A good client asked me to handle a sideline project on a quick turnaround. Since it was a little different from what I normally do for them, I quoted an hourly rate. They asked how long it would take. I told them 1 to 2 hours. They said okay.
But in the end, the work took nearly three hours. Should I charge them for the actual time, or just charge for the two hours I estimated? Is it better to take the hit just for goodwill? Or charge for the full hours? I’d like to get paid for my time, but don’t want to appear unprofessional.
Take the hit this time. Save face, save the client. It’s not a million dollars.
Then quit charging by the hour. (Except in a few unique situations. Which I’ll get to in a moment.)
I have whacked my thumb with this particular hammer way too many times. First time, ages ago in college. Most recently, last month. I embarrass myself sometimes.
I know, you want to charge ‘by the hour’ because it seems ‘safer’, and maybe ‘fairer’ or some such thing. You want to get paid for your time. You hate the uncertainty.
So you quote an hourly fee. And every single time, the client, who also hates uncertainty, asks “So how many hours will it take?”
The moment you put some estimate on it, you have magically turned it into a flat fee. No more hourly rate. No more ‘safer’. You have quoted a project fee. Which you didn’t want to do in the first place.
Based on your ‘estimate’, the client is expecting $150 to $200. They would cry ‘foul’ if you charged $397.
If you want to charge by the hour, you can’t give ‘estimates.’ You charge however it comes out.
Or, you say something like, “Somewhere between 12 and 97 hours.”
Or, you say “I have no idea.” Or, you say, “I’ll know better after getting into the work for a few hours. Then I’ll give you the bad news.”
But clients won’t go for that. They hate handing out blank checks.
I know. This debate over hourly vs. flat fee will go on forever. I won’t try to settle it here.
In general, clients hate hourly rates. They hate open-ended. Hourly rates also make it way too easy to make a dumb comparison between two freelancers. $125 vs. $75 per hour. No contest. That’s dead wrong, but we can’t fight that here.
Project fees are almost always better. No one gets rich on hourly rates.
Okay, here’s the ONLY situation where hourly makes sense:
When the CLIENT determines how, when, and how long you work, you go with an hourly rate.
When YOU determine how, when and how long you work, you go by project fee.
Right now (me, Mr. Project Fee) I’m working for an executive in a big insurance company. I’m working ‘on call’ for writing and communications assignments that crop up. A press release. An email to brokers. A presentation to a branch office. She’ll say, ‘Can you jump on this conference call?” “What do you think of this from XXX?” There are few discreet and contained ‘projects’. It’s mostly short-term, ad hoc writing.
But otherwise, hourly is riskier than it looks.