Frequently Asked Questions
Who can use hourly rates for their clients?
Hourly Rates is one of the most common ways for service business such as freelancers (solopreneurs), virtual assistants, and even companies to charge for their services.
What’s the difference between an hourly rate and fixed rate?
An hourly rate is the price you charge a client for the duration of rendering your services. The longer it takes to complete a project, the more you charge because it takes up more of your time.
On the other hand, a fixed rate is a set price for the entirety of a project that you have with your client, irrespective of how long it takes for you to complete it. So unless you’re charging with a bit of padding on top, it’s possible that you’ll be undercharging.
What are the pros of charging clients with an hourly rate?
There are several pros to using an hourly rate with clients. Here’s just a few:
- You won’t get stuck doing a lot more work on a project than you initially bargained for without getting paid for it.
- They’re straightforward. For every hour you work, they pay you a certain amount of money.
- Hourly rates are common across different types of work and industries. Lawyers, consultants, designers, writers, and developers often charge at hourly rates.
What are the cons of charging clients with an hourly rate?
Like pros, hourly rates also come with cons. Here’s a couple to be cautious of:
- When your estimate for the time you’ll spend on a project doesn’t match with the actual number of hours you bill, your clients can feel frustrated and betrayed so be careful about your quotation and if you’re running out of time, speak with your client immediately.
- Some clients might consider lower hourly rates for lower quality instead of higher hourly rates for higher quality of work. It’s a frustrating cycle but remember, the right client will see the value of your work and will compensate you fairly for it!
- Charging by the hour can be a hassle. If you’re highly organized and really good at keeping track of your time, then charging on an hourly basis won’t break your sweat. But if you’re handling multiple clients with multiple tasks at different rates, then you need to double down on your tracking skills so you don’t end up undercharging!