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The charge of the hour as a freelancer, why it's a bad idea and what you should do instead

This year, I'm focusing on increasing my income – and the focus is paying off.

One thing that has helped me a lot to increase my income, is to no longer see me as a worker at the hour. I stopped billing customers a long time ago on the basis of an hourly rate, but for some reason, I still thought of myself as a typical hourly worker. It's a mistake because I've always seemed to under-charge my work.



Stop charging at the time.

Why Think Like an Hourly Worker Is a Bad Idea

When you think in terms of hourly wages, it can do bad things for your state of mind. For me, I would use the hourly wage that I have earned in the past and other employee pay benchmarks to decide how much to charge. It's a huge no, no.

Comparing an employee's hourly rate to your own freelancer rate is uneven. You need to consider taxes on self-employment, health insurance, business expenses and time spent on administrative tasks to keep the business running. Plus, the value you bring could be worth a lot more.

A client does not have to pay employee expenses for contractors. It's a major saving that they earn by working with a freelancer. An hourly rate given to an employee takes into account the benefits that the employee earns. Freelancers do not get these benefits and should be paid more.

Despite this logic, some customers are shocked when you name an hourly rate that compensates you correctly. Then the nickel and the attenuation begin and you are frustrated. If you arrive at an hourly rate agreement, it can also be difficult to track and report the hours for the bills.

There is a better way to do that.

What should you do instead?

Set a price per project and do not specify how much you work per hour. A customer does not need to know what is your hourly rate. They may have a preconceived idea about what someone should win.

For example, saying that you charge $ 100 an hour could make somebody rather uncomfortable. They can even look at their pay check and feel uncomfortable wondering why they are not paid $ 100 an hour too.

Instead of telling the hourly rate, what if you charge $ 100 for writing a blog post without telling how much you charge per hour?

You could easily earn $ 100 at the hour, and they would not be any wiser. Nobody knows how many minutes or hours are devoted to your work, and frankly, it's not their business if you produce what they need.

Final word

The key to increasing my income (and giving up the hourly model) was to consider me an expert rather than a workaholic. An hourly worker performs a task.

An expert offers his expertise with a product. This is worth more, and my clients seem to be more willing to pay for it if it is expressed as a fixed rate as opposed to an hourly rate.

To start setting a flat rate, think (privately) what you want to charge per hour for certain jobs. Then add money beyond this starting point so that it offers you an income on which you can live comfortably. Add taxes, expenses, effort costs and anything else that you think is necessary. Add expert fees if you believe this is necessary. Then discard the hourly rate.

Image from Due.com

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