Freelancers: Should you charge hourly or based on projects?
When you start a freelance business it’s not always easy to choose between charging an hourly rate or billing based on your projects. Each of these methods has their own advantages. In this article, we will review these methods and the benefits that each one offers.
Billing by the hour
If you are still hesitating between hourly rates or project pricing, we suggest you review these two methods to make your choice easier. Firstly, charging hourly rates can either be an effective method or an inconvenience. As a freelancer, it is recommended to bill by the hour when you are certain that you can quantify your work in terms of hours, but also when you already have credibility with a customer. In the end, charging by the hour can result in higher rates that may not always be accepted by your potential clients.
Furthermore, charging by the hour can be tedious. It is not always evident when starting a project how much time is going to be required for an order. Additionally, unexpected issues can arise which could delay delivery. As a result, you would have to time yourself on each task to stay within the number of hours allocated for an order.
Based on certain studies, charging by the hour is not favored by clients. They have a hard time deciding if you are really being honest about the necessary time needed for an order, or if you are just taking advantage of them. Finally, if during the course of your project you realize that you need extra time, the client may be able to refuse this request simply for reasons of time or budget. Therefore, it can be a real risk to you if a client cancels their order while you are in the middle of a project, causing you to lose time and money.
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On the other hand, charging fees according to projects is another option available to you. Unlike some other professions, it can be more interesting and advantageous for someone who is self-employed to use this method of billing.
Why? First of all, this method of billing allows you to set an overall price for the project. Therefore, regardless of the steps and time required, the total price corresponds to the total order. This is a notable advantage because it gives you just one deadline to meet, without needing to time how long each step of an order takes.
Additionally, billing for productivity allows you to be compensated for the value of your involvement in the project. You are not bound by time, and therefore under much less pressure when working.
Finally, if the client wants to make any modifications to the specifications of the order, you can easily increase the overall price of the project, without the risk of facing a cancellation of the project by the customer.
In conclusion, we can confirm that it is more advantageous to set a project fee for logistical or financial reasons.