Do You Quote By Hourly Rate or Flat Fee?

Pricing our commercial freelancing work. How do you do it? Me? I became a convert to the Flat Fee Channel (“All flat fees, all the time…”) some time back. Rates are best quoted within the context of a particular project. Tell a client your hourly rate is $100, without relating that rate to a specific job (he’s thinking, “Is it going to be 5 hours or 50??”) and he might just run screaming into the night. But say $1000 for a project you think will take 10 hours, and if that’s close to what he’s budgeted for the project in his mind, then you’re in business. An hourly rate, in my humble opinion, should be a number kept to yourself, and used only for internal calculations.

All that said, the debate still goes on. Last week, got the latest piece from wildly successful Atlanta commercial freelancer Ed Gandia. Ed’s the publisher of the great ezine, The Profitable Freelancer (visit and subscribe at no charge). Ed did a great two-part piece for my ezine in June and July of this year about how he made $163K in his first full year as a commercial freelancer.

Ed’s latest piece was entitled “What’s Best: Hourly or Flat Fee?” Check it out (it’s short) here before reading the rest of the piece. Here was my response to it:

Ed: I have found precious few commercial writing clients willing to even let you quote on an hourly basis if they don’t know you. That’s almost exclusively reserved for long-term clients who trust you implicitly, and/or for projects that have, by definition, an undefined scope and fluid parameters, that simply don’t lend themselves to being firmly nailed down. Not sure how one would even go about trying to force an hourly-rate approach on a client. For most commercial freelancers, in my experience, the more important issue is do you quote a straight flat rate or one that reveals your calculations (i.e., “$1500” vs. “$1500 based on 15 hours at $100 an hour”).

The former is the better approach, because as you point out, if you work fast, and finish the project in, say, 12 hours, you’ve just upped your hourly to $125. And as you also point out, the client only cares about the final result. As long as you get it done for the amount they agreed on, then, technically, they don’t care if it takes you 1 hour or 50. If you share your internal calculations, then if it takes you less time, technically, you should charge less. Going with a flat rate focuses the whole discussion to the end result, which is the only thing that really matters.

Just as importantly, the flat-rate approach has the subtle but powerful affect on you, the commercial copywriter, of further “professionalizing” what we do. We’re being paid to deliver a professional service for a fee. We’re not an hourly worker punching a proverbial clock. And I say that same distinction isn’t lost on the client either, who’s more likely to view you as that professional and worthy of your fees.

Also, just a note about flat fees. I’ve found over the years that a range in your quote that varies by 10-15% is acceptable to most clients. Haven’t had any pushback from a client ever. Generally speaking, by agreeing to a quote of, say, “$1500-1700″ or “$4500-$5000,” clients have reconciled themselves to the upper end of the range, and because the two figures are close, it’s not a problem. But it gives you a bit of extra wiggle room for unexpected surprises, which if you have a cushion, you may not have to even charge for. And that’s good for client PR (though if there IS extra time involved, and you don’t charge, you might let the client know that you usually would but won’t this time. That way, you don’t establish a dangerous precedent by having them think that such an M.O. is standard, which it definitely isn’t).

AND, if you end up below your upper end, which has often happened for me, and charge a bit less, it’s a nice surprise for clients, who can’t help but notice you were responsible and frugal with their money. If you suspect money isn’t the #1 issue for a client, I might even suggest one bump the top end of your fee range a bit beyond what you know it’ll take, so you can in fact, ultimately charge less than the upper range so as to make that good impression.

How do you price your work?

Have you had unpleasant experiences quoting hourly rates in a vacuum (i.e., minus the context of a particular project)?

Do you have clients you work with on an hourly basis, and if so, what’s the nature of the relationship and the work?

Any insights you’ve learned about pricing work you care to share?

20 replies
  1. Laurie Schmidt
    Laurie Schmidt says:

    The “unpleasant experience” I’ve had is quoting an hourly rate and then never hearing from them again! (or getting a polite kiss-off response like, “Thanks for the information – I hope we can work together sometime.”) I’m totally with you on quoting a project fee rather than hourly rate, but in my experience – most potential clients want to know what my hourly rate is. So how do you move them to the project fee approach without seeming like you’re evading their question? I’d be interested in hearing other perspectives on this.

  2. Mike Klassen
    Mike Klassen says:

    I did a project once early on for an hourly fee and I hated every hour of it. I swore I’d never do it again. The client needed help writing for their new website, but had a very fixed budget. So based on an hourly fee, she pretty much said, “Just keep writing until you hit X hours. Whatever you get done is stuff I don’t have to do myself.”

    The trouble was, good writing takes time that doesn’t always involve any writing… sometimes it’s research and sometimes it’s just mulling things over. But I always worried about the client saying, “How many hours have you spent?” About two hours so far. “Ok, can I see what you’ve written?” Well, I haven’t written much yet. I ran through some ideas while in the shower, and spent some time researching your competitors.

    That’s totally legitimate in the creative process, but hard for some clients to understand and puts more stress on me if it becomes an issue. Part of me enjoying my freelance lifestyle is _avoiding_ pressure when possible. Thus, I never do hourly projects anymore.

    Plus, I hate having to actually track time. I bounce around a lot when I’m doing multiple projects. I tried some “track your time” software and it drove me nuts keeping track of every legitimate minute spent on a project.

    If you simply have a fixed fee, the client can’t say dinky-doo about how you reach the goal as long as you reach it. Plus, the client is more comfortable with what I call “an invoice without surprises.”

    In terms of pricing my work, I came up with a very simplistic formula that I’ve used before. I’m going to keep the math really simple:

    Let’s say you want to make $50,000 a year. There’s 52 weeks in a year, but let’s say 50 and you take 2 weeks off.

    So, to make $50,000 a year and there are 50 weeks, you need to make $1,000 a week.

    If you want to work five days a week, you need to make $200 a day.

    Thus, you base your pricing on how many days you think a project will take. If you think it will take a week, you charge $1,000.

    Admittedly, that’s somewhat controversial for some people. But if you have nothing else to go on getting started, it’s an option to consider.

  3. peter
    peter says:

    Thanks Laurie and Mike!

    Good stuff. Laurie, I had the same exact experience (wrote about it in the ezine some time back), quoting an hourly rate and having a client never reply. And this was after he contacted me, very interested in working with me, had visited my site, liked what he saw, had all these projects on tap, then once I told him hourly, NADA. Adios, amigo. That made me a convert to flat fees.

    As for how to get clients to understand why you don’t want to share the hourly rate, just explain as I did here: “Mr. Client: without the context of an actual project, my hourly rate won’t mean anything to you, because you won’t have any idea how long a given project will take, and human nature dictates that you’ll think the worst, and imagine things turning into a financial runaway train, and then I’d never see you again. So, we don’t want that.”

    Have some fun with it and I’m guessing they’ll understand where you’re coming from. If they insist on a ballpark but still don’t have a specific project for you to bid on, then tell them about a recent project you did (ideally, one similar to something they might have you do), and tell them what you were paid for it.

    And Mike, OMG, that scenario (i.e., client asking to see what you’d written after two hours) is my definition of a Total Nightmare. SO not interested in anything remotely like it. That’s a client who absolutely doesn’t understand how the copywriting process works, the need for creative brainstorming time, etc. And that’s where we as copywriters need to educate them as to how the world works before getting in too deep.

    As for income calculation strategy, intriguing, but depends on one’s skills and what your market (if you’re drawing from your local market) will bear. Just as importantly, $200 a day for a full day is only $25 an hour, and as we well know, if anyone admits to charging those kinds of rates around me, they’re going to get an earful… 😉


  4. Star
    Star says:

    I prefer a flat rate, half on deposit. You didn’t mention how much easier it is to get the deposit (never use the word advance) when you work on a flat fee.

  5. Mike Klassen
    Mike Klassen says:

    Hey Laurie,

    I’ve never had a client ask me to break down a flat fee to explain the hourly rate I might have used to get there. But if they did, I wouldn’t feel under any obligation to explain it or feel like I was being evasive.

    I think I’d be likely to say, “My fee is not so much based on any hourly rate, but based on my experience in doing projects like this, the time and research it will take, and what I know to be the general market price for such a project. Quite frankly, my main goal is getting you copy that achieves the goals you’ve set, no matter what it takes for us to get there. The moment I start thinking about things from an hourly perspective, my focus shifts just a little bit to clock-watching, not writing winning copy.” (Or some variation on that. It’s a little hokey, but you get my drift.)

    Obviously, you need to think about yourself and make sure you’re earning the income you feel you need. But your client needs to be moved off the belief that everything is based strictly on an hourly rate. There are other factors that go into quoting a project.

    Peter, you make a good point about how $200 _could) be $25 an hour… but not for those who only want to work two hours a day. 😉

  6. Alan Stamm
    Alan Stamm says:

    I’m also a well-fed convert to project fees. My only remaining hourly client is a six-year relationship that includes media monitoring, government relations research and even self-assigned work occasionally — all within a monthly time ceiling that’s been known to stretch.

    For the rest, I’ve come to realize flat rates are the way to play . . . for all the reasons articulated ^. One agency client asked for a ‘rate card,’ which I developed with fee ranges and footnotes about variables that affect project-specific fee proposals. (Adapted for others only on request.)

    And while we’re talking shop, I should add that I’ve come around on another fee-quote issue Peter and I discussed off-blog a few months ago. He’s correct that there’s more downside than upside (he sees no upside, actually) to itemizing project fees by service segments such as message development, research, copywriting. Turning point came when new client balked at ‘project scoping’ fee to cover launch meeting time/travel (3 hrs. total). He saw that as “relationship building” time vendors should absorb as business development investment, “just as we do with our clients.”

    Was start of monthly assignment, so naturally I swallowed it. Lesson learned. Only breakout now is for post-production quality assurance review of Beta websites I’ve written because that comes a month or two after main project invoice(s).

  7. Ed Gandia @ The Profitable Freelancer
    Ed Gandia @ The Profitable Freelancer says:

    This is fantastic feedback on my article, Peter. Thanks for your thoughts and comments. This is why I love this topic — because it tends to generate very productive and thoughtful discussions. You gave me some good ideas I hadn’t thought of. Like the flat-fee range approach, without the hours.

    As far as how I approach the “what’s your hourly fee?” question, I only get asked that about 10% of the time. And when I do, I approach it very much the same way Peter and Mike do. I’ve NEVER had anyone keep pressing the issue after that. If they did, I probably don’t want them as a client. My best clients are those who understand my value and are ultimately more concerned about quality, results, dependability, and professionalsm — not all the details about how the project gets done, when I’m working, and how many hours I’ve put in.

    Also, to make flat fees work well (and to take a lot of the hassle out of quoting), I maintain a master fee schedule, which I update about 4x a year. My schedule has fee ranges for every type of project I work on. As I learn more about what others are charging, what clients are responding to, and the effort required for each type of project, I adjust these ranges. When quoting a specific project, I consider all the variables and quote somewhere in the range.

  8. Beth Carter
    Beth Carter says:

    I started out my business quoting on an hourly rate, mostly because I didn’t know any better. That lasted right up until a newsletter client balked at an invoice and told me they thought each article should only take me X hours to write. Now, if they had said they only had X budget per article, I might not have minded. But to dictate to me how I should do my job like that…well, I made the switch and haven’t looked back since.

  9. Dave Rakowski
    Dave Rakowski says:

    Hi Peter:

    Same debate goes on all the time in the legal profession, of which I am reforming member. 😉

    My view has always been that by charging by the hour, you are limiting your potential income (there are only so many hours in the week right?) inviting nitpickers (see Beth’s comments above) and doing way too much math. 😉

    For those clients who ask what your hourly rate is, next time ask them what they pay for the raw materials for their business—I’m willing to bet they won’t want to discuss it.

    Dave Rakowski
    Allentown, PA

  10. Laurie Schmidt
    Laurie Schmidt says:

    These are all great suggestions on how to handle the “what’s your hourly rate” question – thanks! On that note, I had an interesting thing happen with a potential client yesterday. They emailed me about a quick turnaround project they needed done and said, “Here is what we have budgeted for this project – is this in your ballpark?” I wrote back and told them that it was “almost” in my ballpark – we negotiated a fee that was a few hundred more dollars and it was a done deal. Oh, that all negotiations were that simple. 🙂

  11. peter
    peter says:

    Good topic and great input. I like Mike’s explanation to a client who asked him to break down a flat fee, and the focus on Creating a Successful End Result. Again, all about the professionalism involved, not the hourly-worker thing.

    And Beth makes a good point about hourly rates: Quote an hourly rate, and you potentially give the client the power to tell you how you should be spending that time, and how much time should be spent on what, when, in fact, they don’t know how the process works. Stick to flat rates and you stay in control of things…

    And Dave, GREAT point about asking clients what they pay for raw materials if they ask you for your hourly rate. That’s roughly equivalent, and they should get the point.

    So much of this underscores a fundamental truth about this business: tell clients how things work, and they’re likely to follow. Give them the opportunity to “direct traffic” by telling them your hourly rate, and you give up some of your freedom.


  12. Graham Strong
    Graham Strong says:

    Hi Peter,

    Two things: When asked about the flat rate, I always mention that I’ve found my clients prefer to know their costs up front, rather than guess what it might cost based on my hourly rate. They always think: “Yeah, I’d prefer to know my costs up front too…” I think people are conditioned to ask hourly rates, without actually thinking about what they really want to know: how much is this gonna cost me?

    Second, the downside to flat rates is that if the project does balloon, you have to be on top of it. Give a flat rate for a set list of services, and make it clear that the quote would change if the project changes. If the client wants to add “just one more web page” to the project, ensure that they are clear this is not included in the original quote, and that you will adjust the bill accordingly.

    I always readjust the quote up front, rather than tack it on at the end. This approach, I find, makes for less headaches at the end when you send them the final bill…!


  13. Eileen Coale
    Eileen Coale says:

    Great points all, and I’ve lived all of them. I’ve learned that if someone insists on knowing your hourly rate, they pretty much believe that $30/hour is a generous wage. They sure aren’t going to want to hear $125 and up. Early in my career, I let someone coax it out of me. My rate at the time was $70/hour, and the individual responded in a shocked tone, “I’m the owner of my business, and I don’t make anywhere near that rate, so I don’t think it’s appropriate for me to pay you that much.” And that was the end of that.

  14. Michael Scully
    Michael Scully says:

    Regarding Eileen’s comment:

    The owner of that business probably didn’t consider that a self-employed writer doesn’t get paid for every working hour. I gather that for writers who work 35-40 hours/week, 15-20 “production hours” per week is typical — 25 at most.

    That business owner was probably thinking, “Let’s see… $70/hour times 40 hours/week [minimum] — hey, that’s $280,000/year! I’m not getting THAT from my business!”

    Sounds like he needs a business development program before he needs a writer.

    And even if a writer did charge $30/hour, and managed to get 2,000 billable hours in a year — that’s only $60K gross, before expenses and taxes. And forget about having any leisure time. Those are corporate attorney billing numbers — and their salaries start in the six figures, with four weeks of vacation.

    When it comes to “hourly rate,” it seems that clients either don’t run the numbers at all, or they run them incorrectly.

  15. Lauri
    Lauri says:

    I too learned long ago to avoid hourly rates whenever possible. Flat fees are the way for me! They give me more control over all aspects of the project.

    That said, coming up with a flat fee can be difficult. I do a lot of book writing, so I use a per word rate to generate a flat fee. If the project is going to require a ton of research, I add .10s of cents to my word rate, which I try not to let go below a certain amount to begin with.

    Of course, I *never* share my per word numbers with clients, because then they’ll want the same per word rate imposed on projects that might need more research or interviewing time or whatever.

    I actually had one client ask me once, “How come you are charging more per word on this book than the last one we hired you for? Why are you raising rates on us?” I assured them that I don’t charge by the word, because in reality I don’t. I just use per word rates as a way to find my own personal ballpark for what I should be charging for a flat fee – b/c since every project is so different, it can be hard to know what to charge!

  16. Sonia Simone | Remarkable Communication
    Sonia Simone | Remarkable Communication says:

    Peter, I have to thank you personally. Based on the advice you gave in Michael Stelzner’s recent copywriting class, I quoted a flat fee based on the pricing guideline that was part of the workshop. The client felt the fee was completely reasonable. At the end of the day, I made about 4x as much on the project as I would have in the hourly rate days, and I might well have had more trouble closing the sale.

    So thanks. 🙂

  17. Leisa Good
    Leisa Good says:

    I prefer a flat rate too unless the job is too “piddly”. Then I take half upfront then half after the project is finished.

    Hourly rates can be a “fright-fest” unless you explain that because the project is so small that it is based on a cumulative total of hours involved.

  18. Chris
    Chris says:

    I’ve long since stopped providing clients my hourly rate. I treat the services I provide like menu items …. and assign flat-fees to each. Just like menu prices at a restaurant can increase, so too can my fees every year or two. I’ve been in my own PR consulting business for almost 20 years, and have found that clients can get envious or resentful of your hourly rates when they know them … often saying “you’re overpaid” or that “you make more” than they do! Then that leads to the uncomfortable how-I-justify-my-rates chat, involving revealing office expenses, taxes, insurances, supplies, etc. None of their business. When clients are that non-savvy (to put you in that position) they don’t deserve to know your rates. Just use your rates to come up with the flat-fees to charge clients. And keep those rate-amounts to yourself!

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