As a solo web developer, I often charge my clients by hour even though I am aware that a fixed-price quote can provide me with more flexibility and money. That’s because a fixed-price quote also brings more risks such as endless revisions and unpredicted technical problems.
As a result, you may have to input much more time than estimated. And this is the main reason why I stick to charging by hour. However, despite those potential risks, what happened recently makes me consider to stop quoting an hourly rate.
The Trigger: My Client’s Question
I have worked with a client for months. Usually I get paid at the end of each month and our contract would be extended at the beginning of next month. A month ago, I was told the client planned to commission me to develop a few more projects. I was happy until he asked: Can we work through a third-party freelance platform like Upwork?
I was confused at first but later I understood the accounting process regarding my contract involved a lot of paperwork and took a long cycle to finish. If we were going to work together, it would be better to leave such stuff to a third-party platform.
But I am still surprised at two things. One is the fact that I never noticed my hourly quote created such problems. And the other is my client still sees my work as a commodity service he could buy in any freelance platform though I thought myself as a friend.
Problems of An Hourly Rate
Charging by hour somehow drags me in the pool full of other freelancers where my work is treated as a commodity service. My client cannot see the value I bring to the project and soon he will begin to compare my rate with other competitors. If their rates are lower than mine, I would be out of the game.
More importantly, an hourly rate does no good for clients. I learnt it from the free courses offered by DoubleYourFreelancing.
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If you charge by hour, you also need to provide an estimate of time for the project. And the client will have to make a decision upon an estimate instead of a fixed cost and take the risks of your being wrong.
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You can never truly partner with your client when you keep charging for every minute you spend together. Does you client ever try to cut down on the meeting in order to lower the cost? To him, you are just a ruthless mercenary and can be replaced anytime by a better offer.
Partner with Your Client with A Fixed-priced Quote
I am a fan of history, especially the history of Florence, Italy during the Renaissance. I get an impression that whenever the Medici needed armed forces to support, they either hired mercenaries or formed an alliance with neighbors such as Milan. In return, the former got gold while the latter won the friendship and trade from Florence.
I believe all of us want to be allies instead of mercenaries because being an ally, in the long term, is much more rewarding. And allies should undertake the risks together. Let’s be an ally to our clients and stop quoting an hourly rate.