Best Way to Approach Billing with New Clients

Question

I recently started my first local design and marketing business, and currently I'm on the search for clients/work. I had a job interview yesterday with a reputable local construction company that is open to the possibility of working with me on a freelance basis, rather than as a full- or part-time employee, which has several benefits in my case.

My question is regarding how I should approach a proposal with this potential client, and future clients. I'm not good with pricing my work (I'll be honest) and do NOT want to lowball myself. I'm trying my best to avoid hourly work, and billing for hours in general. I've just heard great arguments against it, and have seen these arguments borne out in my own 5 year freelancing career. Hourly is just not great, unless possibly if you're able to command a high hourly rate to be profitable, which I am not able to at the moment because that would scare potential clients away.

So my question is – should I propose a monthly retainer? I'm honestly not sure what options an experienced freelancer who does not want to be stuck in hourly billing and run a profitable business normally proposes to potential clients.

Doesn't your retainer mention an hourly rate? What is your alternative to an hourly rate - fixed price? — morsor, Oct 28 '21 at 07:05
@morsor Well a monthly retainer/fee could be broken down to hours/hourly rate, yes, but it's not necessarily based on tracking hours. — alxmntrvl, Oct 28 '21 at 14:30
Can you share or refer the great arguments against hourly rate? — rubengavidia0x, Oct 28 '21 at 19:34
@rubengavidia0x here's one discussion about it: https://www.youtube.com/watch?v=B1b7QlQILRo&t=441s — alxmntrvl, Oct 28 '21 at 19:39
@joeqwerty here's one discussion about it: youtube.com/watch?v=B1b7QlQILRo&t=441s — alxmntrvl, Nov 02 '21 at 13:36

score 5 · Answer 1 · answered Oct 28 '21 at 14:28

5

By all means offer them the choice of a monthly contract and bill accordingly and mention that's how you'd prefer to work. You already know the downsides for the hourly billing so you should be able to communicate the advantages of monthly retainers to them in a way that looks advantageous to them.

However, be prepared to be flexible to start with - the chances are that the construction company works with freelancers in a particular way that fits in with their finance workflow.

answered Oct 28 '21 at 14:28

Yeah I was trying to build into the proposal how it would be advantageous to them in a few ways. But I'm trying not to get stuck on a particular number or anything else until we come to an agreement. – alxmntrvl Oct 28 '21 at 14:33
1

So I guess work on the "how" to start with before heading to the "how much". – Oct 28 '21 at 14:35

score 2 · Answer 2 · answered Nov 14 '21 at 19:59

Since you clearly don't want an hourly contract, you shouldn't offer that as an option.

Your pricing should be clear to your client, something like: "I'll set up, monitor and optimize your google ads, facebook ads and amazon ads accounts for x$/month" Flat rate, no surprises.

Business people understand that you will probably "lose" some money on the initial work but will have it easier later.

A good business relationship is based on a win/win situation, your client should feel like either they are saving money on an in-house full-time marketing person, or that they have delegated this responsibility to a company and you have to get money and not become a slave.

You are selling peace of mind as part of your product, managing hours, managing tasks, managing results, is probably something your client doesn't want to do with you anyways. Enumerate your initial and recurring tasks, let the client know what he will be paying for, and submit a proposal.

If the client really insists on hourly, and you don't want to drop it, you can agree upon the same amount of work and responsibilities and require the client to always pay for a minimum of x hours of work every month, regardless of how many hours actually work. Some clients just need those number for bureaucratic reasons.

Best Way to Approach Billing with New Clients

2 Answers2