If you complete the project in 80 hours, then the client pays $8,000.Īnd therein lies the problem with hourly pricing… Hourly pricing punishes efficiency If you estimate that the project will take you 100 hours (and your rate is $100 per hour), then the “do-not-exceed” limit is $10,000. Completing the project faster saves the client money. In other words, your estimate sets a fixed-price “maximum” for the project. The message is clear - if you exceed the limit, then the client will be unhappy (unless it’s due to circumstances on their end). This limit may or may not be written into the contract, but, at the very least, it will be agreed upon verbally. With your estimate and hourly rate in hand, they multiply the two and arrive at a “do-not-exceed” limit for the project. They want to know your hourly rate and your estimate for how long it will take you to complete the work. There are many agencies and end-clients who want to work with freelancers who bill by the hour. ![]() For every hour that you work on a project, you get paid a fixed amount.įor example, if your rate is $100 per hour and it takes you 100 hours to complete a project, then you walk away with $10,000. Hourly pricing, or billing by the hour, is straightforward: you sell your time for money. This means that you work less to make more money. Hourly pricing may seem the most straightforward, but project pricing (or fixed pricing) can lead to much better profits. There are several pricing options that you can use, but the most common options are hourly pricing and project pricing. To run a successful business, you need to price your work effectively. ![]() Pricing plays a key role in any freelancer’s or agency’s success.
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