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Hourly Rate -vs- Flat Rate

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I have been resurrecting my freelance career and one of the biggest hurdles I stumble upon is a pricing structure that is attractive and more apt to close the sale. Today I stumbled across an article on Dzone and it got me to start thinking about my pricing strategy.

It is common for a freelancer, especially in web design/development to follow an hourly billing model. For example $25 - $50 an hour depending on the project size and what technologies are required, domain registration, hosting (if applicable) as well as a buffer for unexpected code disasters, missteps and client woes.

Letís take a look at an example that covers a typical scenario when dealing with a client:

You are approached by a client to create a basic website roughly about 5 pages. The goal is to give the client a web presence advertising their services, a simple contact form, an about us page etc., when quoting the client you inform them the site will cost $25 an hour and it will typically take 10-15 hours to complete. At best you just gave yourself a ceiling of $375. You could have billed the same site a flat rate of $500.00 which is not unreasonable for a simple business website, setup fees and troubleshooting and I usually throw in a few months of support to make sure everything transitions smoothly. It also sounds more appealing to the client to tell them you can build the website for $500 than to tell them you will do I for $25.00 an hour.

I had a client once whom I charged an hourly rate of $30.00 the total bill for the site came out to be $810.00 and the client refused to pay. After a few weeks of going back and forth I scrapped the project completely and decided never to do a project without a ceiling amount in writing and also to make sure I sign an agreement with the client before beginning work. I also like to try and get a percentage of the funds up front billed as setup fees.

Here is the article from DZone.

2 Comments On This Entry

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27 May 2010 - 09:28 AM
Heh, the URL got mangled.

At least here :-/


27 May 2010 - 03:07 PM
Edited for nykc
Page 1 of 1

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