Questions regarding hourly rates, contracts, and work load.

[definitive]

Since I've been doing freelance, I've been mostly doing set fee projects. It might seem nice, but eventually after getting too many clients, it becomes a headache, because at times I can end up spending more time on a project than its worth, and not get paid enough for certain projects. While some clients agree to pay extra for revisions, others don't.

The issue I'm having with implementing an hourly rate is that I don't really know how to do it/pitch it to potential clients. I work from home, and usually don't have clients coming over. When I tell them that I charge a certain fee per hour, the first thing they ask is "well how will I know how many hours you'll be working on this and not simply charging me for random amount of time?" I can't simply say "You'll just have to trust me on this" or "You can come here to sit and watch me work" because a) Different projects can take up different amount of time for me where I can make one flyer in a matter of minutes, while another one can take me a couple of hours, and b) I don't want people sitting over my shoulder because that is distracting.

Small fish and contracts: Is it really necessary to have some kind of a contract with someone who's paying under $500 or even $1000 for a project? What about contracts if you're taking deposits? In most cases I've either taken ~25% deposits for projects that are over $300. For stuff that's less, I usually don't bother asking for deposits or upfront pay (this is mostly because these are customers that I've dealt with for several years, and they've been reliable since the time I've met all of them).

Back to the first paragraph: Should I ever stop accepting new clients if I get overloaded with work? Some days I can spend working more than 10 hours in front of the computer to make sure that all the deadlines are met (even if clients need some last-minute projects done for them). I have no problem with spending this amount of time working (while taking breaks), but I'd just like to get someone else's point of view regarding this.

 

[dreamyguy]

Just some quick thoughts on this...

I've been charging hourly rates for many years now, and I work from home. Yes, most people have a problem trusting an arrangement like that, so you'll have to put some time into building that trust before you even start the project. I usually do this:

- First rule: say NO when you have to. This is supposed to be a mutual win-win business. I like to know who I'm dealing with before I let them sit on my cab... will they pay me by the end of the ride?
- Show all projects I've done myself or was involved in, taking care to add an honest description.
- I add a couple of words about the success/satisfaction of the clients in each project, also about our communication. Short and positive.
- While discussing the project, I brief the client with all possible challenges I'm going to face, and what kind of compromises he/she might have to make to avoid going beyond the budget.
- Give them good advice, the kind of advice people would pay for. They will feel more secure knowing you know your field.
- I don't overrate my skills, I make sure I have them. The worst thing one can do is tell a client the product will be awesome and deliver something cheesy. Do awesome work and clients won't hesitate to pay for it.

And a suggestion for your own sake... Bad quotes lead to bad consequences. Fixed rate quotes would never do for a taxi driver that's not very sure how long it will take to get to the destination, no matter how good you are at shortcuts. Beware of clients that don't really know what they want.

Best of luck,
Wallace

 

[THX1139]

This is simple, don't charge by the hour. I always charge by the project and figure that out based on what the client is requesting, the difficulty, the speed of turn around, and my expertise in the area. I have a spread sheet that crunches the numbers and let's me come up with a proposal. I submit the proposal, and it they agree to it... it becomes the contract once it's signed off (and they pay the deposit). As for nickel and dime clients, you have to be careful or you will waste time servicing their needs. In my experience, the cheap clients need more handholding than bigger ones. For that reason, I usually charge more for the simple jobs unless I'm not busy and can knock them out quick.

I ALWAYS work with a contract. Depending on the client, I usually collect 50% upfront and the remainder upon completion. If the job is large and stretches over a longer period, then I might break it down into 3rd's and collect on milestones. If the project is so small that you don't need a contract, then you shouldn't be taking the job. Waste of time unless it's slow. But then you should be spending the down time marketing for bigger clients.

If you bill by the project, you still have to track your hours so that you can gain more accuracy in your estimates. Plus, it will let you know if you are losing money or not. It's really easy to be busy as a freelancer and go broke at the same time.

 

[graphicsward]

you need a contract!

I won't work without a contract, there can be too much confusion if you don't. A contract says exactly what you are doing and exactly for what compensation.

Depends on the project and client but I generally take 25% down and the rest upon completion. I like the idea of milestone billing but don't like accounting so I only use it on really big projects.

As for hourly verses set price I play in the best of both worlds, always a set fee for the project and a set amount of revisions. After the agreed amount of revisions I charge an hourly rate. This has worked great for me and the client always knows how much they are spending. Helps keep the back and forth changes down to a reasonable level too. I've worked this way for a year and a half and with good communication and a good creative brief I very rarely charge hourly.

graphicsward.com

 

[Consultant]

Perhaps include say x round of changes in your price. Beyond that it's $x per change.