“How should I charge my clients?” This is the age-old freelancers debate, and the answers vary – sometimes from client to client. There are many factors to this question, and it can depend on your previous experiences, your skills, how efficiently you get work done, and even how much your salary goal is, or if a particular job is gratifying for you.
For many, the solution may be found somewhere in between the mix and match of hourly rates and project rates, but in this article, we’d like to make a case for charging your clients an hourly rate: making work relationships simple and straightforward.
Below are a few benefits for hourly rates, and some situations when it’s in the best interest for both you and your clients. So to begin, we need to understand what both parties are looking for. What do your clients want, and what do you want?
Generally, your clients want quality work, completed on time, and hopefully for the least amount of money possible – or at least in their budget range.You on the other hand, want to make sure that you get paid fairly for your the time you work, and for the skills you bring to any given project.
With that in mind…
Hourly rates can be gratifying for freelancers
You know that you’ll be getting paid for the time that you spend actually working, and can make it easier to set up ‘normal’ working days, by dedicating a certain amount of hours per day, and even calculating your estimated salary.
When you get paid hourly, you avoid those overworked and underpaid schedules because you know that each hour of work is accounted for, and compensated accordingly.
Hourly rates can look simpler and more manageable to clients
This is especially true for those who are looking to pay the least amount possible. It may not seem logical, but reading $20 per hour in an email automatically looks less threatening than a $500 project, and if you do the math right, will probably end up paying you the same amount as your estimated project price.
But one of the biggest reasons for going by an hourly rate is the common and unpredictable misunderstandings that come with project rates…
No matter how clear at first, many projects turn into snowball jobs, where the end becomes unclear.
With hourly rates comes less contract hassle. You’ll sign one contract indicating your hourly rate, and work until the job is done. Unfortunately, with project rates you may find yourself going back to your client asking for additional contract amendments every time your project goes overtime, or requires more work then you had originally agreed upon.
Project rates can become complicated, as many clients ask for revisions after the initial project price was set. This leads to haggling over the project price, or deciding on a separate hourly price for edits, which can be frustrating for both you and your client. Many freelancers find themselves in this sticky spot, and those who hate haggling may even end up working for no additional cost, just because it’s easier to finish the job without bringing up additional prices (or because it’s hard to know what to charge for 10 minute edits here and there).
Hourly rates are a better method for working with less-organized clients
For example, project goals are unclear, or the preferences and instructions fluctuate during the project. This leads to a lot of revising and reworking, and can point to a lot of unpaid (and frustrating) labor for you. When clients know that they are paying you per hour, they are more likely to prepare clear project guidelines, and won’t give you as much of the nitty gritty ‘editorial’ work. This is also true when your job description or role becomes unclear – for example, you may land a writing job and suddenly find yourself writing emails as part of your ‘project’. Therefore, when you charge hourly, your clients will think twice before giving you these kind of side jobs.
When miscommunication happens, freelancers have the right to expect a fair pay, but many clients may feel that asking for additional payments is going against the original agreement, and tensions may develop if the project continues on those grounds.
The best thing to do if you find yourself in this kind of situation, is to switch to an hourly rate for the rest of the project revisions.
But before you find yourself in this mess, start work relationships off on the right foot by making sure the contract is as detailed as possible – outlining the project goals and milestones from the beginning. You should be able to give an estimate range of hours for the project – based on previous experience, making some room for revisions, back and forth and your own judgement. Most importantly, making sure to state in the contract that any work that is outside the detailed scope will incur additional hours.
But what’s in it for your client?
We’ve pointed out some benefits for you as a freelancer, but what will make your client jump on board for the hourly train?
Many clients, especially those who don’t understand what goes into the work being done, may feel cheated if freelancers add additional costs to their initial project rate. Clients often like the idea of taking a project rate because the price tag is clear and does not fluctuate; they can easily add it to their budget statements and feel secure that it is the final price. This can be a good thing for freelancers but can easily go awry when any of the above incidents take place – unclear goals, constant revisions, and the like.
By using an hourly rate, it will be more clear to your client where your time and effort is going on the project. Additionally, if you use a time tracker, such as Time Doctor, working hours are accounted for by freelancer and client – helping you have more productive working hours, and your client the reassurance that they’re paying for time well spent.
Not everyone chooses one side or the other
Many freelancers may use hourly rates with certain projects or clients, and project rates with others.
As you can see, there are many benefits for charging an hourly rate – both for the satisfaction of your hard work, and the straightforward business with your clients – but don’t just take my word for it. The freelancer’s job is a flexible one (and isn’t that why we love it?), so feel free to play around with your hourly and project rates and see what works for you and your business.