Skip the hourly rate – charge a flat weekly rate instead
If you've got a few years of experience and a few projects under your belt, skip the hourly rate or per-project pricing and start charging a flat weekly rate instead.
Here's why:
- No more proposals or complicated statements of work (SOW's).
- Clients will keep the project moving – the clock is ticking on their dime.
- Changes and revisions mid-project are easier (no scope or billing changes).
- Invoicing is much much simpler (no deposits, no mid-project payments, etc)
A few tips:
- Charge for the week upfront. Stripe invoices are an easy way to get paid.
- Over-communicate throughout the week (great freelancing advice in general).
- End every week with a clear deliverable + clarity on next steps.
Bonus:
If a potential client isn't sold on a weekly rate or isn't sure about the scope of their project (and how many weeks they might need you) start with a fixed price discovery project.
Essentially, write up a simple proposal with your recommendations and suggestions and deliver it as a nice PDF for ~$500. If they decide to move forward you'll have a nice plan in hand.
P.S. Want a tiny proposal + contract template you can use for weekly rates? Shoot me a DM 👉 twitter.com/twanlass
A short story
When I first started freelancing I would simply charge per project. I only had 1-2 years of self-taught experience and would charge 1-3K USD to build simple websites or CRUD web apps.
I was still learning, making a ton of mistakes, and I was super slow. Charging hourly didn't seem right. 😅
With a little more experience though I moved to hourly rates. Mostly because I was getting stuck in endless revisions with fixed-price project clients.
Note to my younger self: the cheaper the project the more revisions and feedback you can expect. 💀
I then made the jump to building more complex web apps and mobile prototypes. I went back to per project pricing. But this time I set the base project price at 10K+ USD (now with 3-5 years of experience).
Higher prices meant much better clients and way less revisions. Of course you can only command decent rates once you've successfully completed some projects, have some client testimonials, and have nailed your processes and workflows.
Over the last several years or so I've completely moved away from hourly or project based pricing. Instead, I simply charge a flat weekly rate, usually in the range of 3-5K USD per week (I now have 15+ years experience).
Indie hackers selling to indie hackers?
I've had clients offer this, but it seems so unappealing to me. A weekly rate may as well be a salary.
Whenever a client asks for this, I just tell them to hire an employee instead.
I hear ya 😄
I often set expectations up front w/ a potential client on length of engagement for this reason. I specifically let them know I'm not looking for a contract to hire role either.
With a weekly rate too, I love that at most, I'm only 5 days away from ending an engagement if the client or project is horrible 😆
Contract to hire always seems like a scam to me. Basically the client saying they want to be your exclusive client :red_flag:
I read the free book Breaking the Time Barrier a few years ago, and it certainly made per-project pricing sound more appealing.
I'm thinking of offering both per-project and time-based pricing, depending on the situation. Perhaps offer per-project pricing for the initial project, and then maintenance on a time-based retainer.
Being a freelance web desinger and developer for about 10 years in the past, I noticed that the best hourly rate is on fixed-price projects. My experience tells me that $200/h is too much, way more than $10000 for a project. And no one cares I'll need only 50 hours for finishing it. Another awesome thing I discovered too late - service productising, i.e. getting "subscribers" for your services (important: without fixing any hourly rates or time obligations). That's exactly what Brett Williams (@brettwill1025) does, read his interview here: https://www.indiehackers.com/post/i-make-50k-m-running-my-solo-unlimited-design-service-ama-133d3bba9d Not sure the same thing can be done with dev services though. Would love to discuss
@hack35 you could totally do productized dev services. Pick a platform / stack of choice and offer a subscription offering for small tasks:
You could definitely charge upfront on a monthly basis without promising to work a certain number of hours. I imagine that customers would still want a commitment that a certain amount of value would be delivered.
The "unlimited requests" style of services often offer a turn around time of X working days. After the deliverable has been approved by the customer, the timer starts for the next task.
Would your software development clients be happy with that kind of back and forth process? You could put together a quick landing page summarizing the service, and ask them directly.
Time based things are easier to sell because it's the default mindset, but the effort of learning how to position and sell fixed rate will pay off big time, I think. Has for me.
What kind of services do you freelance for? Just a general idea, programming? design? copy-writing? and so on...
Just programming in a niche programming language.
@janetacarr for your niche I imagine you could do pretty well w/ a productized offering too. I.e. offer a fixed price Clojure codebase review, setup teams w/ best practices, etc etc.
I don't know about that. The deliverable people look for is typically code, but who knows what the future holds. :P
There was an old indie hackers podcast episode where that advice was given. Every time he got a new project he would just up the price. He almost scored a deal for 50k a week I believe eventually.
Totally! Value based pricing gets a bad wrap sometimes, but keep in mind that every client and their budget are different. So if the impact of your work. Price accordingly 😁
Thanks for the advice.
Quick question: how do you find freelancing clients now & how did you used to find them when you were building simple websites or CRUD web apps? Would be interesting to see how that changed over time.
Early on I found projects anywhere I could. One of the first sites I built was for a teacher at the time. I found then (and still do!) it helps a ton to let everyone around you know that you're looking for projects or available for work. Essentially seed it and when a project comes up you'll be top of mind.
Later as I built and tried to scale an agency I found new clients a few different ways. We paid for leads, subscribed to freelance gig newsletters, used matching services Crew (now defunct) asked our existing clients for referrals, and even partnered with some bigger agencies to take on overflow work.
Today, as a solo freelancer, I largely rely on the network I've built over the years. Again, I make sure to let my friends and network know that I'm open for new projects.
I hope that helps!
Been doing this for a year and it's a game changer. Great advice.
Nice! Thanks for reading 🙌
I think charging for weeks is enticing. What I would be afraid is that customers might expect me to work and be available from 9 to 5. I feel that charging by hour gives me more flexibility.
How do you communicate your daily working hours to the client? How many work hours to you guarantee for the week?
This is a great way to sync up billing and deliverables with shorter sprints.
I run 1-2 week sprints to ship user value iteratively. I'm currently working on my own projects but I was billing a client this would be a great way to line up shorter features and billing.
100% agree with your "Over-communicate throughout the week (great freelancing advice in general)." advice.
Spot on @IndyDevDan! When I ran an agency we used to do exactly this – charge for a classic 1 week design sprint where we'd build and test a prototype.
We'd also work for a week to deliver designs for a new feature, pause for a week or two while it was built and shipped, and then resume for a week to iterate once data and feedback were flowing in.
Little tip. You can add a support package for the post project phase. Like X$/month to maintain existing project features (no new developments). Stop any time. 1 month included "free".
If they trust you this can easily becomes a retainer because there is no new decision.
Totally. I still have many clients on packages like this from ~2015. 🙌
I would assume it would be less headache when it comes to billing/contracts as well.
💯 . Contracts can be much smaller / simpler and payments are more like a recurring subscription than an invoice.
Great advice that makes sense!
In the bonus section, I will add "Create an automated funnel to acquire new leads"
Because you never know when the project will end OR if you could charge more
I encapsulate everything I know about this technique here
https://davidl.fr/blog/freelance-airtable-autopilot
—Like you for the younger version of yourself 😆
Agreed. The more your lead / new client pipeline is on autopilot the more billable time (or leisure time) you have. Don't forget to try and build a backlog of clients too. Many will wait for a later start date if you can guarantee it and hold their place.
What motivated you to move away from per-project pricing the second time around? Was it too many revision requests, or were the contracts and billing too much of a hassle?
A few things 😄:
Nice post Tyler, thanks for the advice. Quick question: say you charge a client a minimum monthly retainer and they pay you upfront, but throughout the month they send you much more work than you expected (and hence charged them for). How do you address this situation? Do you simply do the work? Do you let them know there will be an additional fee for completing X additional task?
I'm not a huge fan of retainers as they usually put control of the schedule in your clients' hands. For example, they can drop a bunch of work or requests on you at any moment.
That said, I've used them in the past and here's what I've done in your situation. I've given the client two options:
Option 2 can work if this is a temporary spike (and the following month will be slower). If increased demand continues, increase your retainer 😆.
One last note – I often sold hosting + maintenance packages at the end of projects. These were simple monthly retainers that included a few hours of updates, bug fixes, etc. They were auto-billed at the start of the month and did not roll over (much easier, nothing to keep track of, etc).
Have fun!
Hey there! Totally agree with not charging hourly. (IMO, it's just dumb... and annoying.)
Would you be willing to chat briefly with me to help out a fellow indie hacker? I'm working on Ditto - it's a payments platform purpose-built for project-based work (though it would work well for your case, too - just not hourly work). We've built a product that's basically integrated lightweight project management plus payments, with the money held in escrow to mitigate risk and ensure that payment is prompt. I'd really love to get your thoughts and feedback, if you can spare a few minutes?
@WorkWithDitto! Shoot me a DM on Twitter. Happy to chat :-)