Should You Take Hourly or Fixed Price Jobs When Freelancing

Welcome back to freelancing month here on Amanda Cross Blog. I am so excited to offer another piece of the puzzle today. Check out this month's road map:

  1. 10 Lessons I Have Learned Freelancing On Upwork
  2. Should You Take Hourly or Fixed Price Jobs When Freelancing (this post)
  3. How To Advertise Your Freelance Career
  4. 10+ Freelancers Share Their Best Secrets To Getting The Job

Yep, you heard that right, today we are chatting about the hotly debated topic: hourly versus fixed price work.

A lot of people tend to have very strong feelings about which pricing structure is appropriate.

I tend to lean on the fixed price side myself, but I do understand the purpose and importance of hourly work.

Today I hope to shed a lot of light on the hourly versus fixed priced debate for y'all. 

Should You Take Hourly Or Fixed Price Jobs When Freelancing | Click through for my best tips on which freelancing price structure may work best for you. Here are my two cents on the hourly versus fixed price job debate.

Hourly Work 101

One of the most common ways that people get paid for freelance work is the hourly structure. This works similar to any kind of job that you would have. For every hour you spend working, you charge the client an hourly fee. This fee can be anything you set and really just depends on your experience, what you need to survive, and how much you feel comfortable charging.

Hourly work, in my opinion, is great for new freelancers who aren't quite comfortable figuring out a project based fee yet. Maybe you aren't sure how long it will take you to complete a 1000 word article, so you would choose hourly work so that you know you are compensated fairly for each hour of work you put into the project.

The downside? Hourly work can't take into consideration other factors such as how much the client will potentially make from your work (and if that means anything to you) as well as how much work you put in (if you are a fast and great freelancer.) For example, the more you write, the faster you get at it. So, if you are charging your hourly rate to write a piece of content, it may take you only a couple of hours, but it's great content! Hourly pricing doesn't take that into consideration.

I think that you have to be careful when picking which projects you want to be hourly because of that.

Long term projects are awesome when charged hourly, though, because it allows you to more accurately judge the expenses that you will endure. For example, if you think a project will take 60 hours, but it actually takes 120 hours, with a fixed price job you will be paid the exact same rate. As you get more experienced you will be more accurate with your predictions of how long projects will take, but at the beginning it's good to be hourly until you know how long projects will take you.

Hourly projects do have another downside, and that is the "all up in your business" factor.

At least for me, this is an issue, because I work in a lot of random ways. Sometimes I am very focused, while other times I am not so. I like to take random breaks to watch YouTube videos so that I can calm my nerves, and just in general I can't sit and work for hours on end normally.

My type of work is too sporadic and maybe not the best for hourly work because you have to showcase what you are doing with the project every hour, and with some hourly billing programs, every 10 minutes. Last week when I talked about Upwork, I told y'all that I didn't like their hourly system because it takes screenshots of your work every 10 minutes and it is quite distracting. Many freelancing hourly systems work in a similar way with random screenshots and check-ins in tow.

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Fixed Price Work 101

With fixed price work, you work with the client to set up a fixed price for the project. You will get that amount whether it takes you 30 minutes or 40 hours. This works well for people, especially if you work quickly.

For example, if you are charged with the task of redoing an About Me page, for some that may take hours, but for a seasoned About Me page writer, that may not take the same amount of time. If you are great and quick at what you do, an hourly structure wouldn't work well for you because most companies won't pay $300 an hour, even if you promise that it will only take one hour. On the other hand, many companies and entrepreneurs may pay a $300 flat fee for an excellent About Me page (or more!)

As I talked about in the previous section about hourly work, fixed price work also works well if you need frequent breaks and you don't work through entire hours. I am not one to work consistently through an hour because I get too distracted to do so. If I work an hourly job, I have to continually turn my tracking software on and off just to take a quick break or I have to add up how much I actually spent working versus taking a break. With a fixed price structure, I am free to work in the way that is most convenient for me, and I can take breaks when I want to.

Fixed price work can also be excellent for simple one-off jobs. Many of the articles that I write for companies I do so in a fixed price manner. It's much easier than starting up an hourly tracking software for just one article.

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Which One Is For You?

I think that you can float easily between hourly and fixed price work. Some jobs will be better suited for an hourly structure, while some jobs will be better as a fixed price job.

I think that you need to work with your client to discuss their expectations for the job and then create a pricing structure that works best for both of you.

Some people will adore the fixed picture structure while some people will lean on the hourly one. No structure is better than the other as long as you feel fairly compensated for the work that you do.

Extra Resources

Here are some other blogs and their take on the hourly versus fixed priced debate:

The Great Pricing Debate: Hourly Rates vs. Project Pricing from Bidsketch

Understanding The Difference Between Fixed And Hourly Jobs On Upwork from Hustle & Groove

Hourly vs. Fixed-Price vs. Value Billing: Which is Best? from Lean Labs

Pricing: Hourly Rates vs. Fixed Prices from Sidecar

The Hourly Rate vs. Fixed Bid Debate from Fundera

Conclusion

How you price your freelance jobs can have a big effect on satisfaction from that job. It is important to consider how you will price as you work with a client. Be sure to get the full scope of the project so that you can give the most accurate price. Many clients want the most work for the least amount of money, so you have to be sure that you can get to a price that accurately covers your expenses and hard work on the project.