Image Description

When to Charge Hourly

So you’ve just figured out your client-facing rate, congratulations! Now don’t get mad, but you might not actually use it all that often. I generally don't recommend charging hourly, but there are times when it is the best option. It will depend on what you do and how you work.

Here’s when hourly pricing makes sense:

  • When you're starting out your creative endeavor or freelance work, and you don't have a clear idea of how long something is going to take. Charging hourly, in that case, will protect you from under-charging because you will at least make your minimum hourly rate for the time that you are spending.
  • When you're starting a new type of project, and you don't really know how long something is going to take, hourly pricing makes sense there as well.
  • When you've taken on a project, and the client isn't totally sure what they want, you could charge hourly for that, or propose a flat fee for a certain defined scope and then hourly for anything beyond that.
  • When your projects vary widely in scope from client to client or even from one project to another with the same client.

These are all instances where there’s an element of uncertainty in the project, which you can typically tell from the beginning. The last instance is generally used only with recurring or ongoing clients, whom you realize are needy or indecisive or chronically late. You can charge a high maintenance client fee. Obviously don’t call it that. Just bake it into your pricing for them! If you’ve figured out that somebody is really bad at getting back to you with feedback, or they want to talk stuff out over the phone for hours every week, you have to charge for that.

When you have higher maintenance clients whose projects have a tendency to balloon in scope, timing, number of revisions, and amount of back and forth, that's a good time for you to charge hourly as well. And before you freak out about being mean, no one needs to know that they’ve got a needy client fee attached to them. In my experience, most clients do not care what you’re charging other people. Most don’t even bat an eye at raised rates if I present them confidently.

To make hourly projects work, make sure to set boundaries from the beginning. Set a minimum number of hours, because if you only charge for 30 minutes, the remainder of that hour is pretty hard to fill with paid work. If you sell four hours out of your six hour workday, you might not have a paying client you can slot into that remaining two hours. If you only have (or want to have) a certain amount of time available for this client, consider setting a maximum, and think about whether you want to let them roll over unused time. If you’ve set aside 10 hours a month for a client, and they want to bank 20 hours to use in one month, do you have the flexibility to do this?

You also want to establish boundaries and procedures for how the client can ask for more or less time. If you plan to spend 10 hours a month on this client, but they message you midway through saying, "Well, actually I only need four, so I’m going to pay you less," then you're stuck with time that you may or may not have client work for. Remember how long it takes to get a project in the first place. If someone wants to have access to your time, they need to pay for it. That’s also why I recommend invoicing the minimum hours before the project starts, because they are paying to reserve that time, and paying you to not go take another project.