Hourly or fixed rate, which of the two pricing techniques do you think will make your freelancing career flourish? The answer is, it depends upon the situation that you are in. But, before going deeper, let us differentiate the two and learn when to use the two pricing strategies.
An internet connection, a computer, or a proper setup are necessary before starting your new career. Then, you will identify the services that you will offer to your clients. These are just a few of the things that you should prepare to start your work-from-home career. And one thing that many failed to do is charging their clients the right way.
When it comes to your pricing strategy, it is vital to understand both and identify when to use them. What’s the difference between hourly and fixed rates, anyway?
What is the Difference Between Hourly and Fixed Rate?
From the word “hourly,” you will be paid based on your hourly rate. Your total charge depends on the number of hours you worked multiplied by your hourly rate. As a newbie freelancer, this pricing strategy will help you charge your clients the right way. By identifying the total hours you rendered in working a specific task, you’ll immediately know how much you will charge your client. Remember that you need to be specific about the number of hours you should render in a week or a month.
On the other hand, a fixed rate is your charge for a specific project or task. Let say you will create content for Facebook and Instagram 5 days a week, and you’re going to engage with the followers. The flat rate that you set for that particular task is your fixed rate.
In this charging method, you need to state in the contract the stipulated price. In addition, you must include milestones and a pre-determined budget for each milestone.
When to Use Hourly and Fixed Rate?
In the case of unfamiliar, non-standard, or unstructured projects that do not yet have full scope, use hourly rates.
Since working with an unfamiliar scope of tasks with a new client, you will not be sure of that total work needed. Thus, charge per hourly basis. Also, charging per hour is ideal for you if you’re a newbie, especially if you don’t have a solid portfolio yet.
As a newbie, you must first establish yourself. So, charge the lowest rate possible and increase your rates as soon as you have fully adjusted.
Above all, use an hourly rate for freelancing jobs like:
- Ongoing ad-hoc work
- Unfamiliar projects
- New to freelancing
- Unstructured jobs
When you know the duration of most standard jobs based on previous experience, use flat rates. When you quote, assume that you will need time for meeting clients, communicating with them, and tweaking the work. It would help if you considered using fixed rates for a project with a clearly defined scope and a well-defined start and end. An example task good for a fixed rate is launching a website.
When you have an established, trusting professional relationship, fixed rates may be more acceptable to clients since they appear mysterious. To justify, you will present a good track record from previous work, reassuring the client’s need without an hourly document explaining your price tag.
However, suppose you’re a seasoned freelancer with a strong portfolio. In that case, you are in a better position to use fixed rates for new clients. Some clients prefer using fixed rates with new contractors since it sets expectations and removes the risk of you busting their budget.
Use fixed rates for freelancing jobs such as:
- Well-scoped work
- Short-term projects
- Budget-conscious clients
- Trusting relationships
Having learned about hourly versus fixed rates, are you ready to become a freelancer? And if you need online training to help you get started with your freelancing career, enroll with FVA’s Freelancing Course. It is an all-in-one course that makes many newbies become “Rockstar Freelancers.”
And, feel free to visit FVA Youtube Channel to learn more FREE freelancing tips.
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