Hi Ken,

I agree wholeheartedly. I think it’s very tempting for new copywriters, especially, to want to bill by the hour because they think it will be easier but, as you note, it’s actually much more complicated. And I agree with your point about quotes as well; I don’t know about you, but I’ve actually never gone back to a client with a higher number once I’ve discovered that a project is going to take me longer than I expected! That’s part of the reason it’s very important for writers to be sure to estimate in concepting time, editing time and meeting time, as well as get a clear agreement as to the project’s scope, don’t you think?

Thanks for commenting!
Nicki

I’ve been a firm believer in project-based fees ever since I began freelancing in 1991.

Most clients prefer project billing because it eliminates surprises. You have told them up front that X work will cost Y dollars. No surprises when the invoice comes. If, on the other hand, you bill by the hour and only give the client an estimate (as opposed to a quote) you run the risk that your actual hours will exceed what you estimated. Then what do you do? Bill the client for more than they’re expecting? Do know this: Even when you say “estimate,” the client hears “quote.” Do you reduce the bill to match your estimate and short yourself? Well, then you turned it into a project fee anyway.

Besides eliminating surprises in the invoice, project fees allow you to earn more money than you would by billing hourly for the same amount of work. If you think a project might take 16 hours, try pricing it equivalent to 20 hours. WIth a flat fee, you’re not telling the client how many hours the job will take, just how many dollars it’s going to cost. If the project takes you less than 20 hours, you will yield more than your hourly rate. Your goal is to price projects high enough and then work efficiently enough so that you are consistently earning at or above your hourly rate.

Of course, you still run the risk that a project — through no fault of the client’s — will take you more hours than covered by your flat fee. In this case, you suck it up, bill the quoted fee, and learn how many hours this type of work really takes.

And that gets to the most important point in all of this: Even if you bill by the project, you still need an hourly rate and you need to track your time so that you know how many hours it actually takes you to do different types of projects. And tracking time effectively does in fact mean tracking to the minute, so you can round up to the fraction of an hour at which you bill. You can do this with any number of low-cost project-based time-keeping apps for computers and smartphones. One has the easy-to-remember name of StopWatch. There are also plenty of low-cost project-based time and billing applications for PC and Mac that combine time-tracking with professional invoicing. The advantage they offer over word processor invoicing is they track your receivables (what you’ve billed for which you’re awaiting payment) and can run all kinds of useful reports on your billings, productivity and profitability. For example, you might be able to look at the hours worked and dollars billed for each client to see which clients are your most profitable and which are getting work at below your hourly rate (so you can do something about it).

And how do you set an hourly rate? That’s a message for another time.