One of the biggest breakthroughs I experienced early in my freelance career was the realization that I needed to charge per project, not by the hour. Simply put, charging by the hour hurts the most talented people because they happen to be good and work faster.
Besides, clients love a quicker turnaround and ultimately want a great end product. So, along with the fact that charging by the hour undervalues the expertise and efficiency of freelancers, here are some other reasons why moving away from hourly rates might be beneficial for you:
Charging based on the value of the service provided rather than time spent allows freelancers to capture the true worth of their expertise. Clients pay for the outcome and the value they receive, not for the time it takes to accomplish the task.
With experience, freelancers often become more efficient at what they do. Charging by the hour may penalize them for being efficient, as they can accomplish tasks more quickly due to their expertise.
Hourly rates don’t necessarily align the incentives of the freelancer with the client. Charging for value encourages freelancers to focus on delivering high-quality outcomes that satisfy the client’s needs.
Project-based pricing can potentially increase earnings. If a freelancer can deliver high value in a shorter amount of time, they might be able to take on more projects and increase their overall income.
However, it’s important to note that the transition from hourly rates to project (or value)-based pricing requires clear communication, accurately understanding the client’s needs, scoping projects effectively, and sometimes requires a track record of delivering value. It might not be suitable for all types of freelance work or in all client relationships, but it should be a model to consider in your future.