Long debated by a Freelancer approaching a project – especially with a first time client, do you offer them a fixed price or rate per hour? You want to seal the deal with as little fuss, maybe you are worried the client will go elsewhere if you make things too complicated or piss them off, after all this is all boring admin stuff.
All you want is to get started on a project but the client wants to know how much it’s going to cost. It then becomes a roulette game for many freelancers, do they risk the fixed price to get the project or do they stick with hourly rate?
Reasonableness will dictate that a fixed price, is not a fixed price forever, with the right project management application – all tasks and requests can be chipped away from a fixed price. It is an assumption based on a certain number of hours and no ongoing support or maintenance – or is it? Many freelancers advertise packages such as “$500 for your new website” – while these might be sales hooks, in the mind of the client, thats the fixed price they are going to pay for everything – All the Work, Requests, Revisions, Feedback, Changes, Maintenance and Support!
Clients look at it as if they are buying a car(insert any other tangible product!), the car dealer is not going to tell you that the car will stop after 2000-miles and you have to buy more car. The problem with fixed price, is that in your clients eye, they see a price for a wrapped up service or services sold as a product.
Many freelancers use the fixed price system and add in buffers to protect them for changes, maintenance etc but the problem therein is that it can lose trust if you have set a fixed price of $1000 and final bill is $3500?. What happens when you have completed the project and the “snag list” appears with countless changes and you work back on the total time spent on the project ends up at like $2 an hour, the relationship can quickly sour with the client when you explain that you wont be doing anymore work or that their “hours” have ran out.
Clients don’t see it like this – they bought the car, the car should work, if it doesn’t work it goes back to the garage. They don’t want to know how many hours the car took to manufacture and ship. They just want to use the end product and drive the car.
Working per hour is the perfect world for a freelancers and it gives creative freedom and less stress, it can also the favour the client too. A project might actually just take an hour so why bother with contracts and agreements when it can be done in a few minutes? Also when that big project comes along and there is an hourly rate in place, this means there is more scope of work instead of been restricted by a fixed price.
There are many freelancers who don’t set out any contract with their client from the get go and this is something that must be in place even for an hour’s work.Its really the Clients choice as they are controlling the finances and its the freelancers job to make sure their agreement is tight, the agreement sets out X number of hours, days or weeks and any revisions will charged at Y – no fooling around!
Let us know your thoughts below!