Hourly or project-based pricing when working as a freelancer?
I'll share my experience. I'll say right away that I'm a pure UX designer. That is, I don't play with fonts, I don't pick colors, I don't draw pictures. I make interactive prototypes in Axure (yes, even in 2024) and write functional specifications.
When I went freelance in 2008, I set the price of my hour for clients. 1,000 rubles. This was more than the market average, but in general, they did not refuse to work with me, because I was a good specialist and word of mouth worked very well. My portfolio already had about a hundred prototypes, inherited from my work at the agency and before that. Studios were especially interested in my services. With hourly payment, everything was transparent and beautiful.
The problem surfaced after a dozen projects. Let's take, for example, a prototype of an online store or a thematic social network, which then appeared like mushrooms after the rain (and then disappeared just as quickly). When you've already made several of them, each subsequent project does not take much time. That's one. It does not contain most of the rakes, because they were collected in the past. That's two. And it turned out that I made the prototype of the online store in ten to fifteen hours.
This included negotiations and a couple of iterations with comments. Total: 10-15k for work that could easily be sold turnkey for 50-70k. Increasing the cost of an hour to 4-5 thousand rubles led to the fact that they refused to work with you, because the price exceeded the average market price several times.
Conclusions by the hour:
— It is profitable to “learn” from clients for an hourly rate. While there is little experience, there will be serious mistakes in the volume and timing of work. With a low hourly rate, this will not hit the client in the pocket and will allow the contractor not to work overtime for free;
— In practice, when doing a job in 10-15 hours, many calmly say 20-30 hours simply because the work really looks like it costs 40-50 thousand. And here it reaches the point of absurdity. I had cases when I, acting as a client, paid the designer by the hour as if he worked 15 hours a day for three days. It was clear that the work took much less. This is not how it should be done. But pretending that you worked seven hours a day, while in fact working four… well, that is also not good. But I did this in my youth;
— When you name your price per hour, it will always be compared to the average market price. And even if you are very good at what you do, no one will work with you without recommendations if the price looks inadequate against the market;
— One of the downsides is post-payment. The money comes after the report on the work done, and not the other way around. Although for some this is a plus. After all, many, having received an advance payment, lose motivation to work. I have a separate article for such people.
Now about the project-by-project assessment. I switched to it as soon as I realized that it was not worth asking for less than 3k per hour with my experience and work speed. And at that time, this was already quite a lot for an interface designer. Now the interesting part. For typical projects, the market also has its own average cost. Freelancers have one, studios have another, much higher. If the designer does not have enough experience and patterns, he will name the average cost on the market, take on this work and, collecting bumps and delaying the process due to the flow of comments, bring the cost of his hour closer to that very thousand rubles. And if this is already the tenth similar project, then, on the contrary, he will do a 50-thousand project much faster than in 10 hours, using developments and anticipating comments and questions, thus bringing the cost of his hour closer to the 5+ thousand rubles mark. And so, considering myself to be among the second, more experienced, I could even allow myself to dump a little, naming 40 instead of 50 and at the same time earning several times more per hour than those who say 50-60.
Conclusions on the project-by-project assessment:
— A certain amount of experience is needed to avoid mistakes in the scope of work and potential iterations with comments (experience means a similar project made and released in the past). In case of a mistake, each additional hour spent will reduce the cost of all previous ones;
— You need access to the client. When working as a subcontractor and communicating only with the project manager, you will not get answers to some questions that affect pricing. There are rare exceptions. As examples, I can cite Anna Tretyakova from Elegion or Elena Bozhek from the Moscow company IPartner. But I repeat: it is ideal when you have found your own client and work with them directly;
— On the plus side: prepayment. You get part of the money before the work starts. When working by the hour, you usually get paid on the fact;
— Working on recommendations, you can quote prices for work higher than the market average, which increases the cost of your hour even more. It is usually psychologically easier for clients to agree to a project for 80k instead of 50k than for three thousand an hour instead of two thousand.
Useful links:
Chapters from my book of a normal freelancer. If you are a freelancer and haven't read it yet, I recommend it. I haven't received a single negative or even neutral review yet. It's free and from the heart.
What kind of prepayment should I take?
The value of the service in the eyes of the client
Well, that's mine too. Telegram channelIt's about freelancing and interface design.
