Fixed Fee vs. Hourly Rate?
Fixed Fee vs. Hourly Rate? That is the question. Or is it? For professional services providers establishing an appropriate cost structure for their work is quite a daunting task. At issue is usually whether or not the prospective client will be scared away with a "TOO HIGH" hourly rate, or whether you will underbid and lose your shirt on a project with a "TOO LOW" fixed fee. Consider setting up a pricing structure that includes BOTH components and establish a new one for each project based on the scope of services.
For example, for our "QuickBooks Set-up" services, there is a FIXED FEE associated with a detailed plan of action documented in the scope of services. AND there is an agreed upon HOURLY RATE for follow-up consultations after the initial review of the client's new QuickBooks file is conducted. This is a win-win for both you and the client.
This is but a small example of a pricing approach. The key here is to always attempt to find the win-win for both you and your client. Never assume that you have to give away work to gain the respect, loyalty and patronage of a client or prospective client. Your work has value and it is important that you always present it in that manner.
I hope this information will motivate you to consider your approach to establishing your prices and pricing structures when working with clients. Please check here periodically for more insightful blog posts.
In the meantime...be well and prosper!
Angeline
Client Portal