You will be able to choose a pricing model for each type of work you do.
Two freelancers design the same logo. One takes three days, the other takes one, because she has done fifty of them. If both charge by the hour, the slower designer earns three times as much for the same logo, and the fault lies with the way they charge.
How you charge shapes what you earn as much as what you charge. This lesson covers the four common models and when each one fits.
You charge for the time you spend. It is simple to explain, easy to quote and fair when the work is genuinely unpredictable, such as fixing an unfamiliar system or open-ended support.
It has two problems. First, it caps your income at your billable hours. Lesson 7.1 showed how few of those there are, so the only way to earn more is a higher rate, which clients resist when they can see it per hour. Second, it rewards working slowly, because as you get faster and better, you earn less for the same job, like the designer who did her fiftieth logo in a day.
Clients also tend to watch the clock, and every hour becomes a question. Hourly pricing is a reasonable place to start while you learn how long jobs take. It is a poor place to stay.
You quote a fixed price for an outcome: a logo, a website, a set of social media posts, a report. The client knows the cost up front, and you keep the benefit of being fast.
The risk moves to you. If the project takes longer than you estimated, you absorb it. And projects grow. A client asks for one more revision, then a slightly different version for another page, then a quick change to the colours. Each request seems small, and together they can double the work for the same fee.
The protection is a written scope that lists what is included, how many rounds of revisions you allow, what the client must supply and by when, and what counts as extra, with anything outside it quoted separately. Without that, a project price becomes an open-ended commitment at a fixed fee.
You price from what the result is worth to the client, rather than from your time or a standard rate. A brand refresh for a cafe that expects a few extra customers a week is worth one thing. The same work for a company launching a product it expects to sell thousands of is worth a great deal more, even if the hours are similar.
Value pricing needs good discovery, because you have to understand what the client is trying to achieve and what it costs them if it goes wrong. Questions like "What happens if this is not done by the launch?" and "How will you know this worked?" do that work. Discovery: questions that find the real problem goes into this skill in depth.
Value pricing works best where the work has a clear link to the client's results and the client can see that link. Small, routine jobs are a poor fit, because the client sees a standard deliverable and expects a standard price.
A client pays a fixed amount each month for an agreed amount of work or availability, such as up to a set number of hours, or a set list of tasks.
Retainers usually come at a lower effective rate than your project work. In return, they give you something no other model does: predictable income. For the base-pay method, that is worth a lot, because a retainer covers part of your base pay before any other work arrives.
Here is a made-up example. A client offers Mei S$2,000 a month for up to 25 hours of design work. If she uses all 25 hours, that is S$2,000 divided by 25, which is S$80 an hour. Her project work averages about S$95 an hour, so the same 25 hours on projects would bring S$2,375. The retainer costs her up to S$375 a month in rate. But S$2,000 covers about 87% of her S$2,300 base pay, every month, whatever else happens. For many freelancers, that trade is worth making for one or two clients.
Check one thing before you accept any retainer: the effective rate must be above your floor rate from lesson 7.1. Mei's floor is S$57, so S$80 passes. Set clear limits on hours or tasks, too, so the retainer does not quietly turn into unlimited availability.
You do not need one model for your whole business. Most freelancers use two or three. Mei uses project pricing for logos and brochures, a retainer for one agency's monthly social media work, and hourly pricing only for urgent fixes to files she did not create.
A simple way to choose: a job you can scope clearly gets a project price. Where the result is plainly worth a lot to the client and you can learn how much, consider value. Work that repeats every month suits a retainer, and work that is truly unpredictable can be charged by the hour.
Look at the jobs you do most often, and for each one ask which of those four descriptions fits it best.
List your three most common jobs and choose a pricing model for each, with one reason.
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