should just charge less for the same amount of work”

Another distinction without a difference. But this one does have some room for clarification. In the same sentence, you said a freelance can do more, but then said they are doing the same amount of work. The overhead you mention might include a production room, video production, a place for photo shoots, etc. If a freelance is hired to handle all of that, and can handle it, sure, charge for it. Those charges will probably include the freelancer hiring specialists in those fields, and it evens out.

3. “In fact, specializing and efficiency are generally associated with a higher price tag. Ultimately, it boils down to expertise. People want to pay for your time/ideas/expertise/etc. ”

I’m not sure if you are detailing this as a negative or not. I assume not. But if you want stark definitions, I’d say that whatever they pay for, in the end, they pay for the final product’s ability to accomplish something.

I’m sure there are a few rare professionals who can work a wide birth of specialties, but I still don’t think a freelancer can expect to make the same as a larger business. There are exceptions to everything, however. I do illustration that apparently few others can provide. I can charge a premium for my specialty. If they want the art to become a brand, marketed, and produced online, I’ll probably go talk to James (and then the price goes up because I just hired a group of specialists from a bigger business).

Great topic!