Dec. 6, 2020

Pros and Cons of a Fixed-Price Project

Pros and Cons of a Fixed-Price Project

Often freelancers ask me how do you set your prices and is it best to charge per hour or per project? To be honest, this is a continuous game of pros and cons, and it depends on the project.

In freelancing, there are few types of fee structures you can choose from:

  • Hourly pay
  • Per project
  • Unit-based (pay per word)
  • Commission-based

In this episode, you will….

  • Learn what is a fixed price project
  • Know what are the advantaged and disadvantages of being paid per project
  • Have a clear idea of why should you charge per project
  • Understand why some clients prefer paying per project

Insights:

  •  ’’ The dangerous zone of pay per project is that your client might treat you as an employee, not a contractor and they will feel entitled to just throw work at you or micromanage you.’’
  •  ’’ As the price is fixed, your customer will know exactly that the price he sees is the price he pays. There will be no surprises at the end of the project. This brings peace of mind for your client and knowing that they will afford it.’’

Tips:

  • Always draft a short and clear contract before you start working on a project·Set expectations and prevent any misunderstandings.
  • Never start working on a project without having a deposit of at least 20%. You can also stretch it like 50% when you start and 50% at the project
  • Make sure your contract has a due date for a deposit and a due date for the final payment. Why this matter? You will provide a quote for a client and he just disappeared.  In 6-7 months, he is back saying he is ready to pay. But hold on, those were the rates at that time, in 6-7 months your rates might have gone higher.
  • Make sure you are mentioning the accepted payment methods: bank transfer, PayPal, Venmo, etc.
  • Leave room for negotiation with your client, however, keep in mind that you do not only have bills to pay, but you also need to make a living and plan financially for your future.


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Until next time,

Doina