One of the things that can determine your income and the number of hours you work once you enter the freelance economy is your pricing. But as many freelancers have experienced, setting a price for your work can be difficult – especially if you’re just starting out.
There’s no standard way to price your services as a freelancer, but many would advise either charging clients for each hour you worked. However, not all freelancers would agree to this suggestion. Some long-time freelancers suggest pricing your services per project, as doing so may allow you to dictate higher rates despite working shorter hours.
Should you charge per hour or per project?
There are differing opinions on which between charging on a per project or hourly basis is the fair pricing model. But before discussing how to price your services, here’s how the two systems work:
Charging per hour: The hourly price model means that your pay is dependent on your rate. This means that your income is dependent on how long you will be working on a project regardless of complexity.
Charging per project: This price model allows freelancers to quote a price for the entire project based on their assumptions on its complexity and length. This means if the time estimate is wrong, you won’t be able to charge extra for the extension.
Some feel that it is more advisable for freelancers who are just starting out to charge by the hour because some work may take longer to complete. However, there are others who advocate charging per project as the better choice as this may allow freelancers to charge higher.
For instance, you may accept a web design project that may only take you five hours to complete. Your income from this project would depend on the pricing model you use, as you will see below.
Home page redesign project | |
Per hour | $25 x 5 |
Per project | Total income = $200 |
From the above example, charging per project would generate more income. However, this isn’t always the case.
If your client is fussy and makes several changes, you may end up working on the project longer than expected. Consider the possibility that multiple client revisions extended your completion time to 10 hours. Your income in this new situation would be:
Home page redesign project | |
Per hour | $25 x 10 |
Per project | Total income = $200 |
As you can see from the examples above, both price models may give you the higher income, but it would always depend on individual circumstances.
What to consider for your pricing
Some established freelancers typically advise choosing one between a project or hourly price model. However, there are several factors to consider when pricing your goods and services.
Project scope
The scope and complexity of your client’s project directly affects the length of time you need to commit to it. This means you need to understand what the client needs from you.
Some clients may come forward with the details of what they want you to accomplish, while others may only have a vague idea. If you have a defined scope, you may consider estimating a project price. However, a project with vague parameters may extend too long and expand its scope often; consider setting an hourly rate for these.
Time and complexity
Consider the time you need to complete the project as well as its complexity.
Some simple projects may take time to complete if you are a beginner, or the type of project itself is new to you. Likewise, some complex projects may be completed quickly if you already honed your skills, gained an expertise, or it’s something you’re used to doing.
However, the time it takes you to finish a project is not a reflection of your efforts or the project’s value. Consider the value of your effort in completing the project and decide from there.
How fussy the client is
Some clients are easy to transact with because they already know what they want. However, there are some clients who only have a vague idea, change their mind often, or tend to expand the project’s scope.
The former is easier to work with because you both know what to expect, which means it may not be too difficult to complete the project and close the transaction with them. On the other hand, a fussy client may mean multiple revisions even after you have already completed their original request(s).
The client’s budget
The client will always go to freelancers with a budget or budget range already in mind, and this is what may cause you to lose a potential client if you price your services too high. This consideration would apply if you want to charge per project.
If you want to secure a contract, it’s best to consider the client’s budget when quoting the project’s price because some operate on a strict budget. The best way to know for sure is to ask your potential client how much they’re looking to spend for the project.
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