Fixed vs hourly fee?

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#1 JamesBarnsley  Icon User is offline

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Fixed vs hourly fee?

Posted 25 March 2012 - 07:34 AM

Fixed fee or hourly rate which one is best?
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#2 tlhIn`toq  Icon User is offline

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Re: Fixed vs hourly fee?

Posted 25 March 2012 - 08:05 AM

See FAQ # 39. (Click the SHOW button below)


TOP most asked:


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FAQ 2: How do I debug
FAQ 3: How do I make Class1/Form1 talk to Class2/Form2


FAQ (Frequently Asked Questions - Updated Mar 2012
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This post has been edited by tlhIn`toq: 25 March 2012 - 08:06 AM

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#3 sosom  Icon User is offline

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Re: Fixed vs hourly fee?

Posted 23 April 2012 - 12:22 PM

It's better hourly fee because you are paied for what you work...sometimes when you work with fixed fee is possible to estimate wrong the work time and then you may work for free. for example you may say you make a project in 10 hours and when you finish it realize you work at it 15-20 hours.
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#4 tlhIn`toq  Icon User is offline

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Re: Fixed vs hourly fee?

Posted 23 April 2012 - 01:01 PM

Better for whom? Certainly not the employer. Hourly promotes laziness. If you are going to get paid MORE for taking LONGER then there is no motivation for the employer to get better/faster at their job or their estimations.

If your argument for hourly is that you can't estimate your skills, then learn. Get a good tracking program like ToDoList that will track your time on each portion of a project. Use it for every project you do. As you do more projects you build a knowledge base that accurately reflects your real skill level.

As you become good at what you do and at estimates you can then bid a job for 20 hours, knowing it will only take you 15 plus some "wiggle room". Now you are making more than your hourly.

Its no different than a car mechanic. The 'book rate' for changing a water pump is 1.5 hours or whatever. If you are good at your job you can do it in an hour. Spread across the day you can clock 12 hours of jobs in 8 hours of work. That makes for good pay.

Flat rate means those that are BETTER get paid MORE. What could be more fair than that? Hourly is exactly the opposite. It promotes sloth.
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#5 no2pencil  Icon User is online

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Re: Fixed vs hourly fee?

Posted 29 April 2012 - 05:57 PM

A good, experienced developer should be able to know a realistic time frame a project should be completed in. You know how much you want per hour, so judge your production time, times the hourly fee, & quote the customer.

If you don't know how long it's going to take, then you are coding something that you are not experienced in. If this is the case, you should be able to judge your learning curve. Plus you are gaining experience with the work being completed.

The only time I charge by the hour is if I'm doing work on site. & this is mostly because the client won't let me be & do the work. They insist on asking 'why' a lot. Thus I charge by the hour for consultation/explanation.

If you can't judge your production time, imo you are not ready for freelancing work, because you don't know your language well enough to sell it as a service.
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#6 atraub  Icon User is offline

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Re: Fixed vs hourly fee?

Posted 05 May 2012 - 12:46 PM

In my humble opinion, you're much better off charging by the project. You, as a developer, should be able to estimate the amount of work a project will take you. You can then derive your fee from that.

Why is this better? Well, for one thing, your client won't know your actual rate! What happens if you want to increase your rate? It'll create an awkward tension between you and your client, you want more money, and your client will want the same rate he paid in the past.

Also, when people refer someone else to you, they'll give that person some idea of how much you charged. You might not want to give a new client the same rate that you've been giving a loyal one. Again, if the new client knows the rate you gave someone else, you're in an awkward position.

You may want to vary your rate based on the technologies you work with. I know I love working with .net, but if a client wants me to use Django I cringe. The added burden of working with Django is enough to make me want to charge more for the job.

You can also vary your rate based on focus factor. If your client wants it by a certain date, you can adjust your rate based on the number of hours you'll have to work in a given day. You might also be inclined to adjust your rate based on a remote working agreement.

You can take all of these aspects into account when you determine your rate, and then subsequently inform your employer of the fee. Your employer doesn't need to know how you decided that rate, he doesn't need to know whether you've increased or lowered your prices, he doesn't need to know any of that! Knowledge is power my friend. Determine your rate, then determine what that equates into as a fee, and then tell the client the fee. Don't weaken your bargaining ability by EVER revealing your rate.
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#7 teamfive  Icon User is offline

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Re: Fixed vs hourly fee?

Posted 22 May 2012 - 05:58 AM

Id prefer working hourly jobs right now..
You will be paid 100% for your work.. hehe :)
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#8 rgfirefly24  Icon User is offline

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Re: Fixed vs hourly fee?

Posted 22 May 2012 - 10:44 AM

I tend to like to work off of a system where it is both hourly and Project based. What I mean is, I will give you an estimate on the amount you will be charged for the entirety of the project, but when I bill you I bill you for the work I've done to that point. I've found that a lot of clients like this method because of the transparency. I have a rate I tell the client which I say is a blended rate say $125 dollars an hour. I then break it down and say that I will be spending X amount of hours on the project so based on that This is what you will be charged. I then bill the client either twice monthly or monthly for the work done up to that point. I also share a project plan with them so that they know that on X date I will be in design phase, ect ect.

Doing it this way makes the client happy because they have a number to bring to their accountants or whomever for an invoice, and they will also Save money if the project ends up not taking as long.

Along with that, I will echo that if you don't know enough about your language(s) of choice, or have enough confidence to be able to estimate exactly how long it will take for a project you probably shouldn't be starting in the freelance world yet.

This post has been edited by rgfirefly24: 22 May 2012 - 10:48 AM

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#9 jon.kiparsky  Icon User is online

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Re: Fixed vs hourly fee?

Posted 22 May 2012 - 11:12 AM

I agree with the per-project pricing. That gives the client less room to nickle-and-dime you. "How much per hour? Can we knock that down a little? And do you really need forty hours? Couldn't you do it in thirty?"

No, easier to just say, I can do it by this date, and here's what it costs. And just be sure to budget in an extra ten percent for nuisance client time.

View PosttlhIn`toq, on 23 April 2012 - 03:01 PM, said:

Hourly is exactly the opposite. It promotes sloth.


But I like sloth! Of the seven deadlies, it's one of my favorites. Along with lust, of course. And gluttony.
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#10 Sergio Tapia  Icon User is offline

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Re: Fixed vs hourly fee?

Posted 27 May 2012 - 09:44 AM

Quote

A good, experienced developer should be able to know a realistic time frame a project should be completed in.


Not always! :lol:

I still suck as estimating my time. :P And I have tons of software projects under my belt.
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#11 Shane Hudson  Icon User is offline

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Re: Fixed vs hourly fee?

Posted 29 May 2012 - 08:28 AM

I base it depending on the needs of the client. If they want modifications or me to do more of consulting than developing, then I charge per hour. If it is a larger project I will quote based on how long I would expect and charge as if it were per hour. I also base it on how hard it is, if it is something that I know I can do quicker than others, I will usually charge how much it is worth rather than how quickly I can do it.
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#12 Mike+9  Icon User is offline

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Re: Fixed vs hourly fee?

Posted 13 July 2012 - 02:33 AM

I think hourly rates are not that good, especially when you have some experience. It's because you can only be payed more if you work more. But you should be payed more if you work on more complicated stuff. If not then just think that you are stuck to your hourly rate and the only way you can earn more is by working more hours.

Also it promoted laziness like tlhIn`toq said which also is not good.
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#13 Onager1286  Icon User is offline

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Re: Fixed vs hourly fee?

Posted 10 August 2012 - 04:15 PM

My thoughts are that a combination of the two approaches work best. A fixed rate can be in place to start with, and depending upon the project, an hourly rate can be charged if the work becomes more than was initially understood.
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#14 AnalyticLunatic  Icon User is offline

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Re: Fixed vs hourly fee?

Posted 29 August 2012 - 10:52 AM

Typically (not always), I will charge hourly for light maintenance work/updates. If the project is something hefty like a full site redesign or first web-presence site, I break the project down into separate sections such as Graphic Design, Coding, Project Management, etc. I then calculate a different rate for each section, estimate the hours I expect to spend on each section, and then add it all together for the project price.

I have not yet *fingers crossed* had a client try to renegotiate or balk at my quotes. If anything, I should probably be charging more for some sections :lol:

Really, it's a matter of situation and finding what is right for you. There is no right/wrong/perfect answer to the age old hourly vs. project debate in Web Design. Trial and error is the best way to learn. ^^

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#15 Paul Miller  Icon User is offline

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Re: Fixed vs hourly fee?

Posted 20 September 2012 - 09:16 AM

In my opinion per-project pricing is the best system for freelancers. This is an appropriate way for employees and for employers.
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