Money is on a lot of our minds this season. Either we're worried that we don't have enough, or we're trying to make the most of what we do have. Either way, charging for your work becomes more and more important. But how do you charge? Coming up with a
pricing structure or just
deciding what to charge can be hard. If you decide to bill for your hourly work, how do you
decide on a fair rate? And how do you go about deciding to bill
at a flat-rate vs. hourly? If you do freelance Web design, what is your preferred method of charging customers?
Before you ask, when I say "by the project" I mean that you charge a flat fee for the project work. By "Flat rate" I mean that you have a standard rate that you charge for all projects - such as $10 per page or $1000 per image. I know that some of you will want to say "I charge how the client wants to be billed" - but how would you charge if you could set the rules?
Comments
I find charging by the hour gives me the most flexibility. I keep track of time, and bill, in 5 minute increments. When a customer is new, or is being difficult, it is very simple to count the time very strictly. For an established customer simple changes and updates may or may not be counted on the next bill.
I do tend to fix mistakes on my own time, if the fault was mine. When the customer asks for a change or addition, and the amount of time is going to be significant I can discuss how the amount of effort may differ from the apparent ’simplicity’ of the result.
On new projects I often quote ‘about 10 hours’ for the first page, 4-6 hours for additional pages. This includes graphics and navigation design - for a non-difficult customer this is usually quite pessimistic, and I charge for the actual time worked.
When bidding for a contract, I always break a project down into the number of hours I estimate it will take me to complete and use that to give clients a “big picture” estimate of what something will cost them. It’s all based on my hourly rate, however, and I make that clear to clients: if you want anything above and beyond what’s in the initial contract, I charge $blah per hour.
If the client is more comfortable with a lump-sum payment, I add a few extra hours onto my estimate for the inevitable breakage of code or mid-project design changes. That way, if my personal estimate of time was correct, I can seem like a miracle worker.
I generally get paid a flat fee for the initial project. The fee can often range from a few hundred to thousands. It depends to a great degree on the client as well as the actual project. I will work for a lower fee for some individuals than I will expect from corporations and agencies.
I also consider the likelihood of an ongoing relationship, and the project’s portfolio potential, in deciding what fee to accept.
I always require a 50% deposit and/or a contract to start.
For ongoing work, maintenance, etc, I use time-tracking software (currently Ora Time & Expense, a great Adobe Air app) to generate statements. I prorate to the minute.
For colleagues, I will often barter, my programming for her design etc.
I charge a flat rate for designing the template, which includes the header, navigation, footer. I came up with the flat rate based on how much time I thought it would take me to design the overall template. Then I charge a per page fee, which is also the same as my per hour fee, for building the content of the individual pages. This concept is easy to explain to clients. I run into a challenge of knowing how to charge for very lengthy (lots of pages) websites because once I have the template, it really doesn’t take long to flow content into it. I’m just starting out as a freelancer so I haven’t run into too many websites that have more than 10-12 pages.
For ongoing maintenance, I charge by the hour at 15 minute increments. Those quicky changes that take less time I have a tendency to overlook.
Although I voted in Jennifer’s poll for flat fee project, the reality is that I use flat fee project and hourly rates depending on client preference and type of project.
I find charging a flat fee for creative projects usually beneficial to clients; I am a perfectionist who often spends an inordinate amount of time to ensure everything is “just so” - which translates to inevitably running over my initial time estimate (or maybe I’m just a lousy estimator :p) Rather than stress out about how to justify the extra time, especially when the additional effort is often for nuances that might not be immediately obvious to my client (or theirs), I inevitably eat the extra time so I might as well be charge flat project.
Though this approach works well for the client, I am hoping to soon strike a balance that is fair to both clients and myself.
However, for maintenance contracts I usually charge by the hour unless the client is more comfortable with paying a monthly fee for a pre-defined number of hours. In the event of unused hours in a given month, these hours can be rolled over to subsequent months (though it doesn’t happen very often).
From my past experience most clients want to know what the total cost of the project will be before they agree. It’s very tough to have a client agree to an hourly rate unless you give a ceiling.
I’ve posted an article on this subject and how an hourly rate is important to figure out either way:
http://www.earthlingworks.com/blog/articles/how-to-charge-for-web-design