Hourly Rate or for the job?

13 years ago

I would quote a price for the project. Base that price on what you think it will take and an hourly rate but don't charge them hourly. Hide the hours.

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Aaron Doud - Sales & Success

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GforceSage 13 years ago

Originally Posted by Aaron Doud

I would quote a price for the project. Base that price on what you think it will take and an hourly rate but don't charge them hourly. Hide the hours.

Designers want to charge by the hour so they can adjust the price as they see fit.
I never hire anyone by the hour. This leaves too much room for unexpected price hikes. I always state to anyone I hire that you should have a good idea what it's gonna take to get the job done, so let's discuss the cost of the project. Now if I am just getting something small done, a quote of an hourly rate for an hour or two is fine. Giving a quote for the entire project is preferred.

Do what you feel most comfortable doing, but try to be flexible if you have a client who pays by the project and not the hour. Don't sell yourself short in case something takes longer than you expected.

Good Luck,
GfS
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Joel Young 13 years ago

My sense of fair play has me doing the hourly rate. Why? Because let's say a project will take you 10 hours to complete, and the flat rate is $2,000 (totally made-up figures here). That may or may not work for the prospective client. However, if you're charging an hourly rate of $75 (for example), then the client only has to pay $750.

For me personally, to charge a client more than what a project is actually worth, isn't fair. Hourly rates keep it fair for everyone, and actually helps to retain clients as they realize that you are more cost effective than other companies.

And yes, I have had clients who prefer a flat rate. For them, I make the best estimate of what it will take to complete the project, and simply calculate it according to my hourly rate; plus, I tack on an extra percentage to cover any contingencies that will come up (every client always wants changes made).

Of course, a contract specifies the limitations of how many changes and other crap I have to endure, lol.
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owais211

Banned 13 years ago

I'd prefer to get the job hourly. The client might request more work and it is quite hard some times to estimate the job.

The client might request 15 minutes per day work some day he might want you to work 45 minutes. So hourly is great when you say " xyz & etc " because there is lot's of stuff involved there.

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Jason Kanigan

13 years ago

I usually do flat rates...when the scope of the project is known and agreed upon.

For more "slushy" or ongoing things, it's the hourly rate.

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Joe Stewart

13 years ago

Originally Posted by Jason Kanigan

I usually do flat rates...when the scope of the project is known and agreed upon.

This.

I don't do web design, but for any project I outsource I prefer to pay flat rate and have "clearly defined terms" in writing. Example, "for this price I'll include this, this and this".

If you offer a redo or some type of editing I'd also include exactly how many times I'd do that. Some people will jerk you around over and over again and may not release funds.

Also, if the project is very big and you don't know the person very well (or at all), I'd seriously consider using Escrow.com. If you accept Paypal, personal check, credit card, etc they could come back on you if they decide they're not happy when it's finished.

My two bits.

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JustinDT

Banned 13 years ago

Originally Posted by Joe Stewart

This.

I don't do web design, but for any project I outsource I prefer to pay flat rate and have "clearly defined terms" in writing. Example, "for this price I'll include this, this and this".

If you offer a redo or some type of editing I'd also include exactly how many times I'd do that. Some people will jerk you around over and over again and may not release funds.

Also, if the project is very big and you don't know the person very well (or at all), I'd seriously consider using Escrow.com. If you accept Paypal, personal check, credit card, etc they could come back on you if they decide they're not happy when it's finished.

My two bits.

I say hourly. In my agreements I always have service hours on a monthly charge.
For example, If they have seo monthly I have 4 hrs they can utilize for any updates they need, then afterwards they get charged hourly

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CreekChub

13 years ago

To each his own, but I never, EVER charge hourly - and here's why:

All this talk about "gouging" is completely lost on me. You're worth what you're worth in any given market. If I'm very good at what I do (be it web design, or any other service we might offer), then I deserve to be paid a premium. If it takes me (or my team, or outsourcer, or the 10 year old down the block) 4 hours and you 8 to get the same job done, why should I ask for less money?

On the flip side - if I suck at what I do, aren't that quick because I have dyslexia (or just generally get side-tracked licking windows) - why should I be "allowed" to charge more on an hourly basis?

No. We're all big boys and girls, and a "project" is a "project". Assuming a certain understanding of the requirements and expectations of quality, it's worth "$X". Short of meeting a deadline, if I'm on the other end of the equation I could give a rip whether or not you had to work 18 hours a day for 3 weeks straight (or 9 hours a day for two days) to make it happen.

It's bidness, folks, and that's what we're supposed to be doing.

Now, if you're talking about little things for existing clients - hey, can you update this? Hey, can you change this? It entirely depends on the client. Most of the time, the relationship is such that I'm going to offer it as a value added service. If it becomes a problem, we'll have a discussion. If it continues to be a problem, then they're looking for a new provider. I'm not in business to be billing people for $52.75/hr X 1.75 hours.

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plainwords

13 years ago

I do a combination of hourly and flat rate.

e.g.

website mockup - 6 hours @ $90/hr = $540
coding design to wordpress - 20 hours @ $90/hr = $1800
adding content and images - 4 hours @ $90/hr = $360

TOTAL: $2700

So the client gets a fixed price, but they also have some idea of how that price was arrived at.

I've found this approach works best for me.

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Jason Kanigan

13 years ago

Originally Posted by plainwords

I do a combination of hourly and flat rate.

e.g.

website mockup - 6 hours @ $90/hr = $540
coding design to wordpress - 20 hours @ $90/hr = $1800
adding content and images - 4 hours @ $90/hr = $360

TOTAL: $2700

So the client gets a fixed price, but they also have some idea of how that price was arrived at.

I've found this approach works best for me.

Here you risk the prospect lining up your hourly rate against other providers'. If they don't know you, it all comes down to price. So this can be a bad idea.

Obviously it's working for you, though.

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plainwords

13 years ago

Originally Posted by Jason Kanigan

Here you risk the prospect lining up your hourly rate against other providers'. If they don't know you, it all comes down to price. So this can be a bad idea.

Obviously it's working for you, though.

It's not really a risk because I don't want clients who are shopping on price. My hourly rate is stated transparently at $90, and it positions me at a certain place in the market, so I will only need to work with clients who are happy to pay that rate.

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avandrunen

13 years ago

Thanks folks,

This has given me some great food for thought on this.

I think Jason's comment on "slushy" probably hits is closest...will most likely do hourly on this one.

Any thoughts on what the going rate is...don't want to undervalue myself...don't want to gouge.

For projects with a bit more of a defined scope...per job will most likely be the way to go.

Thanks all

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Jason Kanigan 13 years ago

Originally Posted by avandrunen

Any thoughts on what the going rate is...don't want to undervalue myself...don't want to gouge.

If you are competent, $50 - $75 or even more per hour is reasonable.

Broken shopping cart = no sales.
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bizgrower

13 years ago

I think project price for the requested work and hourly if it becomes slushy.

Site updating could become another revenue stream for you with existing clients.

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DaniMc

13 years ago

Get a detailed list of exactly what needs to be done - and give an flat rate quote.

THEN - any extra work after those specifications is hourly.

"These 5 things = $3200 - Additional work outside of this scope will be billed at $125 per hour"

This will guarantee you the $3200, and also discourage the client from making too many changes to the project.

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cshilling22

13 years ago

I would do a flat rate that specifically outlines what the project entails and what you will be doing.

Hourly brings in too many unnecessary complications. What happens when the client is still unsatisfied with the work you have done but does not want to pay for any more hours? Do you then just work for free? How will you document your actual time worked? What if the client questions this? How do you decide on a fair hourly price that compensates for the value of your time but does not seem too high for the client?

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Joel Young

13 years ago

Originally Posted by cshilling22

Hourly brings in too many unnecessary complications. What happens when the client is still unsatisfied with the work you have done but does not want to pay for any more hours?

With a well written contract, that wouldn't be a problem.
And any designer who won't work with or doesn't believe in contracts, needs to find a different line of work.

Originally Posted by cshilling22

How will you document your actual time worked? What if the client questions this?

I've used a work timer since I started in 1999, and no clients have ever accused me of cheating them. I explain to them exactly how I count my time, and no one has ever had a problem with that. The FAQ on my website also helps alleviate any fears of being cheated.

Originally Posted by cshilling22

How do you decide on a fair hourly price that compensates for the value of your time but does not seem too high for the client?

Conversely, how do you decide on a fair project price that compensates for the value of your time but does not seem too high for the client?

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cshilling22

13 years ago

Originally Posted by Joel Young

With a well written contract, that wouldn't be a problem.
And any designer who won't work with or doesn't believe in contracts, needs to find a different line of work.

I've used a work timer since I started in 1999, and no clients have ever accused me of cheating them. I explain to them exactly how I count my time, and no one has ever had a problem with that. The FAQ on my website also helps alleviate any fears of being cheated.

Conversely, how do you decide on a fair project price that compensates for the value of your time but does not seem too high for the client?

I see that hourly works well for you and that is great. If it works for you, you are making money, your clients are happy, and you are happy that is all that matters.

I agree that contracts are essential. What does your contract state to avoid the issue of the hours becoming more then what the client anticipated, but due to you not realizing that client would be unsatisfied or want continued changes?

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Joel Young

13 years ago

Originally Posted by cshilling22

What does your contract state to avoid the issue of the hours becoming more then what the client anticipated, but due to you not realizing that client would be unsatisfied or want continued changes?

All expectations are set during negotiations. The client and I discuss what will happen in the case of extra work or unsatisfactory work. Whatever we mutually agree to is what gets put in the contract. Every client is unique.

Originally Posted by pingsters

I would go for a fixed quotation, reason being some clients may not be comfortable with hourly rate since they will always suspect that they may be cheated.
You may calculate your hours but keep it to yourself and quote a value which is measurable to the time you think the job will take.
Best of luck!

I've thought about doing that, but I always get stuck on the point that I never really know how long it will take, because every project is different. Most of the time I can make a good guess, but there's always that one wrench in the works that changes the game.

I do like the idea someone posted earlier about quoting a flat rate, but stipulating an hourly rate for all work above and beyond the original scope.

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rodsav

13 years ago

I would calculate how long it will take me to do the project, and possibly add a little cushion in case it takes longer. Decide what hourly rate you want to charge for your services. Then give the customer a price/quote for the job. If you feel he may want to negotiate on price, then you may want to give a higher price and go down to what you really want, and he thinks he is getting a good deal.

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abelamorales

13 years ago

People tend to cross their arms if they see you are charging $75 - $150 an hour. I would quote on the project.

((Estimated amount of hours + Admin Time + Cushion) X Price Per Hour) + Any Expenses = Quote

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Aaron Doud

13 years ago

Originally Posted by abelamorales

People tend to cross their arms if they see you are charging $75 - $150 an hour. I would quote on the project.

((Estimated amount of hours + Admin Time + Cushion) X Price Per Hour) + Any Expenses = Quote

The company that hosts our dealership's website charges us $115 per hour for little items.

Our RV Service center using flat rate but that flat rate is based on $120 an hour. Though it often takes the techs more hours then given in flat rate.

Remember real companies have multiple employees and costs so the rate has to reflect that. Companies that are used to paying for marketing and professional services will not bat an eye at such hourly rates.

But it is still better to quote by the job based on that rate. People feel more comfortable that way. Even with the web host they always tell us how long it will take and quote the price. If it takes them more or less time doesn't matter. We pay by the job even when we know the hourly rate.

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Hourly Rate or for the job?

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