By Don Sadler Donsadlerwriter.com
In reading blogs and articles about freelancing, I often see references to hourly rates and ideas for ways that freelance writers can raise theirs. I’ve got a better idea: Don’t charge hourly rates — charge project rates instead!
Charging hourly rates has never made any sense to me, so I’ve never done it. Think about it: Charging by the hour penalizes you for working fast. It actually incents you to work more slowly on projects in order to make more money. And who benefits from this? Nobody! You get less work done, and your clients get slower turnaround times on their projects.
Think about it: Does your client really care how many hours it takes you to complete a project? Doubtful. All clients care about is that you meet the deadline and produce quality work. The “number of hours” you spend on their project is irrelevant to them.
Charging on a project instead of an hourly basis requires that you change your mindset from how much is your time worth to how much is the project worth to the client. Now, I’m not saying that you shouldn’t consider the value of your time when pricing projects. But I am saying that this shouldn’t be your main consideration.
By all means, estimate how much time you think a project will take you. But only use this as a basis for your minimum price. For example, if you think a project will take you 5 hours and you want to earn a minimum of $100 an hour, then $500 is the least you would charge. But is the project worth $1,000 to the client? If it is and you just charge an hourly rate of $100, you’ve left $500 on the table!
Determining how much projects are worth to clients takes experience and knowing the right questions to ask. If you’re just starting out, it might be challenging, but I encourage you to start thinking about pricing with this mindset instead.
Now, here’s the best part: You can potentially make MUCH more money charging by the project than by the hour. Because I have worked in the same niche industries for more than 25 years, I can usually complete projects very fast. And because my niches — business and financial services — are fairly specialized and technical, I can charge relatively high project rates.
This usually enables me to earn much more money on projects than I could ever quote a client as an “hourly rate.”
“But what if a client insists on knowing my hourly rate?” you might be wondering. This has happened to me exactly … once — and I’ve worked with dozens of clients on hundreds of freelance projects over the years.
Why not give it a try? Project-based pricing could enable you to increase your freelance income considerably on the same volume of work you already have.