As a freelancer, your rate is paramount to your success. You can’t undervalue or overvalue yourself; you have to hit the right medium. Choosing the right type of freelance rate will make a gargantuan difference in your revenue.
Most freelance rates are either hourly or project-based. While both are situational, one can be significantly better than the other.
To help you choose which freelance rate is right for you, we’ve compiled a pros and cons list of both types. This isn’t definitive in any way, but it will help you gauge what sort of freelance rate you should be using.
– Flexibility: An hourly rate will allow you to work when you want and log your hours accordingly. You have no fixed time slot, so your day is flexible. As long as you’re recording when you work, you can simply compile that time together and apply your rate.
– Organization: By using a time-tracking tool like Toggl, you’ll be able to consistently check how much time you’ve worked. You can see when you work most often and keep track of every single minute spent working. In the long run, this can help you assess your productivity and enhance it.
– Unreliability: Some clients won’t like an hourly freelance rate. If you present them with a large bill, they could accuse you of charging for more time than you worked. Of course, showing them a document with your logged hours will usually solve this issue.
– Flexibility: A project-based freelance rate gives your day flexibility in a different way. You don’t have to keep track of your time at all or follow a schedule. All you need to do is finish the project by the deadline.
– Time maximization: This can be a pro or a con, depending on your work style. If you can crank out projects easily, then a project-based freelance rate is your best friend. Think of it this way: You can either charge $20 an hour or $200 for a project. If you can get everything done in an hour, then your rate is effectively $200 an hour. Of course, if you take more time, an hourly rate will be better.
– Lack of boundaries: An issue with a project-based freelance rate is scope creep. That’s when clients request changes or additions and the scope of the project keeps increasing. If you charge hourly, you simply add it to the bill. With a project fee, however, it becomes more complicated. When is the project completely over? You’ll need to define immovable boundaries if you choose a project rate.
Which Freelance Rate Is Right For You?
The right freelance rate depends on the kind of work you’re doing. If you have an ongoing work relationship with a client, then billing hourly may be best. If it’s a one-off gig, try a project rate. In the end, it’s all contextual.
No matter which type of freelance rate you set, make sure it’s clearly defined in a contract. This will give you something to fall back on if the client bails or turns sour.