Offer Hourly Rates or Fixed Prices? This Is How You Settle Accounts and My Experiences
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| Photo by Jon Cellier on Unsplash |
Hanifmr.com - I recently evaluated a survey that looked at how much self-employed people earn a month.
But how does this income come about? Do you have a fixed hourly rate or do you offer your customers fixed prices?
In the following, I describe my own experiences in this regard and evaluate a survey with more than 500 participants.
Fixed Prices or Hourly Rates?
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| Offer Hourly Rates or Fixed Prices? This Is How You Settle Accounts and My Experiences |
Many self-employed people face this question, at least when they offer a service. Whether you are a web designer, programmer, graphic artist, or gardener, should you rather set an hourly rate or offer the customer a fixed price?
Both options have advantages and disadvantages that I listed in an article a while ago.
Roughly speaking, the fixed price is more customer-friendly, while the hourly rate billing is more suitable for the self-employed. However, one cannot say that across the board.
My Experiences
For example, I have had very good experiences with fixed prices. When I was still working as a web designer, I gave all offers a fixed price. For this, it was of course necessary that I calculate well and consider all aspects of the planned website.
That usually worked out well. I only overlooked something once and that also caused trouble with the customer. It was about an online shop. While I correctly priced in the structure for creating the shop, I overlooked the maintenance of the products. The customer wanted to have thousands of products built in for a fixed price. We later agreed on that.
And even today I still rely on fixed prices. If I rent out advertising banners here on the blog and other websites, I charge a fixed price in advance. The alternative would not be an hourly wage, but here, too, the fixed price is the better option for me because it is simpler. I can also collect the fixed price beforehand.
More Than Just Money to Live on
When considering how to account for your work with the customer, the basic calculation should be taken into account.
First of all, you should make it clear how much money you need to start up and how much you will have to earn later in self-employment to be able to live well.
When determining the hourly rate, as well as calculating a fixed price, you not only have to include all costs but also include a buffer and of course a profit. Most founders underestimate the fact that they by no means get paid for their entire working hours and that there will simply be bad times too.
That is why the hourly rates of successful self-employed are so high.
That's How You Settle
But now we come to the evaluation of the survey, which was about the question of whether you bill according to the hourly rate or a fixed price. After all, 512 readers took part in the survey and cast their votes.
Here is the result:
Do you bill according to a fixed price or by hours?
- Sometimes like this, sometimes like that (40%, 203 votes)
- After hours (30%, 155 votes)
- A fixed price (30%, 154 votes)
Number of participants: 512 (1 vote)
40% of the survey participants do the math one way or the other. So you do not stick to the hourly rate or the fixed price, but instead, use one or the other depending on the situation. Whereby it has to be said that the fixed price usually results directly from the hourly rate. One way or another, this should be thoroughly defined beforehand.
30% of the participant's bill by the hour and are at least more flexible.
On the other hand, 30% also rely on the fixed price, which often makes it easier to win customers. Customers love fixed prices as this gives them a feeling of security.
Conclusion
Both variants are often used and since both have advantages and disadvantages, you should choose the path that better suits your situation. But you have to have tried both for that.
In general, as a founder, you should deal intensively with the topic of cost. Anyone who goes to the market here with prices that are too low or too high will sooner or later run into financial problems.
Finally, a new survey. Please also take part in large numbers.
How old were you when you started your own business?
- 18-29 (56%, 136 votes)
- 30-39 (23%, 56 votes)
- 40-49 (9%, 23 votes)
- Younger than 18 (6%, 15 votes)
- 50-59 (5%, 12 votes)
- 60 or older (0%, 1 votes)
Number of participants: 243 (1 votes)
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