Get your bespoke, hand-crafted hourly rate from a team of humans
saymyrate.comHourly rates are the least desirable way for freelancers to get paid. I understand that’s the norm but it’s not a good model because it emphasizes the wrong thing (time spent) and introduces the wrong incentives.
If you sell your time you should set up retainer agreements. That’s similar to what f/t employees do.
Better, charge based on business value. With my customers I ask them to list their pain points and issues and then assign priorities and value to those. We both know what the work is worth. Getting it done faster than expected usually means the work is more valuable.
We all use this model every day. When I eat a restaurant I pay for the meal, not the time. When I pay someone to mow my lawn I expect a flat price based on the work, not to pay by the hour.
If you and your customer working together can’t define the tasks, put them in order, and assign values to them then you’re not doing the necessary requirements gathering and analysis. That’s how so many freelancer engagements end up in failure, disappointment, anger, and legal mediation.
Re: hourly rates, I something think about what people say about democracy: "it's the worst form of government, except for all the rest."
Tbh I'm torn here, since hourly rates are really good for preventing scope creep. Where as per-project flat rates aren't great because they practically invite in scope creep.
I do think that retainer models for independents may very well be the future and are a nice happy medium.
That said, your point about "if you and your customer working together can’t define the tasks, put them in order, and assign values to them then you’re not doing the necessary requirements gathering and analysis" is tough because often times your customer doesn't want to pay for that. Curious, how do you get around that?
I understand that hourly is sometimes the only way to charge. Customers who have open-ended sporadic tasks, for example. I have a couple of those myself.
Hourly billing doesn’t prevent scope creep in my experience. Hourly billing often comes with an estimate, and the two sides may understand that estimate in different ways. Hourly no fixed fee can go wrong because of scope creep from the customer or poor estimating and wrong turns by the developer, or both. The scale of the problem becomes evident at the end of the schedule because it accumulates little by little. Then both parties blame each other.
I don’t take on projects if the customer can’t or won’t do the necessary requirements gathering and planning in advance and pay for my time. A customer who won’t do that is almost certainly going to have bigger problems down the road. I haven’t actually run into this problem a lot in 15+ years of freelancing, maybe once or twice.
Wanted to share a thing I built for the freelancers out there. I know there are a few "hourly rate calculators" out there for independent folks, but they're all pretty generic and not especially useful. Saymyrate is a bit different because it's powered by a team of humans with a big pile of data. And they reply back with an hourly rate that's tailored entirely to you. Free too, at least for now. Give it a look if you're curious what you maybe should be charging: https://www.saymyrate.com