Most freelancers start out with an idea of how much they’d like to charge as an hourly rate, some work out how many hours they’re likely to work and divide this by the salary they’d like to earn to get this figure, others just choose a value that they feel reflects their talents. Neither way is right or wrong and over the course of your freelance career this figure will change as your level of experience grows. But what do you do when a client wants a fixed price quote?
The simple answer is work out how many hours you think the project will take and multiply by your hourly rate, but how accurate can you be when estimating the total number of hours a project will take?
When your estimate goes out of the window
You may estimate that a project will take 80 hours to complete but as everyone knows in this industry, things don’t always run as smooth as you’d like. What if your initial design gets rejected after spending 14 hours on it? What happens when you hit a stumbling block when accessing a clients server that throws you a couple of days behind?
There are freelancers out there that won’t give fixed price quotes for that very reason, they’re not comfortable with it. This approach will actually end up costing them money, as more likely than not the client has a budget in mind and they want to know the project can be completed within that budget. An hourly rate doesn’t give the client confidence the project won’t overrun and end up costing them more than they can afford.
A solution of sorts
The reality is, there is no simple method to providing a fixed price quote, the more experience you have with web projects, the more likely you are to be able to give an accurate quote. The method I use is to work out the hours I think the project will take and then factoring in a certain amount of time (depending on the size and complexity of the project and also equally as importantly the relationship with the client) to allow for any potential issues. In most cases it works, but it doesn’t always go to plan.
I’m a big advocate of the brilliant online accounting software FreeAgent (review and discount code here) to manage all the financial aspects of my business and I’ve recently started using their time tracking facility on fixed price projects to work out project profitability. Over time this will help me to make my quotes as accurate as possible and highlight any areas where I may or may not be over running with time. As with all things digital, it’s a constantly evolving process.