Q&A: Do you charge by the hour or use a flat project fee?

One of the topics we discussed in this week’s episode was charging by the hour versus charging a flat fee for a website project. Mike and I revealed that we typically go with an hourly fee, while Brian charges clients a flat project fee.

So we want to know how YOU price and bill your projects. Hourly? Flat fee? Or something else like a percentage of profit? Let us know!

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  1. Q&A: Do you charge by the hour or use a flat project fee? http://t.co/hGYtCZ9

  2. It depends on the client/project. For on going work I charge by the hour. For one time projects I charge a flat rate. However, those end up becoming return clients in which case they’ll want me on some sort of hourly rate for maintenance work or small edits.

    • Brian

      I have the same approach. Smaller ongoing maintenance / tweaks are billed hourly. Larger projects, flat rate.

  3. We charge flat project fees.

    This way, we are able to put everything on the table, and the client knows exactly what they are getting into. With new clients, there has not yet been formed an established trust. We have found that potential clients are more comfortable knowing exactly what it is going to cost them, and there will be no seemlingy “hidden” expenses down the road.

    The only slight variation to this approach is our maintenance projects. We typically will perform website maintenance for existing clients which we estimate using an hourly rate. The quoted price is still flat, but it is reached by an estimate of hours.

    • Brian

      I find it hard to give flat fee quotes for very small, maintenance-type projects. It just rubs me the wrong way for some reason… like the number is arbitrary or something. That’s why smaller maintenance jobs are billed hourly.

      Flat fee quotes for larger projects seem more acceptable because you’re proposing to deliver significant items for a (hopefully) reasonable price.

    • With the maintenance, are you saying it is a specific price (per month?) and that covers up to x-amount of hours? For example, $200/month which covers up to 3 hours of maintenance. Just curious as I’ve debated going with a retainer-like approach to maintenance.

      Thanks for the comment!

      • No, for small ongoing maintenance tasks, I would just track hours, then bill monthly (using my hourly rate) for the work done in the previous month. Larger tasks sometimes are treated as new projects, which I quote a flat fee for.

        A while back, I experimented with offering a pre-paid maintenance plan to my existing clients. I offered 3 pricing options, with the larger options offering more value for the money (you get a free hour or 2 of work). Forgot the exact numbers. But nobody went for it. Clients still preferred to pay for the hours after the fact.

  4. Brian

    A few thoughts I meant to add during the show, but didn’t get to them:

    – Don’t forget that as you get better/more experienced at what you do, you work faster, more efficiently. You shouldn’t be charging less for delivering faster. If anything, you should charge more for this.

    – Remember you’re not only billing for the actual hour you’re working on a task, but also the years of education and experience that make you an expert at what you do. This can justify both your hourly rate or your flat fee quote.

    – Don’t forget about the VALUE you’re delivering to the client. I.E. what this website will mean to them, to their business. It’s less about what the time means to you, more about what the final product means to the client. That’s what you’re charging for.

    I wrote an article a while back about pricing based on value:
    http://freelanceswitch.com/the-business-of-freelancing/why-i-believe-in-pricing-work-based-on-value/

  5. I’m super late to this conversation but i have had some success with a prepaid monthly maintenance program, just a basic like $35 a month for basic text/photo updates and i usually kick a month free for paying annually. I have a few clients on a program like that and it seems to work out pretty well cause most updates are only 1-2 hours a month and some months they don’t have any at all so it balances out pretty well. Doesn’t really work when they have more complicated maintenance needs though, those are better done hourly. Anyway just my 2 cents.

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