Why is the default game-mode for freelancing always: charge by the hour?
Or is it just me that picks up on that?
It’s gotta be one of the worst things around for freelancers.
It messes with their money, their mind, and something else beginning with “M” that you can creatively insert here: _____
(Just doing my bit to make email a more interactive experience 😜)
So why is hourly billing it still a thing?
It’s kinda the default for job marketplaces like Upwork. And every contract job I see posted in places like LinkedIn always points out the hourly rate.
Now, I used to work on this basis waaay back in my contracting days as a software developer.
But I’ve never done hourly-rate jobs as a freelance writer.
What stopped me was reading Blair Enns’ “The Win Without Pitching Manifesto”.
Although I didn’t think I could pull off the value-based pricing approach that he was ultimately advocating…
I did go that one-step-better than hourly: project pricing.
And I’m glad I did.
You see…
Hourly might seem straightforwad and all. And clients seem to like it. Probably for that percieved simplicity too, I guess.
But it’s an illusion.
It’s actually not so simple.
Especially when it comes to:
Wondering what rate to charge in the first place. And so it doesn’t look over-the-top to your clients.
Clients wondering why something they thought shouldn’t take long, in fact took ages. It’s not because you didn’t know what you’re doing… it’s just something that takes ages. Then you’re left explaining why. And — as Ronald Reagan used to say — “If you’re explaining, you’re losing!”
You wondering how you’ll increase your rate after working with a client for a while. And sometimes those scary money conversations just never happen.
Your suspicious client wondering if you’re secretly inflating your hours… hoping they don’t notice. (This ISN’T all clients… but it does go through their heads sometimes. Heck, if I was a client… I’d probably be guilty!).
And if the work does take longer than expected… you can feel hard done by. Your internal hourly rate (what you need to break even) might not even be covered. It’s a downer… and can feel like it’s time wasted.
But there’s one thing FAR WORSE than all these problems.
Slithering along… and suddenly striking at the unaware freelancer:
The better you get at your craft… the WORSE you get paid.
Because if you’re more skilled, you’ll complete the work faster.
If you’re charging by the hour at present… just sit with that for a moment.
Don’t put off that inevitable pain until later.
When I talk to freelancers about pricing… I start sounding like a stuck record… because I always suggest running with project-based pricing.
If it’s a recurring retainer or subscription-type arrangement… just think of it as a recurring project.
Billing like this reorients things.
Beforehand, the amount your client sees on their invoice shows them the effort you put in.
Afterwards, it’s just about the outcome.
And these benefits come along for the ride too:
Expectations can be made very clear for you and your client around what is to be delivered and when (and I’m including dates and deliverables for any project milestones).
The price is the price. You quote a price. Your client accepts or not. (Now the whole topic of “Should you negotiate prices?” is a fun one for another day. Short answer: Never adjust your price down — just remove deliverables to find a new price that works for your client’s budget.)
You can better schedule your time because you have to think carefully about the scope of the whole project at the start. There’s no loosey-goosey “It’ll be about 20 hours and I should be able to fit that into next week” kind of thinking.
You can price according to your needs. Including your expertise. And when you deliver the outcome that your client’s looking for… then it’s win-win. It’s an even bigger win for you if you can do it quicker than you anticipated.
As you become more experienced… you won’t have clients look at you with WTF-eyes if you try and bill them a $250/hr rate (or more) for a commodity service.
If unexpected things come up, and it takes longer than you quoted, there’s no wondering: “Is my client going to be OK if my estimate is double what I told them?”. No… you wear the cost. And learn for next time.
Overall…
Project pricing is clearer and simpler for everyone.
But there can be something that stands in the way of making it work well.
And I won’t sugar-coat it… it’s a “head trash” thing.
If you work out your internal hourly rate (break-even rate, I call it)… calculate how long the work will take… add in some contingency… and profit… and it comes out to… let’s say $200/hr…
There might be a battle to win against the little demon sitting on your shoulder, whispering:
“$200 an hour? … You’re not worth $200 an hour.”
If that’s you… it could be a signal it’s time to work on some mindset stuff.
The thing is… the “being worth it” question is actually a red-herring.
It’s NOT about what YOU’RE worth.
It’s about an exchange between your client — who needs a problem solved — and you — who have the skills (or the means to get them!) to solve that problem for them.
It’s a value exchange. It’s helping one another. It’s… business. And… it’s a beautiful thing.
Ready to build your email list? Go here…
EmailForTheWin.com
Chris Milham