Hourly or Project Fees? How to Choose.
Fees are a difficult subject for most freelancers. And one of the most difficult decisions you face is whether to charge hourly or per project. There are advocates on both sides.
In the hourly camp are those who claim that charging for the time you actually work is the only way to be sure you are fairly compensated. It’s also familiar to most freelancers who have worked this way in full-time employment situations. You quote your hourly rate, track your time, and multiply at the end of the project. Simple.
But hourly fees have a downside. Neither you nor your client know what a project will cost. This can lead to some nasty surprises and uncomfortable conversations when it’s time to invoice. Also, the better you are and the faster you work, the less you get paid, which is inherently unfair. The most important negative is that hourly fees mean you are selling your time instead of selling your expertise. This can prevent you from attaining the higher professional image you want. Read more
Money Links for Freelancers
Whether you’re starting out or are an old pro, money is always a major concern in the freelance business. Unfortunately, most freelancers are not entrepreneur types. They’re more like “propreneurs,” or professionals who happen to be in business.
So it usually takes a special effort to deal with the business side of freelancing. Here are a few quick links on basic money management.
- Free-Lancing’s Office Side — General tips on financial management for freelancers from The Wall Street Journal.
- How to save money—really — A simple plan for starting to save money from your freelance earnings. Be advised that you’ll need to save more than the example given to pay your taxes.
- Freelance tax FAQ — A nice little Q&A on taxes. Not anyone’s favorite subject, but something you have to deal with.
- Selling Yourself On The Value Of Your Time — Learning to think straight about how time is money when you’re working for yourself. This could make you skip that extra donut break.
- Taking Payment with PayPal, Escrow and other Online Options — Primer on getting paid online and some of the drawbacks and things to watch out for.
- Putting A Price On Your Capabilities — A business writer’s guide to setting fees. Most of the principles here can apply to designers or other freelancers.
- Getting Clients to Pay Up — How to handle those times when a client is slow or negligent in paying your invoices.
