A couple weeks back, I decided to kick off my pricing discussion by taking a look at the bigger picture and how to fairly set standards/goals for yourself when it comes to getting paid. But now, we’ve gotta dive in a little deeper. As a freelance creative, there are two well known ways of getting paid : by the hour or fixed fees. Like most things, both of these methods have pros and cons … which I’m here to tell you about. There’s a solid winner in my head, but we’ll get to that later. Let’s get the facts straight, first.
No matter which payment option you prefer, both ways require you to assess any project that comes your way and estimate how long you think it’ll take. Now that, my friends, is a loaded thing to do. I vividly remember estimating the hours of my first project as a freelance designer. I sat there with a blank sheet of paper, trying to write down how long I thought each part of the design process would take. I came up with a number, but was it right?? Nope. The point is, when you’re first starting out – it’s difficult to know your own process and how long each project will take. That takes time and you’ll get it down, just have patience.
In this situation, many young creatives will feel more comfortable offering their services at an hourly rate. This way, they don’t have to give a final price right away and can begin working instead. What many people forget is that money is money and nobody likes spending more than they thought they would. You may have given a rough estimate as to how long a project would take, but hours add up quickly. If you have a client who wants revision after revision, your time is only going to continue to grow. But do you think a client is willing to pay for all of that overtime? No way … even if the revisions and extra time were unforeseeable. Now don’t get me wrong, some people will understand and pay you appropriately, but that’s rare. Nine times out of ten, you’ll have an unhappy client on your hands, and nobody wants that.
A good way to steer clear from all of this money tension is to simply use fixed fees. When you are able to tell a client up front that their project wil cost X amount of dollars and include X amount of revisions, they know very well what is about to happen and how much they’re going to invest for it. If it’s a price that both you and you’re client are happy and settled with, it’s a win-win situation. Of course there is a lot that goes into determining a project’s price, but I’ll cover that next time, as it’s another topic in its own right!
Like I said earlier, there’s a front runner when it comes to the debate in fixed fees vs pricing hourly. I know people can and will argue each way, but for me, setting up a flat rate for a client always wins. Not only does it decide the cost from the get go and avoid money tension during a project, but it also works wonders for efficient creatives. Let’s face it, some creatives work quicker than others. Let’s say two designers with similar experience and talent work on the same project at $50 per hour. If person A completes a project in 10 hours and person B finishes in 20, you can see how billing at an hourly rate would punish the quicker of the two. Person A would make $500, while person B would make $1,000 … double. That can become a big difference, especially when these two people were assumed to be on the same talent scale.
With all of this said, take some time to think about your own process and decide which would work better for you and has the most pros rather than cons. Never punish yourself by making less than you deserve. I’ll be back in a few weeks to discuss how to determine your prices! Until then, feel free to comment with any questions you have or email me at email@example.com. I’m always happy to talk to others about what I’ve written about over here.