Exactly what it says on the tin. Hourly rates are applied and charged depending on how many hours it takes to complete the project.
As this is one of the easiest methods to use, it has also proven to be one of the most common - but is it best suited to your client projects? Let's take a closer look.
Only setting a rate based on how long you think it will take to complete a project completely bypasses all other factors. For example, associated costs of resources, workspaces and tools needed to see the project through. As well as other individualised factors such as company size, usage and deadlines.
If you are working on a commercial project where the client stands to generate income or business in some way, pricing by the time taken alone, completely disregards the potential value you may be supplying the client with.
Put it this way; imagine you were to design a series of prints for a client. You have an hourly rate of £50 and it has taken you 8 hours to put the designs together, so you charge the client £400.
The client then goes on to use those prints across a range of clothing to sell in-store and online.
The client generates sales in excess of £2000 per month on the items featuring your prints (do you see where I'm going with this?) Leaving you short-changed - as you have only charged an amount based on how long it has taken you to create.
How will you accurately record time spent working on the project? Just wanted to squish this in here: working on a project doesn't only include creating, it also includes journeys you have to take, phone calls, material sourcing or any other activity needed to complete the project.
This part is true for all pricing methods because the fact is, are you start to tot up your experience, you will become more skilled at what you do. In turn, you may even find that projects will take you slightly less time to complete.
If your hourly rate remains the same with no inflation to reflect this, you are essentially punishing yourself for being more efficient.
Need some help setting a rate in the first place? Click here to use the free minimum hourly rate calculator.
Day Rates are based on the amount of days it takes to complete a project. This time based pricing method has slightly more 'give' than hourly rates. Let's get into it.
How many hours do you class as a working day?
Day rates give you the flexibility to choose what this may look like, although it may be seen as taking advantage if you're rocking with anything less than 6 hours.
That said, this is entirely up to you, as long as you know you are doing all you can to meet the needs of the project without totally burning yourself out or overworking in the process.
No one wants calls at 2am. Or e-mails in the dead of night harping on about JPEGs or colour changes.
There needs to be boundaries established from the jump (with any pricing method really and truly) to ensure that there is no overstepping and that communication runs as smoothly as possible.
Clearly state your working/contactable hours to the client at the very start to reduce the likelihood of unwelcome contact in your downtime.
Consider applying an additional rate for add-on tasks that have to be carried out after your working day is done.
If an additional rate applies, it's important you are completely transparent with the client about this before the project work even takes place.
This is usually a flat rate based upon the months spent working on a project.
This could either be a one-off or rolling month by month, depending on the needs of the project and the type of agreement you have with the client.
Does your agreement require you to clock in and report to the client on a daily basis? Or will you opt for a working week with slightly less days to provide more time for other activities?
Or will you opt to provide work and have check-ins based on a particular structure as opposed to day in and out?
Not making sense? Let's take this scenario for example:
Let's say you start working on a project June 1st - predicted to finish by August 1st.
For example, by the day could look like:
Working hours: 10am - 5pm Weekdays
Feedback Meetings every Monday & Friday.
Completely based on the process could look like:
Concept & Strategy Board Feedback Session: First week
Check-in: Second week
First Draft: Third week
Both methods have some sort of structure, but they're based on different variables.
One is based on a set routine, whereas the other is defined by the project process. Give some thought to which of these structures may be a suitable fit for your working style.
This should be in place regardless of the set up and can generally be decreased through the hosting of discovery sessions at the start of a project. However there may still be the potential for never-ending revisions.
Especially during long-term projects.
Those endless revisions can easily bleed into your breaks and cause you work a tonne of overtime you hadn't originally banked on.
Make sure these revision caps are clearly communicated to the client from the start.
If you're going to be working with your client for at least a month, it would be a great idea to try and get to know more about them. The more you know about someone and what their goals are, the stronger and better suited the outcome is likely to be.