Freelance Rates – Part 2: Hourly vs Project | Lillie Ammann, Writer and Editor

Series: Freelance Rates
Part 1
Part 2
Part 3

Some freelancers prefer to charge by the hour; others offer flat rates for specific projects.

There are advantages and disadvantages to both, and some jobs are better suited to one than the other—the scope of some projects can’t be easily defined, making a project fee difficult to determine. Your market may dictate how you charge. Many business clients prefer a project fee because they want to know exactly how much to budget.

Reasons to charge a flat fee:

Both you and the client know exactly how much the project will cost.
Many clients prefer a flat fee because they need to budget for a total amount or they fear being overcharged by a freelancer who drags out the project to generate more billable hours.
You can earn a higher hourly rate if you are efficient and get the job done quickly.
You don’t want clients to look at you as an employee who trades time for pay; you are running a business that charges fees for services.

Reasons to avoid charging a flat fee:

If you under-estimate the scope of the job, you can spend a lot more time than you are being paid for.
Some clients prefer an hourly rate because they have no idea if your project rate is reasonable.
The work is so unstructured or indefinite that you can’t determine a fair price.
The client takes an inordinate amount of your time in phone calls or e-mails, or the client expects more than you anticipated.

Reasons for charging an hourly rate:

You will be paid for all the time you put into the project.
The project is difficult to price at a flat rate because the amount of work can’t easily be determined in advance.
Professionals, such as lawyers and accountants, charge by the hour.
Some clients may prefer an hourly rate to help them decide if the price is reasonable when they have no understanding of what is involved in what you do.

Reasons for not charging an hourly rate:

You must track your time and keep accurate records.
Clients may not accept an hourly rate because they have no idea how much the total will be or they fear that freelancers will waste time in order to increase the cost.
Your income is limited to the amount of billable hours you can work rather than the number of projects you can do.
You will make less money if you become more efficient and can do the project in less time.

How I Charge:

For most of my regular clients, I charge an hourly rate because I work with them on an ongoing basis rather than completing finite projects. I keep a running tally in 15-minute increments and bill monthly for the accumulated time. There’s never a discussion of cost (except when I raise my prices)—the clients know they will be billed at my hourly rate for anything I do, whether they ask me to do it or I initiate it myself.

For example, if I learn of a new book promotion Web site, I e-mail by author clients and ask if they would like to be listed. Most of them will tell me to do what I think is best. I register with the site for them, submit their bios, book covers, blurbs, and anything else required, and let them know when they’re listed.

When I’m working with a self-publishing author, I may do any or all of the following: edit the book, lay out the interior, contract with a cover designer, create the back cover blurb, negotiate and contract with the printer, send advance reading copies to reviewers, get the ISBN and bar code, create a Web site with a shopping cart, write and submit a news release, register the copyright … And clients may publish more than one book, so I’m updating their Web site/blog during the same time I’m editing a new book and looking for promotional opportunities for the last book. Rather than setting a price for each step of the process, I simply keep track of the time and bill them at the end of the month.

On the other hand, if a new client just wants a resumé or a news release, I will quote a flat rate. I can turn a project like this around quickly and charge more than I would earn at an hourly rate.

For new editing clients, I do a free sample edit so the client can see if they like what I do and so I can get a feel for how much work is involved. Many of my clients are great storytellers but not-so-great writers, so it’s difficult to determine a flat rate for editing a book. However, I will give them an estimate based on the sample, with the proviso that if the rest of the book requires more work—because they sent me a sample that had been self-edited more thoroughly than the complete manuscript or because there is a major plot or other problem that shows up later, I will re-negotiate the total cost. The author knows what to expect for the total cost, but I am covered in case of unpleasant surprises.

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