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Fixed Price vs. Time and Material: How to Charge Clients?
Like most freelancers and small business owners, you’ve probably agonized over a simple question: “How much do I charge for my services?”
On the surface, it seems like a simple question. You know there’s going to be some variation between you and other freelancers due to your location, experience level, and skills, but you may never feel like you come up with a good number. When a client declines to work with you, you always wonder if it was because of your price. Were you too expensive for their budget? Or were you so cheap that they worried about quality?
Plus, it’s in the interest of both parties to come up with an accurate figure. If the number is too high, the client will feel like you’re taking advantage of them. If the number is too low, you won’t feel properly compensated for your work.
So how do you come up with good prices to charge your clients? There are basically two models: fixed pricing and time-and-materials pricing. Each model comes with advantages and disadvantages, so you’ll need to choose the one that works best for you, but in this article we’d like to give you an overview of both options to help you decide.
Keep in mind, however, that you aren’t bound to one system or the other. Feel free to switch between these pricing models based on the types of clients you serve and the projects you work on. Now let’s explore fixed price vs. time and materials pricing.
