For most projects we charge a flat fee (also known as a project-based fee). Unfortunately, there’s no magic pricing guide out there; the project fee is simply based on how long we estimate it will take us multiplied by our desired hourly rate. Your time estimates may be way off when you’re just starting, but as you track your time you can improve the accuracy of your estimates with each project. Your rate should factor in your overhead, your relative experience level, and about 30% extra for the government’s share. If you are more experienced and can create better work more efficiently than others you should adjust your rate to reflect this. You should be able to tell if you’re over/undervaluing yourself based on how your workload shakes out. A young business may need to try to land the majority of the inquiries they receive, but a more established studio might shoot for something closer to landing about 10% of them. If you’re struggling to fill your schedule, you are either overpricing yourself or failing to communicate your value properly. If you’re consistently getting more work than you can handle, you are likely underpricing your services.
For small scale projects we usually work hourly. We’ll provide an estimate ahead of time so there are no surprises. This hourly rate is generally higher than the rate we shoot for on big projects. We can afford to discount the rate on big projects a bit because they provide greater stability for us. We’ll work out a retainer agreement if a client needs consistent small chunks of work over a long period of time. We also discount the rate for retainers as they provide the same stability a bigger project does.
Be prepared to go back and forth on negotiating the details of big projects, but don’t put yourself in a position where you limit your ability to provide quality work to the client. It’s much better for both parties to trim the scope to fit the budget rather than cut corners on the execution. Often, components that didn’t make the cut in an early project can be revisited once the client has seen a return on their initial investment.