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I've always used a fixed price approach. Clients like it because they know exactly what they're going to pay. it does mean you must ask lots of discovery questions to get a clear idea of the project scope (which you should do anyway) and ensure you have caveats should the scope change. Only if it's not possible to judge the scope of a project do I charge an hourly rate, however always set expectations up front and it's never been an issue.

I usually do fixed pricing. I do ask lots of questions and outline limitations so that I am not taken advantage of either. I find it works best for small businesses because they rarely have a slush fund of marketing dollars. I too benefit because I know what my minimum is. i tend to be more efficient.

I wonder how something like this would work in other fields - say auto repair? You pay a monthly fee based on your annual mileage and everything is included in that price? What other ideas are out there to expand this?

Great comments ladies...

you're exactly right - clients love the fixed cost approach because they know exactly what they are getting and it takes the fear out of perhaps handing over a blank check for you to fill out as much as you want. And yes, there are certainly occasions that you'd want to charge an hourly rate - trust your instincts when to do this. I actually have a unique hybrid approach I go cover in my "Being a Starving Artist Sucks" book that protects the freelancer...but clients love it as well.

Sounds like you're running a tight ship - nice. Asking the right questions and putting boundaries up at the BEGINNING of the project is key.

Great question. I think the key in both Godin's post and mine is that industries need to think outside the box and take some time to really learn what would benefit their clients/customers the most. Doing some research into buyer behavior would provide some great clues as to how this could work in any industry.

I like the concept of "fixe prix" menus, however, under very limited and strict terms. The pitfalls are massive for a poorly planned project and could be worse than this current economy.

However, after losing work to because "budget issues", I will try anything about now. So Monday morning, $100 bucks for a complete e-commerce enabled website. On second thought maybe not.....

You're right M.H., fixed pricing can be a scary deal - especially if you're new to freelancing. The larger the scope of the project the more likely you are to making a bigger mistake.

Keeping that in mind you might want to break things down into stages and bill each one separately.

No need to charge $100 for an e-commerce site :) There is a lot of business out there my friend...

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